Japan’s functional foods dilemma: Just over one-third of approved FFC products successfully launched in FY21
Between April 2021 and March this year, only 495 out of 1,445 FFC approved for sale were successfully launched in the market.
Over 60 per cent of them were pending sale – despite already being approved for sale by the authorities – while the remaining FFC were either withdrawn or the status unknown, according to data collated by Japan-based nutraceutical and cosmetics consultancy firm Smooth Link Inc. on the FFC market in FY2021.
This means that only one out of three FFC approved for sale was launched into the market.
At the same time, the number of FFC application and approvals are increasing each year.
The number of FFC approved in FY2021 was about 35 per cent more than the previous year, with COVID-19 a significant growth factor. Fat reduction, immune health, and stress relief are some of the popular categories.
The FFC system, introduced in April 2015, allows nutraceuticals, processed food and beverages, and fresh food products to be labelled with specific health benefits, based on scientific evidence from existing literature or the company’s clinical trial.
With less stringent requirements as compared to the Foods for Specified Health Uses (FOSHU), the FFC system has been seen as an easier and lucrative way to help companies grow its business.
In fact, it was introduced as one of the growth strategies to stimulate private investment under Abenomics – Japan’s former Primer Minister Shinzo Abe.
Companies are required to submit scientific evidence and safety related data to Japan’s Consumer Agency Affairs (CAA) 60 days prior to marketing a FFC.
The CAA does not evaluate the safety and effectiveness of the product but will disclose the data on its website for consumers’ access and will also conduct post-market surveillance.
Why delayed launch?
One possible reason for companies not launching a FFC soon after it has been approved by the CAA, is because there is simply too many similar products launched in that period, and companies have decided to delay their launch to avoid intense competition.
“The timing of the product launch has been missed due to a large number of competing products,” Hisaaki Kato, president at Smooth Link Inc told NutraIngredients-Asia.
“Unlike FOSHU, it does not take much time and cost to launch a FFC, which may have spurred the intensification of market competition.”
Big companies usually announce the actual date and sales channels of upcoming FFC launches on their website – sometimes a few weeks prior to the launch.
For example, Kirin put up an announcement on its website on March 17 that Nihon Yakken would be launching a green juice, also known as Aojiru, containing its immune health ingredient LC-plasma on March 28 across the country.
Competition in the FFC market is further exacerbated by companies, especially small and medium size firms which do not have a dedicated R&D team, and therefore entrusted their product formulating and manufacturing processes to the OEM companies, he said.
“The OEM company is entrusted with everything, so similar products flood the market and differentiation becomes impossible.”
One common FFC formulation is the use of GABA – which has been incorporated into various products, such as chocolate and rice. Reducing blood pressure is a common health claim for products containing GABA.
“There are so many similar competitive products around. If we talk about GABA, many companies are using GABA and putting the same health claims, so how can consumers distinguish the product that best suits them?
“That’s why many companies have chosen to stand out from the competition through TV commercials and marketing,” Kato said.
At the same time, the authorities are also keeping a close watch on how companies advertise their products to prevent false marketing claims. This is done via the Act against Unjustifiable Premiums and Misleading Representations.
“FFC is ostensibly a notification system, but in reality, the CAA confirms the scientific basis and safety of the product. In particular, the health claim is rigorously checked to ensure that it is not mistaken as a pharmaceutical product. If problems are found, the applicant must re-apply for the notification.
“It takes about 50 days to review the first submitted information by the authority and more than four to five more rounds of review on the revised information, so it usually takes more than six months for the CAA to approve a new notification,” Kato said.
Still a nice to have
Despite tough competition, Kato said that FFC was still a “nice to have” for companies big and small, because FFC was well recognised by the consumers.
“It is nice to have it, also, the FFC status is less expensive and less time-consuming to apply as compared to FOSHU.
“Also, many companies are putting a lot of TV commercial talking about their FFC products. The term ‘FFC’ is drilled into the consumers. So to the consumers, a company having a FFC product is seem as one that is pretty good.
“Building the company's image via FFC is important as a form of business strategy.”
At the moment, the FFC scene is dominated by Japanese companies partly because the application process and documentation need to be in Japanese.
For example, the systematic review submitted to the CAA needs to be in the Japanese language and evidence from clinical trials need to involve Japanese subjects, Kato said.
For foreign companies which hope to introduce their nutraceuticals into the Japanese market, there are also several regulatory requirements to consider.
“The challenge is whether their product is accepted by Japanese regulations. For example, their product might contain ingredients or additives not approved by the Japanese authorities.
“Second, if their product is not accepted by the Japanese regulations or is considered as a pharmaceutical, they will have to reformulate their product only for the Japan market when they have no clue on their potential sales performance.”
Otherwise, overseas firms tend to sell their nutraceuticals into Japan via cross-border e-commerce.
A total of 12 FFC notifications were withdrawn in FY2021 and another three more were off the list between April and May 2022.
Common reasons include deferment of commercialisation, no plans for production and sales, sales discontinuation, change in product formulation, and change in product name.
“The most common reason is sales-related, such as the termination of product sale, which accounts for 69 per cent of the total withdrawal.
Product related reasons, such as product renewal, is the next most common reason for FFC notification withdrawal.