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Global Market for Clinical Nutrition and Dairy Ingredients 2015-2020

Published in September 2016

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Agenda

1. Introduction

3. Clinical nutrition ingredients

5. Appendix

4. Conclusions

2. Global market overview

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Market research approach- clinical nutrition markets and dairy ingredients used

Productscope

Marketscope

Keyplayers

Markettrends

Dairyingredients

in CN

• Infant• Standard• Special

• Enteral• Oral• Tube

• Parenteral

• Global• Europe• North

America• Asia-

Pacific• Latin

America• Rest of

World• Market values• Market

volumes• CAGR 2015-

2020

• Top 5players

• Brands• Products• Regional

players

• Distributionchannels

• Demographics• Regulation

• Usage ofdairyingredients

• WPC• WPI• MPC• MPI• MCC• MCI• Casein• Caseinates• Emerging

minor ingredients

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Clinical nutrition terminology

• Clinical Nutrition in this report encompasses the total market for products made available to consumers through prescriptions from healthcare professionals, i.e. doctors, medical personnel, pharmacies, or OTC that must be administered under medical supervision

• These products are designed for people with specific nutritional needs that cannot be met through a normal diet, e.g. critically ill, malnourished, and patients with metabolic disorders

The clinical nutrition market can be categorised into three primary market segments in line with industry norms:

Infant clinical nutrition: Refers to infant formula products for infants between 0-6 months of age and specially formulated products for infants with specific nutritional needs

Enteral clinical nutrition: Comprised of two subcategories oral nutritional supplements and enteral tube feedingfor people who are unable to meet their nutritional needs through an oral diet

Parenteral clinical nutrition: Refers to products delivered intravenously, straight into the blood stream when nutritional needs cannot be met through oral or enteral nutrition

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Market drivers and constraints- clinical nutrition market and dairy ingredients used

Market drivers

Population demographics

Increased incidence of diagnosed diseases

Increased awareness of nutritionbenefits in disease management

Evidence of effect

Financial perspectives

Market constraints

Regulation

Physicians knowledge of(dairy) nutrition benefits in

disease management

Consumer confidence inproducts’ health claims

Product pricing

Several market drivers and constraints for the clinical nutrition market and the use of dairy ingredients in this market can be identified and are listed below:

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Clinical nutrition market split by category- infant formula is the largest category

Infant formula (0-6 months)Market size (2015): USD xx mio

Special infant formulaMarket size (2015): USD xx mio

Parenteral nutritionMarket size (2015): USD xx mio

CAGR 2010-2015: 5%CAGR 2015-2020: 5.1%

Clinical nutrition

Total market size (2015): USD xx mio

Enteral nutrition

Market size (2015): USD xx mioCAGR 2010-2015: 7.1%CAGR 2015-2020: 5.8%

Infant formula

Market size (2015): USD xx mioCAGR 2010-2015: 9.7%CAGR 2015-2020: 6.6%

41%

10%

36%

13%

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Infant clinical nutrition- market size by region

North America

Market size (2015): USD xx mTotal volume (2015): xx MT

Europe

Total value (2015): USD xx mTotal volume (2015): xx MT

Asia-Pacific

Market size (2015): USD xx mTotal volume (2015): xx MT

Rest of the World

Market size (2015): USD xx m Total volume (2015): xx MT

Infant clinical nutrition market size and growth- segmented by regions

Total value: USD xx mTotal volume: xx MT

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Enteral nutrition market by region- North America dominated sales in 2015

31%

28%

23%

12%

6%

Regional split of global

enteral nutrition market,

2015

North America Europe Asia-Pacific

Latin America Rest of World

2010 2012 2015 2020

Enteral nutrition market size and

forecast to 2020

US

D m

io

7.1%CAGR

5.8%CAGR

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2010 2012 2015 2020

Parenteral nutrition market size and forecast to 2020

Parenteral nutrition market- Asia-Pacific region currently growing fast

US

D m

io

5%CAGR

5.1%CAGR

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Diagnostics

23%

Established

pharmaceuticals18%

Vascular

14%

Other

11%

Adult

16%

Pediatric

18%

Nutritionals

34%

Division share of sales, 2015

Abbott Laboratories Inc.- No. 1 in adult clinical nutrition

19,657

20,24720,405

18.500

19.000

19.500

20.000

20.500

21.000

2013 2014 2015

Sales

US

D m

io

• Abbott is the global leader in adult nutrition, a segment mostly consisting of clinical nutrition products and accounting for 46% of Nutritionals segment and currently expanding operations in Asia, China in particular

• Pediatric nutrition product sales accounts for 54% of Nutritionals some of which can also be characterised as infant clinical nutrition products

• Abbott is estimated to have had sales of standard milk formula of approx. USD 1.6 bn in 2015 forecast to grow with a CAGR above 7% towards 2020

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New products development- launches in the clinical nutrition market

# o

f p

ro

du

cts

lau

nch

ed

Source: Innova Market Insights

• 5174 new clinical nutrition products were launched between 2010-2016, majority of which in Western Europe followed by North America and Asia

• Out of these product launches, 2,833 contained dairy ingredients

• The most active NPL companies in this period were Nutricia (Danone) launching 1733 products followed by Nestlé with 1057 launches, trailed by Abbott with 712 launches and Fresenius-Kabi with 524 launches

376267

1418

977

682

840

614

0

200

400

600

800

1000

1200

1400

1600

2010 2011 2012 2013 2014 2015 2016

Number of new products 2010-2016- Separated by years

59

9

20

51

6

267

428

Number of new products 2015- Seprated by region

Asia Australasia East Europe

Latin America Middle East North America

Western Europe

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Danone- infant nutrition product examples

Description:Aptamil First Infant milk is a nutritionally complete formula for infants between 0-6 months as a supplement or as an alternative to breastfeeding with products coming both in liquid and powdered forms

Ingredients include: Demineralized whey powder, Vegetable Oils, Lactose, Skimmed milk powder, Galactooligosaccharides, Whey Protein Concentrate, Fructooligosaccharides, etc.

Description: Infatrini is a Food for Special Medical Purposes for use under medical supervision. Infatrini is a nutritionally complete, energy dense, RTD or tube-fed product for dietary management of infants between 0-18 months with faltering growth, or who have increased nutritional requirements and/or require fluid restriction

Ingredients include: Skimmed Milk Powder, Maltodextrin, Vegetable Oils, Lactose, Whey Protein Concentrate/Whey Protein Isolate, etc.

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Nestlé- enteral nutrition product examples

Description: Boost High Protein is a ready-to-drink product designed for people who need to increase their protein intake

Ingredients include: Water, Sugar, Milk Protein Concentrate, Corn Syrup, Vegetable Oils (Canola, High Oleic Sunflower, Corn), Cocoa, Soy Protein Isolate, Calcium Caseinate, Sodium Caseinate, etc.

Description: Peptamen is a 1.0 kcal/ml enteral tube feed formulated for optimal digestion and absorption for patients with impaired gastrointestinal function. It is a 100% whey protein based formula with 70% of the as Medium-Chain Triglycerides. Peptamen is a nutritionally complete Food for Special Medical Purposes

Ingredients include: Water, Maltodextrin, Hydrolysed Whey Protein (from milk), Medium-Chain Triglycerides, Corn Starch, Soybean Oil, Minerals, etc.

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Volume

Proteincontent

(avg. 11%)%

wheyWhey

proteinWPC share

WPC (100%protein)

WPC (80% protein)

Standard infant formula

570,000 MT 62,700 MT 60% 37,600 MT 40% 15,000 MT 18,800 MT

Special infant formula

130,000 MT 14,300 MT 50% 7,200 MT 90% 6,500 MT 8,100 MT

Total 700,000 MT 77,000 MT 44,800 MT 21,500 MT 26,900 MT

Whey proteins for infant formula- whey protein concentrate volume estimation

• Using the same methodology applied in estimating volumes of DWP used in infant formula, it has been possible to estimate the volume usage of WPC in infant formula

• Assuming that WPC accounted for the remaining 40% of whey protein content in standard infant formula, 90% in special infant formula, and adjusting for a protein content of 80%, it has been estimated that approx. 18,800 MT of WPC was used in standard infant formula, approx. 8,100 MT in special infant formula, amounting to a total demand of WPC for infant clinical nutrition of approx. 26,900 MT in 2015

• Applying the CAGR of 5% towards 2020, it can be estimated that demand for WPC in infant clinical nutrition will grow approx. 1,500 MT per year to reach approx. 34,000 MT in 2020

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Dairy ingredients in enteral nutrition- estimation of milk protein ingredient volumes

Milk protein• As per the assumptions for milk protein and adjusting for a protein content of 80%, it is estimated

that demand for milk proteins for enteral nutrition amounted to approx. 20,000 MT in 2015. It is estimated that around half of this demand is for MPC/MPI and the other half is for caseinates

• Assuming volume growth to be similar to the value CAGR of 5.8%, the enteral nutrition market has been forecasted grow, the demand for these proteins will grow approx. 1,300 MT each year towards 2020 ultimately reaching a demand of approx. 26,400 MT

Vo

lum

e (

MT)

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Emerging dairy ingredients

• Protein Hydrolysates are easily ingestible dairy proteins as they are already partially digested through the breakdown into peptides, thereby permitting better absorption in the stomach and making the protein non-allergenic. Low viscosity of these proteins makes them suitable for enteral nutrition, however bitter taste makes them more ideal for tube feeding products

• α-Lactalbumin is the primary whey protein found in human breast milk accounting for 20% of total protein and containing all essential amino acids and BCAAs needed by humans, thus making it an important protein for growth in infants. In whey from cow’s milk, β-Lactoglobulin which is not contained in human breast milk accounts for approx. 50%, and α-Lactalbumin for around 20-25%. Some premium infant formulas are produced using α-Lactalbumin for this reason

• Galactooligosaccharides are prebiotics that raises levels of certain probiotic bacteria supporting healthy gut flora and immune system function. Usage of GOS in infant formula has increased strongly in recent years. Increased use has also been seen in enteral nutrition, but at a slower rate

• Lactoferrin is a glycoprotein present in both cow and human milk with highest concentrations in the latter. It is an essential factor in immune response and particularly important to the health and functioning of the intestinal tract. In Asia, Lactoferrin is widely used in the infant formula

• Transforming Growth Factor-β2 (TGF-β2) is an exogenous polypeptide present in both human and cow milk. TGF-β2 has immune modulating functions that have been used in enteral nutrition to treat inflammatory bowel disease and Crohn’s disease

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Global Clinical Nutrition Report – project management and costs

3A Business Consulting team:

– Managing partner - Tage Affertsholt

– Junior consultant – Daniel Pedersen

Report available in PDF format – in total more than 90 slides – from September 2016

EUR 3,700

Time

Team

Cost