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Paul Yamaguchi is president of the research and consulting firm Paul Yamaguchi & Associates  and also writes regularly for NPIcenter.com , an online resource for information on the nutraceuticals, nutrition, dietary supplements, cosmeceuticals and food industries.  He spoke with JETRO in May 2006 about the key areas to watch in Japan’s nutraceuticals market.

Could you give a snapshot of the nutraceuticals markets in Japan and the U.S.? 

Yamaguchi:  The nutraceuticals market in Japan is currently about $27.1 billion, with dietary supplements making up about $10 billion and functional foods about $17 billion.  By 2010, it will be a $35 billion industry if the market continues to grow at about 7% each year.

In the U.S., dietary supplements stand at $20 billion and functional foods at $22 billion. The U.S. definitions for nutraceuticals are different from those in Japan, but $42 billion is what reports indicate.

What trends have you been seeing in the Japanese nutraceuticals market over the past few years?

Yamaguchi:  The Japanese nutraceuticals industry is supported largely by women. Sixty five percent of the consumers of nutraceuticals are women, who seem to take care of their health better than men. 

Also, a growing number of the baby boomers are growing older, and they want to be healthier and look more attractive.  So cosmeceuticals, the cosmetics sector of the nutraceuticals industry, has been growing rapidly in the last few years.

You wrote in an article for the JETRO Midwest Newsletter that Japan has become a country of seniors.  Do you think companies focused on the long term may see this as a temporary market that will shrink in the near future?

Yamaguchi:  There is nothing short term about this market.  In 2005, 25 million people were 65-years old and older, or about 20% of the population.  In 2010, 34 million people will be older than 65 years old, or about 26% of the population.  And by 2050, 35% of the Japanese will be 65 years and older, and they are the prime consumers for nutraceuticals, so the market will not shrink but will grow.

In addition, a declining birth rate, longevity and skyrocketing health care costs drive growth in the nutritional industry. This is not just happening in Japan, but most of the developing nations will face these social trends in the near future. That’s why the rest of the nations are watching how the Japanese government handles this 21st century’s global health care crisis, and I think nutraceuticals will play a large part in helping to alleviate this coming crisis.