Brazil’s health-nutrition market: New clarity and cause for optimism

The Brazilian market for functional foods and nutritional supplements has been on an uncertain growth track in recent years. Undoubtedly, there have been strong drivers for market expansion, such as a large population (over 215 million), narrowing income disparities and a widening middle class. These catalysts are heightened by increasing awareness of, interest in, and purchasing power for nutrition products as an aid to health maintenance.

With a population paying the price for more sedentary lifestyles and unhealthy diets, the traditional Brazilian interest in looking good has compounded demand for products that support healthy living, especially in niche areas such as weight management. Brazil can also draw on its substantial agricultural resources and biodiversity to incorporate natural local ingredients such as guaraná or yerba mate into functional nutrition products.

Increasing urbanization in Brazil has led to more hectic lifestyles and heavier reliance on nutritionally substandard convenience foods. A growing female workforce is less inclined than before to cook for their own families or anyone else’s. Conversely, though, the limitations imposed by the COVID-19 pandemic have encouraged a return to home-prepared food, with an emphasis on natural and organic components.

If these broader trends generally favored nutritional supplementation and uptake of premium foods with functional benefits, in 2014 recession hit Brazil hard, interrupting growth in a sector that relied on willingness to look beyond household essentials. Optimism about the nutrition and wellness trend started to pick up once the recession was over. More recently, though, the COVID-19 pandemic has dealt the economy another heavy blow.

Moreover, despite an encouraging return to growth – gross domestic product was up by 4.6% year to year in 2021 – Brazil’s economic woes are far from over, including spiraling inflation that has pushed up food prices significantly. In parallel, average consumer purchasing power declined by an estimated 7% in 2021.

All the same, the pandemic has brought good reasons to step up nutritional reinforcement, notably through vitamin C and D supplementation. And the wider importance of addressing disease risk proactively is not lost on the Brazilian population. According to Mintel’s Future of Nutrition: Health and Wellness 2021 report, 56% of consumers in Brazil aspire to a diet that reduces the risk of lifestyle diseases such as hypertension and diabetes.

Ambiguities and constraints
Pinning down the size and potential of Brazil’s health nutrition market is complicated by ambiguities and constraints in national food legislation. For example, the regulatory framework lacks a distinct category for functional foods.

The nutraceutical market for the whole of Latin America, in which Brazil plays a substantial part, was valued at $13.25 billion in 2021, with a forecast compound annual growth rate of 7.96% to $19.43 billion in 2026. Previous estimates have put Brazil’s share of the total Latin American nutraceutical market at around 25%. Unlike vitamin and mineral supplements, or foods for weight control, any novel food or nutrition product (including food supplements) carrying health or functional claims in Brazil has until recently required pre-market registration by ANVISA, the national health surveillance agency.

Herbal products are treated as phytomedicines and must also be registered, which can be a lengthy and onerous process. For food products making health or functional claims, a scientific dossier with evidence of health benefits, safety and quality is required for evaluation by a special technical committee at ANVISA. Due to the time and expense involved, functional foods are often launched as ordinary food products without health claims, or bearing only generic healthy-living messages. Health claims may only be made in line with the agency’s positive list of standardized functional claims for food ingredients, with no deviation possible in wording or claims. Advertising and marketing of claims must not differ from food labelling.

More clarity for food supplements
Some clarity, at least for the dietary-supplement segment of the Brazilian market, came with the introduction in July 2018 of Resolutions No. 239, 240, 241, 242 and 243, plus Ordinance No. 28/2018. The new regulations laid out a specific framework for the definition, composition, quality, safety and labelling of food supplements. These were categorized as products in drug-like formats designed to supplement dietary health with nutrients, bioactive substances, enzymes or probiotics. The regulations included a list of authorized ingredients for use in food supplements, permitted maximum levels for those ingredients, and a list of authorized nutrition or health claims.

Previously, food supplements in Brazil had fallen under differing regulations, depending on the product category. The new rules stipulated that only food supplements containing enzymes or probiotics, or bearing functional and/or health claims (i.e., those not on the authorized list), need go through a pre-market registration process with ANVISA. Existing products had five years to comply.

Market watchers saw the regulatory changes as an opportunity to launch safer and better-quality food supplements with higher ingredient concentrations. There was also potential to make health claims on ingredients (e.g., resistant corn starch) where previously claims had been either outlawed or subject to regulatory ambivalence.

Other causes for optimism about Brazil’s nutraceutical market include:

• Growing concerns about unhealthy diets and sedentary lifestyles – According to the Institute for Health Metrics and Evaluation at the US University of Washington, nearly 29% of Brazilians over the age of 20 were obese in 2020, up from around 15% in 2000 and representing one of the sharpest increases in any country worldwide during that period.
• An ageing population – Average life expectancy in Brazil rose from 54 years in 1960 to 75 years in 2015. Life expectancy further expanded to 76.6 years in 2019. All the same, COVID-19 has taken a terrible toll on mortality rates in Brazil. The government’s Institute of Applied Economic Research estimates that the pandemic has now reduced average life expectancy nationwide by 4.4 years to 72.2 years.
• COVID-19 – The pandemic in itself is likely to focus attention on health maintenance and disease-risk reduction, as Brazil emerges into the post-COVID world. COVID prevention and treatment strategies in Brazil, including immunization, have been muddied by the combative stance of President Jair Bolsonaro, who has preferred to pursue herd immunity. That has put the onus on the Brazilian population to take their own initiative with preventive measures.
• A shrinking birth rate – This was down by 1.91% year-on-year in 2022, to 13.059 per 1,000 people. The result is smaller families with more disposable income to spend on neonatal, pediatric or other forms of nutrition, albeit at a lower overall volume across the population.

Hostility to processed foods
One significant complicating factor for nutraceuticals contenders has been the Brazilian government’s distinctly hostile attitude to the highly processed foods, and accompanying health claims, that are mainstays of the functional-food market.

Dietary guidelines issued by the government in early 2015 to address rising obesity rates, chronic diseases and other dietary and health problems called for a ‘back to basics’ approach. This focused on minimally processed, home-cooked foods with natural ingredients, as part of a balanced diet.
The guidelines recommended limiting use of processed foods and avoiding ultra-processed foods, particularly those positioned as fortified with vitamins or other nutrients and offering premium health benefits. This did, nonetheless, create opportunities for nutrition companies to tap into the growing appetite for natural, organic and ‘free from’ foods and ingredients in Brazil. An estimated 15% of the Brazilian food-supplement market in 2019 was vegan supplements.

Moreover, the new registration requirements for food supplements containing novel ingredients, and/or carrying functional or health claims, should help to carve out a premium market segment differentiated by innovation and validated scientific evidence for product benefits. Gastrointestinal health, for example, is recognized as a particular concern for Brazilian consumers of health nutrition products. The local probiotics market is expected to generate compound annual growth of around 11% in 2022-2027.

All of this may take some time to filter through. An observational study of dietary supplements sold online in Brazil, published in October 2019 by Revista de Saúde Pública, found that 34.2% of products sampled could not be classified as dietary supplements, based on the new regulations, due to the presence of banned substances. The authors concluded that 16% of products should have been marketed as medicines, while 97.7% carried prohibited claims.

Segmentation and careful messaging
These conditions, and the dampening effects of lingering recession exacerbated by COVID-19, suggest that health-nutrition players in Brazil still have plenty of work to do.
With consumers spending cautiously in a highly inflationary environment, precise segmentation will need to come to the fore. That might mean targeting the health-conscious elderly, sports and beauty enthusiasts, high-income urban women, busy working parents or young to middle-aged adults of both sexes with busy lifestyles.

Health-nutrition messaging must be tailored carefully to what is still quite a restrictive regulatory framework, despite the welcome clarity on food supplements. Endorsements from trusted advisers such as nutritionists, dieticians, physicians and pharmacists may help in this respect. Market entrants might also consider partnering with local pharmaceutical companies that manufacture food supplements and use their drug marketing networks to promote these products to pharmacists and other healthcare professionals.

In addition, manufacturers should bear in mind the broad cultural and income diversity in Brazil. At the same time, this may drive creative segmentation and willingness to try new products. Recent indications are that, aside from probiotics (including ‘psychobiotics’ for easing stress), omega-3 dietary supplements, functional plant-based foods, muscle-health and healthy-aging supplements based on HMB (β-hydroxy β-methylbutyrate), and joint-health products containing eggshell membrane or rooster comb, maybe future avenues for growth.

Brazil may be an exacting and not always accommodating market for health-nutrition strategies, particularly in the wake of COVID-19. Yet its potential for more structured growth, and within a more transparent regulatory framework that extends beyond dietary supplements to functional foods and beverages with validated health claims, remains considerable.

It is for manufacturers and their associates to ensure through considered, balanced discussion and engagement that this evolution is rational, science-based and sustainable. That way, policymakers, healthcare professionals and consumers can truly believe in health nutrition as an essential tool for health maintenance and disease-risk reduction in challenging times.

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