Health+

The Market for Microbiome Products

Jan 8, 2021 | microbiome, white paper

PREPARED BY VIGR FOR MANNA TREE; January 2021. By: Jayson L. Lusk, Distinguished Professor and Head, Department of Agricultural Economics Purdue University

OVERVIEW

There is significant interest among some consumer segments for products designed to affect the microbiome – the bacterial, viral, and fungal ecosystem of our digestive systems. Products containing probiotics aim to increase the presence of certain bacteria in the gut. The most common probiotics strains are in the genus Lactobacillus, but other common probiotic products include strains in the Bifidobacterium, Streptococcus, and Bacillus families. Probiotics are used in human food and beverage, animal feed, dietary supplements, and cosmetics. Various probiotics are thought to improve gut health, assist in weight management, fight disease and infection, and improve mental health, among other claims.

np_Woman+eating+yogurt+parfait+on+rustic+table_43xlOb_free.jpg

The global market for probiotics is anticipated to reach $69 billion by 2024, with about two-thirds of the total represented by food and beverage, about 20% by supplements, and the remained animal feed. Dairy products are most popular within the food and beverage category, representing 60% of all sales in 2019, followed by non-dairy beverages (20% of all sales) and infant formula (10% of sales). The estimated global compound annual growth rate for the food and beverage probiotics is estimated at 7.3% from 2019 to 2024. The North American market for probiotics is estimated to reach $17.4 billion by 2024 and experience a 7.1% compound annual growth rate from 2019 to 2024 (Kumar, 2020).

In addition to the “regular” use of probiotics in consumer products, they are sometimes used therapeutically by medical professionals to treat certain diseases or ailments, and there has been rising interest among the medical establishment to explore therapeutic treatments. In some cases, antibiotics are used to eliminate existing gut microbes before repopulating them with a probiotic. Also, it is increasingly recognized that prebiotics play an important role in the functioning of probiotics. Prebiotics can be thought of as the “feedstock” for bacteria and yeast in the digestive system. Various fibers, which are digestible by bacteria but not humans, are considered to be good prebiotics. Several probiotic products are used in animal feed to improve average daily gain and promote growth; an aspect of the use of probiotics in animal feed that differs from human applications is the ability to control the entirety of animals’ diets, including potential prebiotics.

While there are several commonly used probiotics in food and beverage products, the science linking particular bacterial strains and particular health outcomes and describing how these relationships are mediated by diet and prebiotics is still emerging. There is reason to believe that, in many cases, positive health outcomes are associated with a mix of bacteria (or an ecosystem) rather than a single strain. Developments in high-throughput microbial genomic sequencing aim to better characterize a gut ecosystem and develop predictions about relationships between ecosystems and health outcomes.

One curious line of research that has increased interest in the gut microbiome shows significant differences in fecal microbiomes from animals and humans with and without certain conditions such as obesity or diabetes. These findings have led to fecal transplant studies, which have mainly been conducted in mice but are being considered in humans. The studies take stool from a donor animal with desirable characteristics and transplants it into a recipient animal with undesirable characteristics. Such studies have shown the importance of gut microbes in affecting allergic reactions to food ingredients (Feehley et al., 2019), lifespan (Bárcena et al., 2019), and obesity (Ridaura et al., 2013), among others. Fecal transplant studies in humans remain in their infancy, and positive benefits to date relate to treating recurrent Clostridioides difficile infections (Allegretti et al., 2020).

Lusk_Biome+Market_White+Paper.jpg

Figure 1. Per-Capita Consumption of Milk and Yogurt 1990-2019  

source: Lusk calculations based on USDA, ERS data at https://www.ers.usda.gov/data-products/dairy-data/

CONSUMER RESEARCH

There are several academic studies on consumer preferences for and attitudes toward “functional foods” primarily in Europe and South America (e.g., Plasek and Temesi, 2019). Still, less is known about specific probiotics used in particular applications. It is also the case that consumer knowledge of probiotic foods remains low among the general public. For example, in 2016, Lusk (2016) found in a nationwide U.S. survey that only 14% of consumers at that time had heard of kombucha. They gave it an average health rating (1=very unhealthy, 5=very health) of only 3.3 behind products like chia seed (3.79), quinoa (3.79), and beef (3.51). Likewise, in 2008 in Brazil, Viana et al. (2008) found that only 29% of respondents could define probiotic foods correctly, and 22% were unable to provide an example of a probiotic food.

As previously indicated, the most popular applications of probiotics are in dairy – particularly yogurt.  Figure 1 below reports data from the U.S. Department of Agriculture on per-capita consumption of milk and yogurt from 1990 to 2019. Yogurt consumption increased dramatically over this period, rising 280% from around 4 lbs/person in 1990 to almost 15 lbs/person in 2014. However, since 2014, consumption growth has stagnated and fell back to 13.8 lbs/person in 2019. Over this entire period, per-capita consumption of beverage milk has declined precipitously, from about 220 lbs/person in 1990 to 141 lbs/person in 2019 – a 36% reduction.

Using U.S. nationwide grocery store scanner data from 2008 to 2010, Bonanno (2016) found 81% of yogurt products sold contained a live or active bacterium (i.e., a probiotic), and 11.7% carried a health claim. On average, products with a probiotic sold at a 24% premium relative to products without the attribute, and products with a health claim sold at a premium of 7% above products without a claim, after controlling for differences in yogurt type, brand, flavor, etc. The largest yogurt premiums were associated with claims about low carbs/sugar and “natural.”

Taking a similar approach with Italian scanner data from 2010 to 2012, Bimbo et al. (2016) found for yogurt, claims with the largest price premiums are those lowering/managing the cholesterol blood level and those supporting bone health; smaller premiums were associated with claims about bowel regularity and immune system strength.

An older study by Bruhn (2002) utilized focus groups to study consumers’ perceptions of probiotics in yogurt. They found most consumers were aware of “friendly bacteria” in yogurt; however, some consumers were unaware of probiotic bacteria and perceived the inclusion of live bacteria in yogurt as risky.

Kolady et al. (2019) found, in a survey of US millennials that willingness-to-pay premiums with products with just the word “probiotic” on the label were statistically equivalent premiums on products with a general health claim, suggesting the word “probiotic” is an implicit health claim. Despite the close association of the word “probiotic” with “healthy”, it does not mean the latter implies the former. For example, in a survey of U.S. consumers, Lusk (2019a,b) queried respondents, using both open-ended and guided questions, about the meaning of the words “healthy” and “natural” on food packages. In open-ended questions about the meaning of “healthy”, “fat” was one of the most commonly mentioned words (mentioned by 10.4% of respondents) and nearly as many consumers (6.6%) mentioned sugar. Not one respondent (out of almost 1,300) mentioned probiotics in relation to how they think about “healthy.” The use of antibiotics was mentioned pejoratively by some respondents both in relation to the meaning of healthy and natural.

REGULATORY ENVIRONMENT

Given that knowledge of particular probiotics is likely to be low among many consumer segments, it is expected that sellers of probiotic products would also like to include health claims. The regulatory environment for probiotics and health claims is complex and differs significantly from country to country.

Non-therapeutic use of probiotics in food products is generally marketed under “generally recognized as safe” (GRAS) standards in the United States, which do not necessitate substantiation of health claims. In this environment, consumers may come to distrust claims of the beneficial impacts of probiotics. In a study of Canadian consumers, Hailu (2009) found that some consumer segments were more responsive than others to health claims on probiotics. In general, they found claims were most valued when verified by the government and were little trusted when made by product manufacturers. In the US, probiotics marketed as therapeutic drugs or biologics must obtain approval from the Food and Drug Administration.

In Canada, “all probiotic natural health products require premarket assessment and licensing and must be supported by evidence of strain-specific safety and efficacy under recommended conditions of use” (Kolady et al., 2019). Regulation in the European Union is more onerous and requires approval from the European Food Safety Authority (EFSA) to characterize the probiotic strain and verify health claims.

SUMMARY

The microbiome comprises trillions of microorganisms living on and inside each of us. Historically, some researchers have guessed at its role in human health, but in the last decade or so genetic sequencing techniques have illuminated this galaxy of microorganisms enough to study in detail.

As researchers unravel the complex interplay between our bodies and microbiomes, they are beginning to appreciate the full scope of the field’s potential for treating disease and promoting health.

– Zach Winn, MIT News January 2021

The U.S. and the worldwide markets for probiotic foods are expected to grow about 7% annually in the coming years. Growth in the market may be limited by lack of consumer knowledge, trust in health claims, stagnant growth in dairy and yogurt sales, and in some locations, the regulatory environment.

Nonetheless, consumers generally associate probiotics with healthiness. Moreover, emerging scientific research into the microbiome show promise in identifying particular microbiotic ecosystems, and associated prebiotic feedstocks, that have the potential to result in improvements across a broad range of human health outcomes.


REFERENCES

Allegretti, J.R., Mullish, B.H., Kelly, C. and Fischer, M., 2019. The evolution of the use of faecal microbiota transplantation and emerging therapeutic indications. The Lancet, 394(10196), pp.420-431.

Bárcena, C., Valdés-Mas, R., Mayoral, P., Garabaya, C., Durand, S., Rodríguez, F., Fernández-García, M.T., Salazar, N., Nogacka, A.M., Garatachea, N. and Bossut, N., 2019. Healthspan and lifespan extension by fecal microbiota transplantation into progeroid mice. Nature medicine, 25(8), pp.1234-1242.

Bimbo, F., Bonanno, A. and Viscecchia, R., 2016. Do health claims add value? The role of functionality, effectiveness and brand. European Review of Agricultural Economics, 43(5), pp.761-780.

Bonanno, A., 2016. A hedonic valuation of health and nonhealth attributes in the US yogurt market. Agribusiness, 32(3), pp.299-313.

Bruhn, C.M., Bruhn, J.C., Cotter, A., Garrett, C., Klenk, M., Powell, C., Stanford, G., Steinbring, Y. and West, E., 2002. Consumer attitudes toward use of probiotic cultures. Journal of Food Science, 67(5), pp.1969-1972.

Feehley, T., Plunkett, C.H., Bao, R., Hong, S.M.C., Culleen, E., Belda-Ferre, P., Campbell, E., Aitoro, R., Nocerino, R., Paparo, L. and Andrade, J., 2019. Healthy infants harbor intestinal bacteria that protect against food allergy. Nature medicine, 25(3), pp.448-453.

Hailu, G., Boecker, A., Henson, S. and Cranfield, J., 2009. Consumer valuation of functional foods and nutraceuticals in Canada. A conjoint study using probiotics. Appetite, 52(2), pp.257-265.

Kolady, D.E., Kattelmann, K. and Scaria, J., 2019. Effects of health-related claims on millennials’ willingness to pay for probiotics in the US: Implications for regulation. Journal of Functional Foods, 60, p.103434.

Kumar, A. 2020. “Probiotics in Food, Beverages, Dietary Supplements and Animal Feed.”  BCC Publishing. Report FOD035G.  January.

Lusk. 2016. Food Demand Survey. October 2016.  http://jaysonlusk.com/blog/2016/10/14/food-demand-survey-foods-october-2016

Lusk, J.L., 2019a. Consumer beliefs about healthy foods and diets. PloS One, 14(10), p.e0223098.

Lusk, J.L., 2019. Consumer Perceptions of ‘Natural’ Foods. Food Technology, 73(7), pp.42-46.

Plasek, B. and Temesi, Á., 2019. The credibility of the effects of functional food products and consumers’ willingness to purchase/willingness to pay–review. Appetite, 143, p.104398.

Ridaura, V.K., Faith, J.J., Rey, F.E., Cheng, J., Duncan, A.E., Kau, A.L., Griffin, N.W., Lombard, V., Henrissat, B., Bain, J.R. and Muehlbauer, M.J., 2013. Gut microbiota from twins discordant for obesity modulate metabolism in mice. Science, 341(6150).

Viana, J.V., Da Cruz, A.G., Zoellner, S.S., Silva, R. and Batista, A.L., 2008. Probiotic foods: consumer perception and attitudes. International journal of food science & technology, 43(9), pp.1577-1580.


ABOUT MANNA TREE

Manna Tree is a Vail, Colorado-based investment firm committed to improving human health. Manna Tree is the first investment firm to apply an ESG +Health scientific instrument to assess prospective portfolio companies and quantify their food-health impact. Fund I closed in March 2020 at $141.5M with investors from 18 countries. Five investments have been made to-date: Vital Farms, Verde Farms, MycoTechnology, Nutriati, and Gotham Greens.

ABOUT JAYSON LUSK

Jayson Lusk is a Distinguished Professor and Head of the Department of Agricultural Economics at Purdue University. He has a BS in Food Technology and a Ph.D. in Agricultural Economics from Kansas State University. Mr. Lusk was previously Regents Professor and Willard Sparks Endowed Chair in the Department of Agricultural Economics at Oklahoma State University and Assistant Professor at Mississippi State and Purdue.

Mr. Lusk is a food and agricultural economist who studies what we eat and why we eat it. Since 2000, Lusk has published more than 200 journal articles in peer-reviewed journals, including several of the most cited papers in the profession. He has served on the editorial councils of eight academic journals, including the American Journal of Agricultural Economics, the Journal of Agricultural and Resource Economics, and the Journal of Environmental Economics and Management, and Food Policy. He was elected to and served on the Southern Agricultural Economics Association’s executive committees, the Western Agricultural Economics Association, and most recently, the Agricultural and Applied Economics Association, for which he served as president. Lusk was named a fellow of the AAEA in 2015.

https://en.wikipedia.org/wiki/Jayson_Lusk

ABOUT VIGR
Vail.Innovative.Global.Research. is a philanthropic research center for innovative projects directly impacting human health. VIGR is on a mission to connect knowledge from around the world accelerating insights into action and promoting healthy outcomes. WWW.VIGRHEALTH.ORG