Frutarom targets Korean market with healthy plant extracts
trials in South Korea to tap into the strong growth of functional
food and beverages in this market.
Othmar Schmidiger, manager of the Israeli firm's Korean operations, said that the company wanted to be able to offer extracts that are supported by science and can be promoted using health claims.
Health claim regulations have been tightened under Korea's Functional Health Foods law that has been in effect since 2004. While Frutarom also carries out trials in Europe, Schmidiger said the Korean food authority (KFDA) requires data to come from studies done in Korea.
The firm's green mate was tested in trials last year and is currently going through the regulator's approval process. It has been shown to have a positive effect on the body's fat metabolism.
"With this we will be able to introduce finished product concepts, like slimming foods and beverages that mention weight loss on the package," Schmidiger told AP-Foodtechnology.com.
The law also requires safety data from in vivo studies and toxicological data.
Frutarom's olive leaf extract, already tested in trials in Germany, is also likely to be studied in Korea with the aim of being added to the KFDA's list of approved functional foods, said Schmidiger.
"Our target is to be listed under this law. Once a product is on the list, the growth potential will be in the thousands of per cent," he explained.
While most of the leading flavour houses are present in South Korea, Frutarom sees itself as the market leader in herbal extracts, and current interest in health food among Koreans is creating an attractive niche market.
"Our sales growth will definitely be in the wellness field," confirmed Schmidiger.
Despite a general downturn in consumer spending during 2005, sales of health drinks are booming, with green tea products more than doubling last year to KW50 billion (€42.3m), according to a Yonhap news report earlier this year. Sales of functional drinks also jumped 25 per cent.
Fruatrom has been present in South Korea for around 20 years, initially setting up production plants to process herbal extracts collected from the wild. It has now switched to herb plantations in Europe but still sources Korean fruits and plants for new product development.
The company already sells around 20 different herbal extracts in Korea, including its pine cone extract, a popular choice in beverages. Frutarom may develop some new pine extract concepts this year.
"Pine has an image of freshness," said Schmidiger and is therefore popular with people living in crowded cities.
There is also high consumer demand for natural products, making herbal extracts a growing choice for food makers. New regulation on the use of artificial colours led to an industry-wide preference for natural ingredients.
Korea may be one of the smaller markets in the Asia-Pacific region but its 48 million inhabitants have higher purchasing power than its bigger neighbour China and south-east markets. GDP per capita during 2005 was estimated at US$20,400 compared with just US$6,300 in China, according to the CIA's country factbook.
