Consumer insights and research innovation from Japan

1. Consumer insights and research innovation from Japan 11th July 2019 Okada Yumika, FANCL Research Institute, FANCL

2. Agenda • What it takes – how the rapidly ageing population leads the social system and market to be changed • Trends in Japan – emerging health claims for healthy ageing in Japan • The search for effectiveness – undertaking research for competitive product development • Towards the market – strategies involving younger consumers to bring in healthier older age

3. What it takes An increasing aging population in Japan Aging in Japanese population is rapid and expected to keep its top position in the world until 2060. Graph from Japanese Ministry of Health、Labour and Welfare. Aging ratio; population ratio of 65 year-old and over.

4. What it takes Rapid increase in aging population lead - excess medical expenses which places financial burden on the government Amount: trillion yen These problems drove government to act - for solution to extend healthy life expectancy. year Graph from Japanese Ministry of Health、Labour and Welfare. medical expenses of 75 year-old and over

5. What it takes Rapid increase in aging population lead -deficiency in working power Amount: ten thousand people These problems drove government to act for extension of mandatory retirement age to secure human resources (which means older people need to be healthier as good as workers) year Graph from Japanese Ministry of Education、Culture、Sports、Science and Technology. Japanese labor force population.

6. What it takes In short, Rapid increase in aging population lead - excess medical expenses - deficiency in working power These problems exposed needs - for extension of mandatory retirement age - for solution to extend healthy life expectancy. to bring innovation in healthy aging market including new system for functional food.

7. What it takes “Foods with Function Claims” The Consumer Affairs Agency launched a new system for functional food. New system can label a function claim while general foods including health supplements cannot label a function claim in 2015. Pharmaceutical and food grouping map according to function claim labelling From “ Guidance for Industry” published by Consumer Affairs Agency, Japan.

8. What it takes “Foods with Function Claims” • - These new trend yielded a new market of “Foods with Function Claims”. • - It also expanded “healthy aging market”. million yen million yen 17 18 19 20 21 22 23 (est) (expect) (expect) (expect) (expect) (expect) 2015 2016 2017 2018(est) 2019(expect) Cognitive function related supplement market as a example of healthy aging market. Market of “Foods with Function Claims” expanding.

9. Agenda • What it takes – how the rapidly ageing population leads the social system and market to be changed • Trends in Japan – emerging health claims for healthy ageing in Japan • The search for effectiveness – undertaking research for competitive product development • Towards the market – strategies involving younger consumers to bring in healthier older age

10. Trends in Japan • Previous- Traditional, local or rural materials are preferred by aged consumers that are believed to bring entire unhealthy state to be better. • Current– products clearly focused on specific symptom or body parts disorders have been established as categories for aged consumers, that is accelerated by “Foods with Function Claims”. • Products to support aged consumer’s healthy life which expands its market are; eye care, muscle support, joint and bone health, and cognitive function health.

11. Trends in Japan Eye support Claims (e.g.) :this product helps relaxation of temporary stiff neck and shoulders due to eye use as well as accommodation to close point. Lutein is reported to increase macular area pigment which protect eye from light stimulation, and improve contrast sensitivity (helps to make the vision clearer through amelioration of unclearness). Evaluation methods (clinical trials, e.g.) : measure near point accommodation, questionnaire regarding fatigue arise from overuse of eyes. Materials (e.g.) : astaxanthin, lutein, billberry (anthocyanins), crocetin

12. Trends in Japan Muscle support Claims (e.g.) : This product helps improvement of walking ability thorough supporting people 60years or older whose muscle synthesis is declined due to aging, together with light exercise like bending knee exercises . Evaluation methods (clinical trials, e.g.): walking distance within a time, walking speed of a distance. Materials (e.g.): HMB（3-hydroxy-3-methylbutyrate）, leucin 40％ containingessential amino acid, 5,7-dimethoxyflavon contained in black ginger

13. Trends in Japan Joint health Claims (e.g.) :This product has function which supports movement of the knee joint and ameliorate uneasiness. Evaluation methods (clinical trials, e.g.):JCOM ( Japanese Knee Osteoarthritis Measure), JOA (Japan Orthopaedic Association) score, WOMAC ( Western Ontario and McMaster Universities Osteoarthritis Index ) Materials (e.g.): proteoglycan contained of salmon nose cartilage / type II collagen contained of salmon nose cartilage, glucosamine HCl salt,non-denaturing type II collagen、 EPA and DHA contained of krill oil.

14. Trends in Japan Bone health Claims (e.g.) : It is reported that it has a function useful for retaining bone component. This items is suitable for lady after climacteric period who want to maintain bone healthy. Evaluation methods (clinical trials, e.g.):urine DPD (deoxypyridinoline) as a marker for osteoclastic activity evaluation. Materials (e.g.):soy isoflavone, beta-cryptoxanthin

15. Trends in Japan Cognitive function Claims(e.g.): It maintain the memory of a middle-aged and older as a part of the recognition function which decline according to aging (the ability to memorize and recall words or figures). Evaluation methods (clinical trials, e.g.): test to measure memory ability such as immediate recall and delayed recall including evaluation of quickness or accuracy using words, paragraph or pictures. Materials (e.g.): flavonoid glycosides contained in Ginkgo extract / terpene lactone contained in Ginkgo extract , EPA・DHA, chicken plasmalogen、soy phosphatidylserin.

16. Agenda • What it takes – how the rapidly ageing population leads the social system and market to be changed • Trends in Japan – emerging health claims for healthy ageing in Japan • The search for effectiveness – undertaking research for competitive product development • Towards the market – strategies involving younger consumers to bring in healthier older age

17. FANCL FANCL Corporation founded in 1981 as a cosmetic company followed by launch a health food and nutrition supplements business.

18. FANCL Bosia is a FANCL group cosmetic company in USA featured with botanical extract. Now it is expanding business field world wide.

19. FANCL FANCL’s nutrition supplements featured with Technologies ✓efficacy and distinctiveness • Intensive survey on latest information and academic reports to choose active ingredients. • Formulation based on mechanism of target symptom, not just choose popular or general material known good to treat with. • Develop unique active material whose activity was found by our research but not commercially available under collaboration with material company . case of NYOUSAN support decrease purine absorption food chitosan purin inhibit Uric acid synthesis Uric acid Uric acid storage promote uric acid excretion “NYOUSAN support” ( blood uric acid care) Rattan tea (Ampelopsisgrossedentata) ampelopsin

20. FANCL FANCL’s nutrition supplements featured with Technologies ✓optimised preparation • Maximize activity of components (e.g.; bioavailability, slower release for water-soluble compounds, protection from gastric juice). • Smaller tablet/capsule for easier swallow. dry wet Bifidobacterium protected with oil. Neutralizer toward gastric juice. Acid resistant capsule. Bifidobacteriumlongum Bifidobacterium is obligate anaerobe; even a slight amount of water can easily spoil their activity. Hard capsule containing bifidobacterium other company’s product FANCL’s product After 2 hours soaking in artificial gastric juice.

21. FANCL FANCL’s nutrition supplements featured with Science ✓efficacy and distinctiveness • Development of innovative non-invasive diagnosis kit . • Establish screening method followed by evaluation of active substances through the system. • Human trials carried out to evaluate the potential of active material or product efficacy. Pursue effectiveness ; not just rely on research repots but test the activity by ourselves. This is how effective and competitive product can be developed.

22. The search for effectiveness The case of “ENKIN” “ENKIN” is the first accepted product as “Foods with Function Claims” for eye care. ✓Active material selected to solve problems originated from eye overuse ; i.e., accommodation, contrast impairment and stiff neck and shoulder. ✓ Lutein, astaxanthin, cyanidin-3-glucose, and DHA are active compounds to solve sole problems. Near point accommodation is accommodation (sight adjustment) to the nearest point within clear sight. Focal distance become longer as aging. focal distance Not in focus Not in focus In focus In focus Person (subject)

23. The search for effectiveness The case of “ENKIN” Clinical trials to prove efficacy of the product. ✓ Methods: A randomized double-blind placebo-controlled parallel group comparison study was conducted for 48 participants aged 45 to 64 years who complained of eye strain. Near-point accommodation (NPA) and subjective symptoms were evaluated both before and after four weeks intake of ENKIN. ✓ Results: contrast improve and ameliorate heavy shoulder. ImmunolEndocrMetab Agents Med Chem. 2014 14:114-125 Easy to feel stiff neck and shoulders ? * supplement placebo unpaired t-test * : p <0.05 Mann–Whitney U test * : p <0.05 before 4weeks Stiff neck and shoulders Changes of near point accommodation

24. The search for effectiveness The case of “FERULIC ACID” “FELUIC ACID” is product focused on cognitive function. ✓Active material selected based on ideas to protect brain nerve cell, improve neurotransmission, improve blood flow, as well as “good materials for brain”. ✓ Active ingredients are; ferulic acid, α-GPC (alpha-Glycerylphosphorylcholine), Ginkgo biloba extract, and vitamin C. Cognitive function MCI (mild cognitive impairment) dementia ordinary reversible irreversible

25. The search for effectiveness The case of “FERULIC ACID” Clinical trials to prove efficacy of the product. ✓Methods : Subjects are 65 years and older with MCI　（n=68). Healthy parson other than cognitive function; not dementia（CDR≦0.5）and score of MMSE22～26 or ADAS-jcog (Alzheimer's Disease Assessment Scale-cognitive component-Japanese version）total 5～15point. MMSE score was compared after 6 months intake of “FERULIC ACID” . ✓Results: MMSE total score change of supplement group showed trend for improvement against placebo group. ＃MMSE : The Mini-Mental State Examination (MMSE) or Folstein test is a 30-point questionnaire that is used extensively in clinical and research settings to measure cognitive impairment. It is commonly used in medicine and allied health to screen for dementia. Jap SocDemmentia Prev. 2018 8(1), 1:2-13 ⊿MMSE total score Changes in MMSE score before 3 months 6 months ●：Active，○：Placebo．Mean±S.E., P-value ：student t-test（vs placebo）

26. Agenda • What it takes – how the rapidly ageing population leads the social system and market to be changed • Trends in Japan – emerging health claims for healthy ageing in Japan • The search for effectiveness – undertaking research for competitive product development • Towards the market – strategies involving younger consumers to bring in healthier older age

27. Towards the market Younger people as a prior generation to aged people ✓ Healthy younger life lead healthy aged life. ✓lifestyle-related disease affects health and quality of life in elderly generation. - obese often bring problems to joint health and variations of disorders. - metabolic syndrome; abdominal obese with high blood TG or glucose / dyslipidemia / hypertension is one of the major cause of cardiovascular abnormalities as well as kidney dysfunction. Therefore, care for healthy life in younger age is important to bring them in healthier aged life.

28. Towards the market ✓ FANCL provide solutions for lifestyle-related diseases ; “Foods with Function Claims” . Prior care to elderly generation will support to lead healthier aged life. “CHUUSEISIBOU support” ( blood triglyceride care) “KETTOU support” ( blood glucose care) “KETSUATSU support” ( blood pressure care) “NYOUSAN support” ( blood uric acid care)

29. Towards the market ✓ FANCL provide solutions for abdominal obesity ; “Foods with Function Claims” Prior care to elderly generation will support to lead healthier aged life. “NAISHI support” ( weight and body fat care) Biffidobacterium as functional substance to reduce weight, total body fat, BMI through improvement of intestine flora.

30. Towards the market ✓ FANCL provide solutions to wide range of generations for basic care whose components are customised to each generation; “one-pack total nutrition supplement optimized to each generation” Prior care to elderly generation will support to lead healthier aged life. One sachet is packed for single use. Contained capsule/tablet in sachet are selected based on each generation’s needs . Product variation for 20s, 30s, 40s, 50s, and 60s of women or men. 30 sachets inside “NENDAIBETSU supplement” Assorted supplement for daily nutrition and functional compound supply optimised for each generation.

31. Conclusion • Japan is sometimes lauded as the most rapidly aging country. An increasing ageing population is a driving force for Japan to change its social system - excess medical expenses and deficient working power drove the government to make new systems which led to create a new market. • Research pursuing efficacy and distinctiveness can lead competitive product development to open up opportunities to win this growing market. • To bring younger consumers in healthier older age, care for lifestyle-rerated diseases and basic nutritional need optimised for each generation is important.

32. Thank you very much for your attention! https://www.fancl.jp/en/index.html