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1 CBI Product Factsheet: Natural Ingredients for Health Products in Spain CBI Market Intelligence Product Factsheet Cloves in Germany 1

2 Introduction Spain is a large processor of extracts and imports large quantities of medicinal and aromatic plants and extracts, often from developing countries. Although consumer demand is still recovering from the crisis, the country s traders and processors can be an interesting target for exporters from developing countries. Consumer profile Consumption of herbal medicine and food supplements is growing, even in the difficult economic situation currently affecting many Spanish householders. Interest in natural health products Traditionally, herbal products are not very popular health solutions in Spain. Consumption remains limited to a small part of the population. However, Spanish consumers are familiar with herbal health solutions, especially traditional Western herbal medicine based on domestic (temperate) species. One in three Spanish consumers is estimated to have used herbal medicinal products, especially among older consumers. Figures are even higher for homeopathy, with 33% of Spanish consumers having used homeopathic products, and an additional 27% using them on occasion or even regularly. Aromatherapy has developed as an important contribution to primary health care in Spain. More recently, foreign medicinal traditions (Chinese / Ayurvedic) have started making their way to the market. Currently, they still play a small role and the use of medicinal and aromatic plants (MAPs) based on these systems remains much lower than for temperate species. However, well documented and/or EU Pharmacopeia listed tropical MAPs are also in demand in Spain as they are used in many popular medicine products which are marketed outside of these foreign traditions. These include, for example, products based on gotu kola (Centella asiatica) and Ginseng. Trends in natural health products Ageing population: Spain s ageing population will mean higher consumption of health products to (help) remedy the various illnesses associated with old age. Moreover, both European expatriates retiring in Spain as well as Spanish elderly more often consume herbal products for their health, especially herbal medicinal products. Almost 18% of the population is currently over 65 years old, and this is expected to increase to 25% in 2029 and 39% in 2064, one of the highest rates in Europe (INE, 2014). Increased consumer awareness: There is increased demand for different health product categories, especially food supplements and herbal medicinal products aimed at preventing illnesses. Consumers are looking for healthy options in terms of food, medicines including aromatherapy, and cosmetics, due to an increased awareness of general health and wellbeing among Spanish consumers. Looking for cheap healthcare options: Spanish consumers see herbal medicinal products and, above all, food supplements as low-cost alternatives to conventional drugs, especially when looking at prevention. This is becoming more pertinent as decreasing disposable incomes have affected millions of Spanish households. Cut-back in reimbursement of prescription drugs: Spanish consumers are increasingly looking at self-medication products and food supplements where, traditionally, they would have mostly considered prescription drugs for their health care. This has changed since fewer medicinal products are reimbursed by the Spanish government. Market profile This market profile elaborates on the implementation of the EU-wide regulatory framework for herbal medicinal products and food supplements in Spain, and discusses these segments. Implementation of EU Directives The regulatory framework for herbal medicinal products and food supplements has been harmonised throughout the European Union s various member states. Therefore, legislative requirements are the same throughout these countries. Before the Traditional Herbal Medicinal Products Directive (THMPD) came into effect, the Spanish market was already dominated by large Spanish and multinational players and these companies continue to operate on the market with similar products. CBI Market Intelligence Product Factsheet Natural Ingredients for Health Products in Spain 2

3 Compared to some other European countries, such as Germany or France, the Spanish regulatory approach to food supplements is complicated, as the country has not developed positive lists for food supplement ingredients, beyond the EU list of permitted minerals and vitamins. For herbal infusions, Spain has legislation in place in terms of permitted ingredients, but the list mentioned in this document is narrow. For other ingredients, and those not prohibited on the European market (see document), companies require a market authorisation prior to marketing their products, where health authorities check the safety and legality of the ingredients and labelling. Tips: Check the The Spanish Agency for Consumer Affairs, Food Safety and Nutrition (AECOSAN, Spanish only), the government entity responsible for market authorisation for food supplements on the Spanish market. For an overview of legislative requirements for herbal medicinal products and food supplements in Europe, please refer to the CBI EU Buyer Requirements Natural Ingredients for Health Products. For more information on (non-)legislative requirements in Europe for specific health indications, please refer to the CBI Product Factsheets on Natural Ingredients. Main market segments In Spain, the herbal medicinal and food supplement segments are of a comparable size and also show a similar growth rate. As the food supplement segment contains many products which are not based on herbal ingredients, the herbal medicine segment represents the largest market segment for MAPs and extracts. Recent data are scarce, but a 2007 study estimated the market for medicinal plants and plant-based health products at 360 million. Herbal medicinal products in Spain are largely sold as self-medication. According to AEGSP, the Association of the European Self-Medication Industry, the self-medication market was hit hard by the economic crisis in Spain, especially between 2012 (with sales of 1.4 billion) and 2014 ( 920 million). Consumption of health products without prescriptions dropped drastically as consumers were cutting back on their expenditures. The market share of self-medication in the total market is very low (5%), although it has increased compared to 2011 (3%). Per capita spending stands at 19, which is low compared to other European countries such as Germany and Switzerland ( 62), but also Italy ( 30), where consumers are also more focused on prescription medicine. Since then, the market has started to recover and is expected to increase, according to Euromonitor. This is due to government budget cuts on prescription drugs; an increasingly strong focus on preventive health solutions and healthy living among consumers; and a strong marketing push by manufacturers and pharmacist associations to improve consumer perception of self-medication. Finally, part of the consumption of health products is registered as herbal teas, with a consumption of 4,300 tonnes (including fruit infusions) in 2012 (EHIA, 2012). Herbal medicinal products: The herbal medicine market in Spain was estimated to reach 220 million in 2014 (Euromonitor, 2015), which is comparable to outcomes in 2008 ( 217 million, IENICA 2008). This shows the resilience of the sector. Moreover, in recent years, the industry has been able to achieve a modest growth rate. For the coming years growth of 2% annually is expected. The Spanish herbal medicinal products market is concentrated on a few products. Since the implementation of THMPD, Spain has seen only a limited number of marketing authorisations. Up to 2014, 84 traditional use registrations were granted, out of the EU s total of 1,438. This does not compare favourably with 176 in Austria or 188 in Poland, for example. For well-established use, the numbers are 24 out of the total of 675, compared to 243 in Germany. Tip: For more information, please refer to the uptake of the traditional use registration scheme as provided by the European Medicines Agency. CBI Market Intelligence Product Factsheet Natural Ingredients for Health Products in Spain 3

4 Food supplements: The Spanish market for food supplements amounted to 259 million in 2014 (Euromonitor, 2015). This is only slightly higher than earlier sales estimates by Euromonitor in 2008 ( 246 million), but much higher than sales in 2012 ( 206 million). The market is relatively small considering the size of Spain s population, since consumers believe a varied Mediterranean diet makes using food supplements unnecessary, especially in terms of vitamins and minerals. This situation is changing slowly, because retailers and manufacturers have an increasing focus and campaigns on preventive health. The PlantLIBRA Consumer Survey, published in 2014, provides an overview of the characteristics and usage patterns of consumers of plant-based food supplements. 1 Out of the sample representing Spain, 18% consumed herbal supplements. According to the survey, the top ten botanicals most commonly used in herbal supplements in Spain are, in descending order of importance: Cynara Scolymus, artichoke Valeriana officinalis, Valerian Equisetum arvense, horsetail Foeniculum vulgare ssp, fennel Passiflora incarnate, passion flower Camellia sinensis, tea Allium sativum, garlic Taraxacum officinale, dandelion Matricaria chamomilla, German chamomile Oenothera biennis, evening primrose This shows that Spain has a large market for established herbal ingredients, mostly temperate species. However, there is also demand for established (sub)tropical species such as ginger (Zingiber officinale) and gotu kola (Centella asiatica). Capsules were the most common dosage form at 54%, followed by pills/tablets/lozenges (21%). Doses in liquid form (15%) and ampoules (10%) are also popular in Spain, when compared to the other countries in the survey. Tips: Show understanding of market realities in your promotional materials and communication. Research the PlantLIBRA Consumer Survey to determine whether your product features in it. Reference this survey when targeting Spanish companies. Note that the markets for most of these established products are highly competitive. Trade and Macro-Economic Statistics Spain is the third largest importer of MAPs and the largest importer of extracts from developing countries. This demonstrates that Spain has a substantial demand for both MAPs and extracts from developing countries, even though the country is a medium-sized market for health products. Spanish trade in MAPs Spanish imports of MAPs increased steadily from 2010 to Volume increased by 7.5% and value by 10% annually. Imports of MAPs reached 18,000 tonnes in 2014, worth 51 million. 59% of this volume originated from developing countries. Spain is increasingly sourcing MAPs directly from developing countries. This growth in direct sourcing is probably the result of industry consolidation. Imports from developing countries increased at a higher rate than imports from European countries. Compared to other European countries, Spain has a high share of developing country imports. The country is the third largest importer of MAPs from developing countries, only topped by Germany and France. Tip: Consider focusing your MAP exports on Spain, as the country plays a major and growing role for developing country suppliers. 1 This overview is based on a sample of 2,359 adults from six European countries: Finland, Germany, Italy, Romania, Spain and the UK. CBI Market Intelligence Product Factsheet Natural Ingredients for Health Products in Spain 4

5 Figure 1: Main suppliers of MAPs to Spain, in 1,000 tonnes India Peru Egypt Paraguay Morocco Other developing countries Non-developing countries Source: Eurostat (2015) Looking at import volumes, the main suppliers to Spain are developing countries (Figure 1). In 2014, the largest supplier to Spain in terms of volume was Morocco, while in terms of value France was the largest supplier. Spain s main suppliers produce a variety of MAPs: Morocco mostly produces Mediterranean MAPs, such as rosemary, and plays an increasingly important role in supplementing Spanish production; Paraguay produces various cultivated MAPs, such as yerba mate (Ilex paraguariensis), Malva blanca (Sphaeralcea bonariensis) and St. Benedict s thistle (Cnicus benedictus L.); Egypt is a large producer of, for example, German camomile (Matricaria chamomilla); Peru exports a wide range of Amazonian MAPs, such as Dragon s blood (Croton lechleri) and Cat s claw (Uncaria tomentosa); India exports a wide range of MAPs. Tunisia, formerly an important supplier to Spain, now only accounts for 0.5% of Spanish imports, compared to 4.0% in The main European suppliers of MAPs to Spain are Bulgaria, the Czech Republic and France. Bulgaria mostly exports (wildcollected) temperate MAPs. France exports a wide variety of MAPs for essential oil production and medicinal purposes (e.g. valerian and meadowsweet). Tips: If you produce temperate species, beware of competition from European and other sources (e.g. Morocco or Egypt), especially those connected with the Mediterranean. If you produce tropical species, beware of competition from South American sources, such as Peru and Paraguay. As well as being a substantial importer of MAPs, Spain is also the third largest European exporter of MAPs. Exports, amounting to 14,500 tonnes, stem from both re-exports and domestic production. From 2010 to 2014, Spanish exports increased by 25% annually in terms of volume and 36% annually in terms of value. The main destinations of Spanish exports are European countries, such as the UK (29%), France (25%), Germany (14%) and Portugal (8%). Spanish trade in botanical extracts Extracts imports into Spain were quite volatile from 2010 to 2014, but with overall growth. From 2010 to 2012, imports increased considerably, due to high imports from Italy. In 2014, total Spanish imports reached 5,000 tonnes worth 48 million. Of this volume, 42% originated in developing countries. CBI Market Intelligence Product Factsheet Natural Ingredients for Health Products in Spain 5

6 Figure 2: Main suppliers of botanical extracts to Spain, in 1,000 tonnes India China Brazil Other developing countries Non-developing countries Source: Eurostat (2015) In Europe, Spain is the largest importer of extracts from developing countries, and has the highest share of developing country imports compared to total imports. However, Spain s main extracts suppliers are still non-developing countries. The largest supplier to Spain is Brazil. This country supplied 31% of Spanish import volume, but only 2.6% of imports by value. This country has a large extraction industry, which processes MAPs from domestic production as well as from surrounding South American countries. Small, but growing, developing country suppliers to Spain include Morocco, Honduras, Malaysia, Chile and Peru. Together, these countries made up 3.4% of total Spanish imports in Tip: Explore your potential for exporting botanical extracts to Spain, as developing country suppliers play a relatively large role in the country s imports. Spain is the second largest European export market, behind Italy. As Spain exports more than it imports, a large part of the country s exports are based on domestic production of MAPs and imported MAPs. Part of the exports are likely to consist of re-exports. In 2014, exports amounted to 14,000 tonnes worth 100 million. Spanish unit export prices decreased slightly from 2010 to Export volume from Spain increased by 30% annually, while export value increased to a lesser degree, by 13% annually. Tip: For more trade statistics, please refer to the module Trade Statistics. Competition Estimated local production is provided to indicate the competitiveness of the market. Be aware that Spain is a large importer of MAPs and extracts, and these come to a relatively large extent from developing countries (as discussed in the sections above).competitive forces stem from both local production and imports. Local production Spain is an important producer of MAPs, to satisfy both domestic industrial demand as well as demand from international buyers. Production of aromatic plants (mostly lavender and lavandin) amounted to 9,800 hectares, according to the most recent agricultural survey of 2014 by the Ministry of Agriculture. Production of other industrial plants (including medicinal plants) amounted to 18,000 hectares. In its organic production survey of 2013, production of medicinal and aromatic plants was measured at 2,200 tonnes, on an area of 1,600 hectares. CBI Market Intelligence Product Factsheet Natural Ingredients for Health Products in Spain 6

7 Recent information on the species produced is not available, but earlier research by the Universidad Politécnica de Madrid identified the following species as important cultivated crops: lavender (Lavandula angustifolia), saffron (Crocus sativus), hops (Humulus lupulus), lemon balm (Melissa officinalis), peppermint (Mentha piperita), anise (Pimpinella anisum) and sage (Salvia officinalis). Wild-collected crops identified were: common horsetail (Equisetum arvense), pennyroyal (Mentha pulegium, not allowed in health products), rosemary (Rosmarinus officinalis), thyme (Thymus vulgaris) and bitter chamomile, or Manzanilla amarga (Santolina chamaecyparissus). Spain s MAP extraction and trading sector is advanced. Although there are several large players, the sector is fragmented and includes many SMEs focused on processing domestic MAPs. Information on quantities produced is not available, but examples of companies operating in this field are mentioned in the section on Main Players. Tips: If you are a producer of tropical MAPs, determine your potential for exporting to Spain. For species from the Mediterranean, the Spanish market will offer limited opportunity as domestic production, combined with imports from Morocco, will make the market highly competitive. For more information on competitive sources, please refer to the module Competition - Natural Ingredients for Health Products. Market-entry strategy Main channels for market access Spanish traders and processors of medicinal and aromatic plants are the main market entry point for producers in developing countries. As mentioned earlier, the markets for herbal medicine and food supplements have been negatively affected by the crisis and are not showing strong growth. This means that Spanish traders and processors are more strongly focusing on exports, as became apparent in the export figures provided above. This also means that the demand for certified MAPs is increasing more strongly than the relatively small domestic organic market would suggest (at 1 billion in 2012, FIBL). Spanish players are increasingly focused on meeting buyer requirements in other EU countries, including for organic and fairly traded ingredients. In practice, the distinction between traders and processors is not always clear. Many perform both functions, working with domestic and/or imported plant material. You can approach both with species to supplement domestic/regional ingredients (i.e. sub-tropical and tropical species), or temperate MAPs produced outside of the Spanish and Moroccan harvest season. According to industry sources, large Spanish herbal medicine and food supplement companies are also focusing on export markets, as their domestic market is not growing fast and is already serviced by several strong international players. Some of these companies also import dried herbs to extract themselves for use in their products directly, or carry out their own processing. However, these companies will be difficult to approach, as they have easy access to products from domestic producers. Local partnerships or representation will be important in targeting this level of the value chain. Main players Spain has several trading companies, including Tradichem and Gonmisol, which trade in a broad variety of raw materials, extracts and active pharmaceutical ingredients. Furthermore, international traders such as IMCD are also active on the Spanish market. The country has a relatively large number of processors focused on the production of extracts and active pharmaceutical ingredients such as Kemtia and Biosearch (formerly Exxentia) and dedicated plant extract producers such as Monteloeder, Nutrafur, Solutex, Natac and Pharmactive. The Spanish herbal medicinal products and food supplements industry has consolidated, as in the rest of Europe. Many players operate in both markets. The market leaders are international players, principally Arkopharma from France and Rottapharm/Madaus from Italy. The main domestic players are Uriach-Aquilea and Diafarm. A more dedicated herbal health product manufacturer is Santiveri. Aside from these and other large, multinational, players, the rest of Spain s health products industry is fragmented and made up of many small producers. CBI Market Intelligence Product Factsheet Natural Ingredients for Health Products in Spain 7

8 Tips: If you produce raw materials, you can focus on both traders and processors. Check whether they work with the (type of) species you produce and whether they import products themselves. Many Spanish players are focused on domestic/regional MAP products and have easy access to local producers, or producers in Morocco. If you produce extracts, be very specific in your market research. Before targeting extract producers, carefully determine whether you can supplement the processors product portfolio or offer another value proposition (e.g. organic certification, stable supply) that would make the supply of your extract an interesting proposition. In other cases, it would be of greater interest to target distributors. Please refer to the CBI module Market Channels and Segments for more information. Specific sources for finding additional information and potential buyers in Spain are: o FarmaIndustria - the National Association of the Pharmaceutical Industry in Spain - o Asociación Nacional Interprofesional de Plantas Aromáticas y Medicinales (ANIPAM) National Association of professionals of MAPs - o Farmespaña Industrial - o Refer to Table III in this study of Fitoterapia for an extensive list of food supplements, herbal medicinal products and self-medication manufacturers. Business culture Tips: Pay attention to differences in business culture in Europe. Your buyers marketing and purchasing staff in particular will expect you to demonstrate awareness of cultural differences and the capacity to cope with them in a professional manner. Be aware that it is common when doing business with Spanish people that they take the time to get to know you first before deciding on further business relations. Preferably approach companies in the Spanish language. Most international companies will have personnel who speak English. It is useful if documentation is translated into Spanish, as English is still not a widespread language. Check Passport to Trade 2.0 for a good overview of differences in business culture in the EU. The website provides short videos with an introduction to each country s cultural peculiarities. Useful sources Trade fairs Trade fairs and industry conferences are excellent venues for finding companies that deal with natural ingredients for health products. Some of the relevant trade fairs taking place in Spain include: Infarma European conference for the pharmaceutical industry Expo EcoSalud trade fair on natural health and healthy living. Europe-wide trade fairs relevant to the Spanish market include: Health Ingredients Europe travelling trade fair Vitafoods, in Switzerland Sana, Bologna. Trade press/news Nutra Ingredients: News on supplements and nutrition in Europe. Foodnavigator: Science and nutrition research, product news, newsletter, health and nutritional ingredients. Nutraceuticals World: News, buyers guide on various herbs and botanicals, knowledge centre and market, peerreviewed and supplier research. Nutraceuticals Now (spring issue): Technical review of functional products and ingredients which are defined as disease preventing and/or health promoting in addition to nutritional value. CBI Market Intelligence Product Factsheet Natural Ingredients for Health Products in Spain 8

9 Organisations The most relevant organisations where you can find (market) information and companies of interest are: ICMAP - International Council for Medicinal and Aromatic Plants Fitoterapia: The Spanish Natural Medicine Association ANEFP - The Spanish Self-medication Association FarmaIndustria - The National Association of the Pharmaceutical Industry in Spain. More information CBI market information: Promising EU export markets. EU Expanding Exports Helpdesk go to trade statistics. Eurostat statistical database of the EU. Several queries are possible. For trade, choose EU27 Trade Since 1995 By CN8. International Trade Statistics - you have to register. CBI Market Intelligence Product Factsheet Natural Ingredients for Health Products in Spain 9

10 CBI Market Intelligence P.O. Box AC The Hague The Netherlands This survey was compiled for CBI by ProFound Advisers In Development in collaboration with CBI sector expert Klaus Duerbeck Disclaimer CBI market information tools: November 2015