COVID-19 Is Unlocking The Gates For ‘phood’ (pharma+food) In The APAC

Wednesday, May 11th, 2022

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While the concept of ‘Phood’ may be alien to the Asia-Pacific (APAC) consumers currently, the idea of food as medicine is firmly rooted in indigenous medicinal systems of the region, says GlobalData, a leading market research company.

The term ‘phood’, which represents the convergence of the pharmaceuticals and food industries, was introduced by pharmaceutical giants venturing into the human nutrition market in the West at the turn of this century. Pharmaceutical-enriched foods that blur the lines between food and medicines is a relatively novel idea for the consumers in the APAC region.

However, the concept of ‘food as medicine’ is not new to the APAC region considering the old Chinese proverb “He that takes medicine and neglects diet, wastes the skills of the physician” resonates closely with the old Western adage “Let thy food be thy medicine, and thy medicine be thy food”. Moreover, Ayurveda, the ancient Indian alternative system of medicine, emphasizes the dietary principle “If the diet is wrong, then medicines are of no use, and if the diet is right, then medicines are not needed”. As a result, the APAC consumers may be more accepting of phood innovations.

The soaring demand for functional food and drinks during COVID-19 has made way for the entry of phood in the APAC Bobby Verghese, Consumer Analyst at GlobalData says: “The novel coronavirus outbreak in 2020 escalated the health and wellness concerns, particularly among people suffering from underlying health conditions that made them more vulnerable to COVID-19 comorbidities. Even as the vaccination drive increased significantly in 2021, the emergence of new COVID-19 variants, including Delta and Omicron, continued to stoke public hygiene and health concerns. Unsurprisingly, health and wellness concerns exerted strong influence on APAC consumers’ food choices, particularly among the Gen Y consumers (Millennials) as revealed by GlobalData’s Q1 2021 consumer survey.”

Subsequently, health-conscious consumers embraced lifestyle interventions and dietary changes to stave off the viral infection. Many sought refuge in over-the-counter (OTC) medicines, nutraceuticals and supplements, homemade remedies, and fortified/functional food and drinks to stave off the viral infection. This accelerated the demand for “immunity booster” food and drinks infused with immunity supportive vitamins and minerals and botanicals such as turmeric and ginger, during the peak of the pandemic, particularly in Southeast Asian countries, as validated by GlobalData’s Q2 2021 consumer survey.

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Some of the habits gained during the pandemic are expected to stick long after the health crisis dissipates, including the consumer inclination towards health and functional foods. However, consumer demand is expected to expand beyond immunity support to broader preventative health products in the post-pandemic years. For instance, the burgeoning ageing populace, and obesity endemic in APAC countries will drive demand for preventative health claims such as digestive wellness, muscle and bone health, brain power booster, and mood enhancement.

Phood can take the functional food and drinks category to the next level Most food and beverage makers have been leveraging ingredients, such as the superfoods moringa and turmeric, that are inherently rich in nutrients and bioactive compounds with purported health and functional benefits to address consumer demand for nutrition, health, and wellness. Bolder health and functional claims are typically validated by statutory food safety authorities such as Japan’s Ministry of Health, Labor and Welfare, which issues the “foods for specified health uses” (FOSHU) certification for functional foods.

Verghese adds: “Phood represents an advancement over such conventional functional food and drinks, offering consumers with products that are enriched with pharmaceutical active compounds with clinically-proven preventive-health and functional benefits. Moreover, pharmaceutical additives can be used to formulate personalized nutrition for specific cohorts such as infants, senior citizens, working-class adults, and expectant mothers. GlobalData’s 2021 consumer survey reveals that the sophisticated pharmaceutical constituents in phood will have greater acceptance among advanced economies in the APAC, where over a third of APAC consumers somewhat/completely prefer seeing complex and scientific-sounding ingredients on the packaging.”

As phood lies in between food and medicine, regulations are more complex

Phood lies on the fine line between food and medicine, it requires approval from both, food safety regulators and drug regulators, such as the China National Medical Products Administration, and Japan’s Pharmaceuticals and Medical Devices Agency. Moreover, government and health authorities may enforce additional compliance policies for Phood given the potential side effects of the infused pharmaceutical compounds.

Additionally, it is difficult to assess whether such compounds may react antagonistically or synergistically with other biological or chemical ingredients present in various processed food and beverages, especially when they are combined into dishes or cocktails. This entails a high-risk assessment cost for developing Phood. Moreover, disclaimers may be required for Phood, requiring consumers to check with their physicians to ensure that the product will not counteract with their regular medication. Such disclaimers can ward off consumers who are risk-averse.

Only a handful of few food and beverage companies have the financial resources and research and development capabilities to develop pharmaceutical ingredients, and the expertise for conducting
clinical trials to gain approval from drugs regulators.

Despite the drawbacks, the outlook for phood is promising Verghese concludes: “These negatives aside, Phood is a promising white space that can revolutionize the food and beverage sector alongside 3D-printers, biohacking, and nootropics. For pharma players, which are languishing due to the dearth of novel, blockbuster drug launches, the prospects of gaining a foothold in the lucrative food and beverages industry is too tantalizing to dismiss. The diversification from pharma to phood will be easier for Big Pharma players such as BASF, who have already transitioned to the adjacent nutritional supplements, or food ingredients space.”