by Stephen L. DeFelice, M.D. Chairman
In 1989, the Foundation coined the term nutraceutical in order to give an identity to a highly promising area of health and medicine.
After this, the Foundation launched and continues to pursue “The Nutraceutical Initiative”. Its primary objective is to establish a nutraceutical research-oriented, academic-industrial complex in order to dramatically increase discovery. A Foundation white paper, “The Nutraceutical Initiative: A Proposal for Economic and Regulatory Reform”, was published in December 1991 spelling out ways to bring this about.
Recently, there have been numerous articles, reports, and conference announcements regarding nutraceuticals. Virtually all of these events deal with the nutraceutical marketplace instead of the need to encourage nutraceutical research. In addition, it seems that each party has created its own definition of a nutraceutical which is (a) creating more confusion in an already confused lexicon of food nomenclature, and (b) misrepresenting the nature and size of the true nutraceutical market.
For this reason, the Foundation wishes to restate and clarify the original and true definition of the term nutraceutical, and comment on the nature and size of the true nutraceutical market.
A nutraceutical is any substance that may be considered a food or part of a food and provides medical or health benefits, including the prevention and treatment of disease. Such products may range from isolated nutrients, dietary supplements and diets to genetically engineered “designer” foods, herbal products and processed foods such as cereals, soups and beverages.
It is important to note that this definition pertains to all categories of foods. It ranges from dietary supplements such as folic acid used for the prevention of spine bifida to chicken soup taken to lessen the discomfort of the common cold. It includes a bioengineered designer vegetable food rich in antioxidant ingredients to a stimulant functional food or pharmafood.
The rationale behind the nutraceutical definition is to establish a noncomplicated system regarding medical and health claims. Once established, the Foundation believes that nutraceutical research and discovery will dramatically increase.
Regarding the nature of the nutraceutical market, it contains primarily two types of products potential nutracouticals and established nutraceuticals. A potential nutraceutical is one that holds a promise of a health or medical benefit. It becomes an established nutraceutical only after there are sufficient clinical data which demonstrate such a benefit. Thus, folic acid was a potential nutraceutical until sufficient clinical evidence for the prevention of neural tube defects was generated to make it an established one, and ginseng remains a potential nutraceutical because of a lack of such evidence. It is important and sad to note that the overwhelming majority of nutraceutical products are in the potential category which are waiting to become established.
Regarding the U.S. market size, it far exceeds the figures commonly quoted which are almost all less than $10 billion annually. This is a gross distortion of the true nutraceutical market due principally to incorrect (and often unstated) definitions of a nutraceutical. If one would use the true definition of a nutraceutical, the potential market size leaps to levels of another dimension.
The total U.S. retail food market in 1992 was $503 billion ($320 billion at home and $183 billion at out-of-home locations such as restaurants). This market far exceeds the combined pharmaceutical (approximately $70 billion) and OTC (approximately $24 billion) 1992 retail markets which total $94 billion. It is not unreasonable that 50% of this food market includes foods that are used for nutraceutical reasons. It is generally accepted that dietary supplements, sugar substitutes, fat substitutes, fiber enriched foods, vegetables, virtually fatless meat, skim milk, low-calorie diets, etc. are consumed for health or medical reasons. Couple this with the fact that 100 million Americans take dietary supplements daily, it then becomes compellingly evident that an enormous foundation for an established nutraceutical market exists.
Using 1992 data and assuming that at least 50% of food is used for medical or health reasons, we arrive at a $250 billion potential nutraceutical market which is approximately 2.5 times the combined ethical pharmaceutical and OTC markets!!
(It is not unreasonable to assume that in the EEC, with a larger population than the U.S., its potential nutraceutical market is at least equal to ours, which adds up to a combined market of $500 billion!)
Personal Comments
Though we are pleased with the rapidly increasing interest in the nutraceutical revolution, we are profoundly disappointed that the emphasis has primarily focused on the nutraceutical market and not on the need to establish a vibrant nutraceutical research community which is absolutely necessary to convert the majority of potential nutraceuticals to established ones thereby truly delivering their enormous benefits to all of us. Let’s not fool ourselves. Nearly all nutraceuticals that Americans take are potential and not established ones.
In the past, the Foundation urged the Congress to enact the Nutraceutical Research and Development Act based on common sense and historical precedence. The reasoning behind this proposed act was based on the overwhelming success of the Orphan Drug Act. To date, the Nutraceutical Initiative has not yet spawned any champions in the Congress nor in the medical, scientific, industrial and consumer communities.
We hope, however, that the awareness of the sheer economic vastness of the potential nutraceutical market will be substantially more persuasive than the failed common sense and historical precedence approach. In fact, we are fairly sure that once this vastness is understood and believed – in one way or another – nutraceutical research will begin to flourish mightily due to the energy and creativity of American capitalism.
From a press release dated March 24, 1994