Replies to post #1320 on The Rising Influence of Rising Affluence

[DewDiligence]

Multinationals Market Nutraceuticals With Traditional Chinese Ingredients

[The companies mentioned in this piece include PFE, HNZ, PEP, and Nestlé. #msg-48221898 is a background read.]

http://online.wsj.com/article/SB10001424052748703678404575637421610979434.html

›DECEMBER 13, 2010
By LAURIE BURKITT

BEIJING—In China, where diabetes, cancer and other chronic illnesses are on the rise, people are growing more health conscious, creating a fast-growing market for companies selling health foods.

Food-product giants such as Nestlé SA and PepsiCo Inc. have begun introducing foods that have a traditional Chinese folk-medicine twist. Among the ingredients the multinationals are using: wolfberry plants, chrysanthemum teas and tremella, a fungus commonly thought in China to help improve the skin, strengthen bones and control weight.

In 2009, sales of wellness foods and beverages in China increased 28% from five years earlier to $1.5 billion, driven by the elderly and women, according to Euromonitor International, a market-research firm. The figure is small compared with the category's $162 billion in U.S. sales last year, but the world's biggest food companies are eager to cash in on the growing Chinese market.

The Swiss food giant Nestlé is investing $500 million globally over 10 years to develop foods that can claim health benefits, and it's currently testing five of them in China. An estimated 92 million Chinese people suffer from diabetes, for example, and one of its clinical trials involves a mulberry yogurt for diabetics that is supposed to naturally regulate blood sugar and aid the digestion of glucose. The yogurt and Nestlé's wolfberry cereal drink, for improving immunity in the elderly, are not yet available in Chinese markets.

By completing clinical trials—a two-year scientific process of laboratory work and human testing—Nestlé will be able to introduce the food with special packaging, which generally has more influence on Chinese shoppers than it does on their Western counterparts. The company will also be able to distribute the foods at pharmacies and hospitals.

"This is the future," says Patrice Bula, chairman of Nestlé China. "We believe that Chinese are looking at food for their well-being, and we have an opportunity to play a bigger role in that."

Meanwhile, PepsiCo, as part of a $2.5 billion expansion into China over the next three years, is developing drinks and snacks inspired by traditional Chinese medicine. In October, it launched Quaker Herbal Oatmeal with such flavors as wolfberry and tremella. Teas created from chrysanthemum and lotus plants that claim to cool the body naturally were rolled out last year.

Coca-Cola, too, is hoping to attract customers concerned about their health with its Vitaminwater, which it launched in China last year.

Chinese parents pack their grocery carts with products aimed at improving children's development, such as Kraft's milk-flavored, calcium-fortified biscuits and fiber-packed vegetable and apple sauces from H.J. Heinz Co.

Vitamin makers are also profiting from the health boom. Last year, Chinese consumers bought $9 billion of meal replacements, vitamin pills and sports-nutrition and other sorts of dietary supplements, according to Euromonitor.

Direct-selling company Amway took in $16 million from sales of its Nutrilite vitamin brand last year, up 13% from the previous year and 52% from 2007.

Aiming to capture some of the increased spending on vitamins, New York-based pharmaceutical giant Pfizer Inc. is expanding marketing in China for its Centrum brand, which had $441 million in global sales last year.

Nutrition retailer GNC Holdings Inc, which operates more than 7,100 stores globally, is also trying to grab part of the growing market, raising up to $350 million in an initial public stock offering, in part to expand its China operations.

In February, the Pittsburgh-based company announced plans to form a joint venture with Chinese food conglomerate Bright Food Group that would allow it to sell products it sells in the U.S. market, such as calcium pills and weight-loss bars, in China. Retail operations are expected to begin by year-end, according to GNC filings.

Last week, The Wall Street Journal reported that Bright Food Group was close to a deal to buy GNC for between $2.5 billion and $3 billion.

Lu Lu, a 35-year-old who runs her own small marketing consultancy out of Beijing, tried vitamins for the first time eight years ago, before giving birth to her son. Now, she spends roughly $150 a month on vitamin packages from Amway.

"People say that's a lot of money to spend," Ms. Lu says. "But I believe that if I pay for better health now, it's cheaper than paying for hospital bills later."‹

[DewDiligence]

NVO held its Investor Day webcast yesterday—lots of interesting slides on the diabetes market, especially as it pertains to The Global Demographic Tailwind:

http://www.novonordisk.com/investors/download-centre/default.asp?Year=2011

10% of adults in China are diabetic (#msg-48221898), so there’s a really big upside here for somebody.

[DewDiligence]

Global Diabetes Epidemic Balloons to 350 Million

[70% of worldwide diabetics live in emerging markets—see #msg-52402577.]

http://www.reuters.com/article/2011/06/25/diabetes-epidemic-idUSN1E75N1VI20110625

›Jun 25, 2011
By Kate Kelland and Deena Beasley

LONDON/SAN DIEGO, June 25 (Reuters) - The number of adults with diabetes worldwide has more than doubled since 1980 to 347 million, a far larger number than previously thought and one that suggests costs of treating the disease will also balloon.

In a study published in the The Lancet journal, an international team of researchers working with The World Health Organization found that rates of diabetes have either risen or at best remained the same in virtually all parts of the world in the past 30 years.

The estimated number of diabetics is markedly higher than a previous projections that put the number at 285 million worldwide. This study found that of the 347 million people with diabetes, 138 million live in China and India and another 36 million in the United States and Russia.

The most common type of diabetes, Type 2, is strongly associated with obesity and a sedentary lifestyle.

"Diabetes is becoming more common almost everywhere in the world," said Majid Ezzati, from Britain's Imperial College London, who led the study along with Goodarz Danaei from the Harvard School of Public Health in the United States.

"Unless we develop better programs for detecting people with elevated blood sugar and helping them to improve their diet and physical activity and control their weight, diabetes will inevitably continue to impose a major burden on health systems around the world," Danaei added in a joint statement.

People with diabetes have inadequate blood sugar control, which can lead to serious complications like heart disease and stroke, damage to the kidneys or nerves, and to blindness.

Experts say high blood glucose and diabetes cause around 3 million deaths globally each year, a number that will continue to rise as the number of people affected increases.

As a result, diabetes is a booming market for drugmakers like Novo Nordisk (NVO), Sanofi (SNY), Eli Lilly (LLY) [those three comprise the insulin oligopoly], Merck (MRK) and Takeda.

TREATMENTS AVAILABLE

Dozens of diabetes treatments, both pills and injections, are on the market. Global sales of the medicines totaled $35 billion last year and could rise to as much as $48 billion by 2015, according to drug research firm IMS Health.

New research being presented this weekend at the annual meeting of the American Diabetes Association in San Diego will focus on experimental drugs and ways to combine classes of medicines to better control blood sugar.

"This is a chronic, progressive condition," said Dennis Urbaniak, vice president of Sanofi's diabetes division. "What we are most worried about is the number of people out there with diabetes that is not optimally controlled."

For the Lancet study, the largest of its kind for diabetes, researchers analyzed fasting plasma glucose (FPG) data from 2.7 million participants aged 25 and over across the world, and then used advanced statistical methods to estimate prevalence.

They found that between 1980 and 2008, the number of adults with the disease rose from 153 million to 347 million. Seventy percent of the rise was due to population growth and aging, with the other 30 percent due to higher prevalence, they said.

The proportion of adults [worldwide] with diabetes rose to 9.8 percent of men and 9.2 percent of women in 2008, compared with 8.3 percent of men and 7.5 percent of women in 1980.

Diabetes has taken off most dramatically in Pacific Island nations, which now have the highest diabetes levels in the world, the study found. In the Marshall Islands, a third of all women and a quarter of all men have diabetes.

Among wealthy countries, the rise in diabetes was highest in North America and relatively small in Western Europe. Diabetes and glucose levels were highest in United States, Greenland, Malta, New Zealand and Spain, and lowest in the Netherlands, Austria and France. The region with the lowest glucose levels was sub-Saharan Africa, followed by east and southeast Asia.‹

[DewDiligence]

NVO expands in China:

http://www.novonordisk.com/press/news/news.asp?sShowNewsItemGUID=25fccf0e-50a0-4b71-9ecd-b90ea44a87ee&sShowLanguageCode=en-GB

As the first multinational company to open a research centre in China in 1997, Novo Nordisk now reaffirms its long-term commitment to the country by investing an additional 100 million US dollars to expand its state-of-the-art science facilities in Beijing.

The new 12,000m2 centre will make it possible to increase the number of science employees from the current 130 to 200, with extra space available to accommodate additional future growth.

…The site in Beijing has already contributed significantly to the company’s research and development portfolio in both diabetes and biopharmaceutical target disease areas. The new, expanded facility will enable even stronger contributions from the science team in China across the range of Novo Nordisk’s protein technology, biology and pharmacology research activities.

Remember: 10% of adults in China are diabetic (#msg-48221898).

[DewDiligence]

About 2/3 of obese people live in emerging markets:

http://online.wsj.com/articles/nearly-30-of-world-population-is-overweight-1401365395

The obesity epidemic is global: 2.1 billion people, or about 29% of the world's population, were either overweight or obese in 2013, and nearly two out of three of the obese live in developing countries…

The prevalence of overweight and obese people rose by 27.5% for adults and 47.1% for children between 1980 and 2013, according to the study, led by researchers at the Institute for Health Metrics and Evaluation at the University of Washington and published Thursday in the journal the Lancet.

See #msg-79485378, #msg-52402577, #msg-74094967, #msg-64624716 and #msg-72213242 for related stories.