Food&BeverageInformationProject2011 DepthSectorStream Nutraceuticals&FoodsForHealth

FinalReport
October2011;v1.9

www.foodandbeverage.govt.nz

ThisinformationwaspreparedbyCoriolissolelyfortheuseofourclient;itisnottobereliedonbyanythirdpartywithout priorwrittenconsent.

Coriolis is a strategic management consulting and market research firm

We work with organisations to help them grow. For corporations, that often means developing strategies for revenue growth. For governments, it means working on national economic development. For nonprofits, it means helping to grow their social impact. We address all the problems that are involved in growth: strategy, marketing, pricing, innovation, new product development, new markets, organisation, leadership, economic competitiveness. We bring to our clients specialised industry and functional expertise. We invest significant resources in building knowledge. We see it as our mission to bring this knowledge to our clients and we publish much of it for the benefit of others. A hallmark of our work is rigorous, factbased analysis, grounded in proven methodologies. We rely on data because it provides clarity and aligns people. However, we deliver results, not reports. To that end, we work side by side with our clients to create and implement practical solutions. The Coriolis name The coriolis force, named for French physicist Gaspard Coriolis (17921843), may be seen on a large scale in the movement of winds and ocean currents on the rotating earth. It dominates weather patterns, producing the counterclockwise flow observed around lowpressure zones in the Northern Hemisphere and the clockwise flow around such zones in the Southern Hemisphere. To us it means understanding the big picture before you get into the details. PO Box 90509, Victoria Street West, Auckland 1142, New Zealand Tel: +64 9 623 1848 www.coriolisresearch.com

Theobjectiveofthisreportisto provideafactual sourceofhigh qualityinformation onthecurrentsituationintheNewZealand nutraceuticals&foodforhealth/functionalfoodssectorfor fouraudiences: Investors (domesticorinternational) Industry participants(firms &individuals) Government (acrossallrolesandresponsibilities) Scientificresearchers(academic,government&firm)

Itcreatesacommonsetoffacts andfigures onthecurrent situationintheindustry. Itdrawsconclusionsonpotentialindustrystrategic directions andhighlightsopportunities forfurtherinvestment. ItformsapartofthewiderFood&BeverageInformationProject andwillbeupdatedannually. Theopinionsexpressedinthisreportrepresentthoseofthe industryparticipantsinterviewedandtheauthors.Thesedonot necessarilyrepresentthoseofCoriolisLimitedortheNew ZealandGovernment.
Note:Sectorsanalysedinmoredepthonarotatingschedule,in2011this includedSeafoodandNutraceuticals

TABLEOFCONTENTS
Section Contents Glossaryofterms Methodology&datasources F&BIPOverview Definitions Summary&conclusions Nutraceuticals a. Global Situation 20 27 38 Page 4 5 6 7 10 15

b.NewZealandSituation c.Observations FunctionalFoods/FoodsforHealth a. Global Situation

64 71 75

b.NewZealandSituation Appendices

TABLEOFCONTENTS
Appendices Appendix1 ProfilesofNaturalproductscompanies Appendix2 Product Profiles Appendix3 Nutraceuticalsfrommilk Appendix4 Sourcesoffirms Appendix5 Exclusions Page 76 96 103 111 121

GLOSSARYOFTERMS Thisreportusesthefollowingacronymsandabbreviations

A$/AUD ABS ANZSIC AU Australasia EAsia EBITDA C/S America CRI CY CAGR FY /GBP IP JV m n/a NA/ME/CA N.H

Australiandollar Absolutechange AU/NZStandard IndustryClassification Australia AustraliaandNewZealand EastAsia Earningsbeforeinterest, tax,depreciationand amortization Central&SouthAmerica(LatinAmerica) CrownResearchInstitute Calendaryear(ending Dec21) CompoundAnnualGrowthRate Financial year(offirminquestion) British pounds Intellectual Property Jointventure Million Notavailable/notapplicable NorthAfrica/MiddleEast/CentralAsia NorthernHemisphere

NZ NZ$/NZD Oceania R&D T/O SAsia SEAsia US/USA US$/USD UK YE YTD

NewZealand NewZealanddollar Australia,NewZealand&PacificIslands ResearchandDevelopment Turnover SouthAsia(IndianSubcontinent) SouthEastAsia United StatesofAmerica United Statesdollar United Kingdom Yearending Yeartodate

Sources AR Ce Ci K Ke ws Annualreport Coriolisestimate Coriolisinterview Kompass Kompassestimate Website

PAGE6

METHODOLOGY&DATASOURCES Thisprojecthasanumberofspecificdatarelatedlimitations,relatingtotheindustrybeingintheearlystagesof thedevelopmentcurve

Thisreportusesarangeofinformationsources,bothqualitative andquantitative. Thereisnostandardisedproductorindustrydefinitionwidelyor universallyacceptedinNewZealand. Thenumbersinthisreportcomefrommultiplesources.Whilewe believethedataisdirectionallycorrect,werecognisethe limitationsinwhatinformationisavailable. Manydatasourcesincorporateestimatesofindustry experts. ThereisnosourceofthetotalturnoveroftheNewZealand nutraceuticalsorfunctionalfoodsindustry. Clientoranyofthedatasourcesusedintheproject. Theinformationcontainedinthereportandany commentaryhasbeencompiledfrominformationand materialsuppliedbythirdpartysourcesandpublicly availableinformationwhichmay(inpart)beinaccurateor incomplete. Coriolismakesnorepresentation,warrantyorguarantee, whetherexpressorimplied,astothequality,accuracy, reliability,currencyorcompletenessoftheinformation providedinthereport.

TheAustralianandNewZealandStandardIndustryClassification system(ANZSIC)ortheGlobalHarmonisedCommodity DescriptionandCodingSystem(HScodes)trade/tariffcodesdo NOThaveanyclassificationsthatinanywaycatchfirmsinvolved innutraceuticalsorfunctionalfoods. StatisticsNewZealandcollectsverylimitedinformationon nutraceuticalsorfunctionalfoods(foodsforhealth) Foranexampleofwhatgovernmentcollecteddataonthe sectorlookslikesee: http://www.statcan.gc.ca/pub/88f0006x/88f0006x200900 1eng.pdf Inaddition,insomeplaces,wehavemadeourownclearlynoted estimates. Coriolishasnotbeenaskedtoindependentlyverifyorauditthe informationormaterialprovidedtoitbyoronbehalfofthe

AlltradedataanalysedinallsectionsoftheF&BInformation projectarecalculatedanddisplayedinUS$.Thisisdonefora rangeofreasons: 1. Itisthecurrencymostusedininternationaltrade 2. Itallowsforcrosscountrycomparisons(e.g.vs.Denmark) 3. ItremovestheimpactofNZDexchangeratevariability 4. ItismorecomprehensibletononNZaudiences(e.g.foreign investors) 5. ItisthecurrencyinwhichtheUnitedNationscollectsand tabulatesglobaltradedata Ifyouhaveanyquestionsaboutthemethodology,sourcesor accuracyofanypartofthisreport,pleasecontactTimMorris,the reportsleadauthoratCoriolis,on+6496231848

PAGE7

F&BINFORMATIONPROJECT TheNewZealandFood&BeverageInformationProjectisdesignedtobethefoundationoffactsandfigureson whicharangeofaudiencescanbuild

StructureoftheNewZealandFood&BeverageInformationProject
(2011)

Investors

Firms

Government

Overview

InvestorsGuide

IndustrySnapshot

Sectors

Dairy Sector

Meat Sector

Seafood Sector

Produce Sector

Processed Foods Sector

Beverages Sector

Nutraceuticals Sector

Markets

GlobalMarkets

HighPotentialMarketProfiles

PAGE8

Note:Everyyeartwosubsectorsarecompletedinmoredetail.SeafoodandNutraceuticalsin2011

NUTRACEUTICALSSECTORANALYSIS ThisanalysisoftheNewZealandnutraceuticalssectorformsapartofthewiderFood&BeverageInformation Project

StructureoftheNewZealandFood&BeverageInformationProject
(2011)

Investors

Firms

Government

Overview

InvestorsGuide

IndustrySnapshot

Sectors

Dairy Sector

Meat Sector

Seafood Sector

Produce Sector

Processed Foods Sector

Beverages Sector

Nutraceuticals Sector

Markets

GlobalMarkets

HighPotentialMarketProfiles

PAGE9

TABLEOFCONTENTS
Section Contents Glossaryofterms Methodology&datasources F&BIPOverview Definitions Summary&conclusions Nutraceuticals a. Global Situation 20 27 38 Page 4 5 6 7 10 15

b.NewZealandSituation c.Observations FunctionalFoods/FoodsforHealth a. Global Situation

64 71 75

b.NewZealandSituation Appendices

ADIFFICULTAREATOSTUDY Nutraceuticalsandfunctionalfoods(foodsforhealth)areadifficultareatodefineglobally;dataavailabilityis poor

Quantifyingthevalueofthefunctionalfoodmarketisadifficulttask.ColetteShortt,OpportunitiesforHealthEnhancingFunctionalDairyProducts,2004 Atpresentthereisnouniversallyaccepteddefinitionfornutraceuticalsandfunctionalfoods.HandbookofNutraceuticalsandFunctionalFoods,2nd Ed.,
2004

Thereisnouniversalconsensusinthedefinitionofthetermsfunctionalfoodornaturalhealthproducts,althoughtheyarecommonlyused aroundtheworld.StatisticsCanada,2007 Fromamarketperspective,functionalfoodsaredifficulttoquantifybecausedifferentdefinitionsareused.J.A.Weststrate,Functionalfoods,trends

andfuture,BritishJournalofNutrition2002

Allnaturalproductsareasaretrickytodefine,theyhavesuchahugescope,andlotsofsmallplayers.CEO,NZCompany

PAGE11

WHATARETHEY? Weareusingthefollowingdefinitionsasthebasisforoursectoranalysis
Definitionsusedinourresearch
(2010) Therearealotofproposeddefinitions,manyconflicting orvague;wehaveeffectivelyadoptedthedefinitionused byHealthCanadaasthisistheonlyofficialgovernment definitionavailable3

RFPTerm Nutraceuticals

Coriolisdefinition simple Naturalproductextracts soldindosageform (capsules,tablets,powders, etc.)

Widelyacceptedindustry term(s) Supplements Nutritionalsupplements Naturalhealthproducts

Coriolisdefinition moredetailed Productthatispreparedfromfoodsandother natural products,butisisolatedandsoldintheform ofcapsules,tablets,orpowders,orinotherdosage formsnotnormallyassociatedwithfoods. Anutraceuticalisdemonstratedtohavea physiologicalbenefitorprovideprotectionagainstills orassistwithgeneralhealthandwellbeing. Foodsfortifiedwithaddedorconcentrated ingredientstofunctionallevels,whichimprovehealth orperformance. Foodsthat,byvirtueofthepresence of physiologicallyactivecomponents,provideahealth benefitbeyondbasicnutrition. Addednutraceuticalareoutsidestandardrecipeor formulation.

Comments/Notes Weincludewithinthis definitionallessential nutrients(vitamins,minerals, Linolenic acid1,etc.)and othernonessentialnutritional supplements Weexcludeindustrial proteins2 Weexcludenonhealthrelated functionalfoodswherever possible(forexampleRedBull andVenergydrinks)

FunctionalFoods (akaFoodsfor Health)

Foodswithadded nutraceuticals

Functionalfoods

PAGE12

1.Theshortestchainomega3fattyacid;2.Forexampleribonuclease A,casein,wheyandalbuminoids;3.Wehadseriousreservationsaboutmostdefinitionsproposedby internationalindustrylobbygroupsand/orindustryproponentsduetotheirvaguewordingleadingtoadditionalconfusion

MODEL Nutraceuticalsexistattheintersectionoffoodandmedicine
Proposedmodelofnutraceuticalsandrelatedclassesofhealthrelatedproducts
(model;2010)

Modern medicine

Nutritious foods Foodswith stronghealth relatedlinks Functional foods

Nutraceuticals Essential nutrients

Indigenous medical traditions

PAGE13

Source:Coriolis

EXAMPLES Examplesofallthesetypesofproductcaneasilybeidentified
Definitionsandexamplesofterminologyusedinmodel
(2010) Category Nutritiousfoods Definition Conventional foodfromnaturalsources containingessentialnutritionalelements Conventionalfoodsstronglyassociatedwith specifichealthclaims Conventionalfoodstowhichhighconcentration nutraceuticalshavebeenaddedtogivehealth benefits Plantandanimalextractswithhistorical traditionofbeingusedforhealth Nutrientrequiredfornormalbodyfunctioning thatcannotbesynthesisedbythebody(atallor inadequatequantities) Isolatedcompoundspresentedinsemior pseudomedicalform Foodorfoodderivativesthathavebeenthrough somelevelofclinicaltrials Patentedchemicalsubstanceintendedforusein medicaltreatmentwhichhavebeenthrough stagesIIIIclinicaltrialsandaregovernment approvedforuse General examples Foodswithstronghealth related links Apples aspartofahealthydiet(An appleadaykeepsthedoctoraway) OrangesandvitaminC OceanSpraycranberryjuiceand urinarytract infections KelloggsAllBranandfibre Yakultprobiotic drinkingyoghurt ResVes WineTime chocolatebarwith Resveratrol WalMartSpringValleyorganic flaxseed oil GNCAlphaLipoic Acid(toaidwith weight loss) BayerOneADay complete womensmultivitamin SchiffGlocosamine Plus Natures BountyGingkoBoloba NovartisFibersource HNtodispense viaanIVdrip PfizerLipitortreatment forhigh cholesterol(US$12bsalesin2007) NewZealandexamples New Zealandgrassfedbeef

Calciuminmilk

Functionalfoods(Foods forHealth) Traditionalbotanicaland animalextracts Nutra ceuticals Essential nutrients

AnchorSymbio yoghurtcontaining ProDigestis,AcidophilusandCasei bacteria Silberhorn SirBobCharlesSportsVel 100(deer velvetextract) NaturesOwnOmega3

Nutritional supplements MediFoods Pharmaceuticals

Vitacos Biolane advancedjoint health(containingmusselextract) Comvita MediHoney forwound treatment Amsacrine (onlyidentifiedsuccessful pharmaceuticaldrugdevelopedinNZ)

PAGE14

Source:Coriolis

TABLEOFCONTENTS
Section Contents Glossaryofterms Methodology&datasources F&BIPOverview Definitions Summary&conclusions Nutraceuticals a. Global Situation 20 27 38 Page 4 5 6 7 10 15

b.NewZealandSituation c.Observations FunctionalFoods/FoodsforHealth a. Global Situation

64 71 75

b.NewZealandSituation Appendices

NUTRACEUTICALS SITUATION Nutraceuticals,whilestillfragmentedglobally,isconsolidatingasthesectormatures

NewZealand TheNewZealandindustryisrelativelyyoungandfilledwithmany passionateindividuals;mostfirmsaresmall;themedianfirmin NZwouldhave23employees Industryregulationisincreasingasthesectormatures NewZealandproducesahandfulofnutraceuticalsatanyscale: Manukahoney derivedfromthenativemanuka tree; honeysourcedfromthehighfactortreesisvaluedforits antibacterialproperties Greenlippedmusselsassistwithjointmobility Deervelvetusedprimarilyformaleimpotence Arangeofdairyderivativesanddairyrelatedbacteria Competitors Productionofkeyingredients(e.g.vitaminC)typicallyoccursin largescalefactories(e.g.China,Germany)andaretradedglobally Globallythenutraceuticalssectorishighlyfragmented Vitamins&supplementsconsolidatingatapace;large playersemerging,oftenaroundmajorpharmaceutical companies Stillalargegroupofmidsizedfirms,typicallynarrowfocus Largenumberofsmall,singleproductfirmsellingsnake oil

Thereisintensecompetitioninthemarket;newbrands, products,compounds,anditemsareconstantlyevolving

Highsectorinnovationwithnewproductsconstantlyemerging; manyproductsarefadsandmanyhaveanaturallifecycle;while Manukaisstillonrise,deervelvethasclearlypeaked TheNewZealandsectorhasproducedanumberofmidtolarge firms Vitaco ($168m;PrivateEquity[NextCapitalAU]) Comvita($85m;NZXlisted) NewImage(82m;NZXlisted) AlphaLaboratories($85m;private)

Consumers/Markets NutraceuticalsaretypicallyconsumedinWesterncountriesby wealthy/citydwellers&agingbabyboomerstryingtorepairthe damageofmodernliving Nutrcaceuticals consumedinAsiancountriesiscultural Consumeroftenlookingformoreproactivehealthsolutionsas medicalcostsrise Consumersoftenpurchasesporadicallyandhaveinconsistent consumption(e.g.acupboardfullofhalffinishedjarsofpills) Twokeychannels:(1)retailsupermarketswhichwanttwokey brandsandprivatelabeland(2)pharmacies/supplements specialistswhichwantawiderrangeofnonsupermarketbrands

ThesectorhasbeenafocusofGovernmentsciencefundingover thepastdecade,butresultsforthisresearch,limitedtodate
Source:Interviews;Coriolis

PAGE16

NUTRACEUTICALS SWOT ANALYSIS NewZealandneedstocontinuemovingforwardandadapting;successisnotguaranteed

Strengths UniquefloraandfaunaduetoNewZealands geographicisolation Unique productsprovensuccess(e.g.Manukahoney) NewZealandtrustedcountryandproductswithsecurefoodsource AbletoleveragefavourableopinionofNewZealandinkeymarkets(e.g.China, Korea,Japan) CheapertomanufacturethaninAustralia Weaknesses Highcostofrobustscientificvalidationofclaims(e.g.clinicaltrials) Ficklemarketoftenfadproductswithinconsistentconsumption Narrowconsumermarket Regulatoryenvironmentinexportmarketschallengingtounderstandandfrequently changing;noglobalstandardsoragreements MostNZfirmshavelow/noeconomiesofscale Lackofcapitalforresearchandcapitalinvestment

Opportunities Largewastestreamsfromexistingfoodandbeveragemanufacturing Expansionintohighdemandnutraceuticalsmarkets(e.g.EastAsia) Native,uniqueplants Researchintokeyhighpotentialproductswithproventrackrecord(e.g.manuka honey,blackcurrants) MarketingNewZealandsuniqueenvironmentandproducts MarketingtotouristsinNewZealand Onlineshopping CountryofOriginlabellingsupportingNewZealandproducts Specialdietaryrequirements(e.g.foruseinretirementhomes,hospitalsetc.)
Source:Interviews;Coriolis

Issues/Threats/Risk CounterfeitingofNewZealandproducts,particularlyinChina Falseclaimsbringdisreputeontheindustry Increasingamountofregulatoryrestrictions Backlash,negativepublicityinsectorwithproductswithunprovenclaims CompaniesrepackingimportedingredientsasproducedinNewZealand Scares/contaminations/diseasedamagingconsumerimageofNewZealand

PAGE17

NUTRACEUTICALS POTENTIALSTRATEGICDIRECTIONS Fivepotentialstrategicdirectionsareidentifiedforthenutraceuticalsector

Situationcreatingopportunity Largenumberofnewnutraceuticals beingdevelopedbyscientists Entrepreneursdevelopingnew nutraceuticals Existingglobalnutraceuticalsbeing launchedinNewZealand(e.g.Noni) Handfulofkeyproductsaccountfor mostofindustryexportgrowth Highlycrowdedworldmarket Most nutraceuticalsonlydeliveredin singleformtoconsumer(e.g.pill) Consumershaveawiderangeof consumptionanduseoccasions Industrystillhighlyfragmented with largenumberofsmallplayers FewNZbrandshaveanyinmarket awarenessorpresence Coststructuresandoverheadsperunit arehigh Resultingpotentialstrategic direction 1.Focusonprovenwinners(e.g. manuka)insteadofspreadingefforts widely Opportunity Buildonandamplifysuccessof existingwinners Amplifyconsumercutthrough withwinningmessage Challenges Missing outonhighpotentialnew nutraceuticals

2.Line extensionstoleverage functionalpropertiesintonewforms

3.Industryconsolidation todrive scale 4.Morecollaborativemarketing

Buildstrongconsumerperception ofhealthbenefitsofproduct(e.g. cranberries)throughwider exposure Sellmorevolumetoconsumers Rollup strategybylargerfirms andemergingleaders Driveeconomiesofscalearound productionandmarketing Firmsworktogethertojointly marketNZassuppliers Similar towineindustry

Succeedinginnewchannels Comingupwithideas Inmarket execution

Lowbarrierstoentry(currently)

Egosandpersonalities Cooperating andcompetingatthe sametime

PAGE18

Source:Interviews;Coriolis

NUTRACEUTICALS POTENTIALAREASFORINVESTMENT Investorsshouldfocusonprovenproductsachievingtractioninexportmarkets;opportunitiesbeyondthere morespeculativeandonlyforthosewithstrongtransferrablecapabilities;opportunitiesexistforindustryrollup

Widerangeofopportunitiesforinvestorswithleverageable or transferableskills Marketing/marketaccess Distribution/infrastructure Fragmentationsuggestssignificantopportunityforconsolidation and/orindustryrollup,drivenbyeconomiesofscale Widerangeofacquisitiontargets Mostcompaniesforsaleattherightprice economicreasons Theseuniqueplantsandanimalscreateopportunitiesand successtodatecomesfromahandfulofthese

Manukahoney Manukahoneyisachievingcutthroughandstrongconsumer acceptance;consumersgettheconcept ProductishighlydefensibleasitisonlyinNewZealand(&AU) Productionfragmentedacrossawiderangeofgeographically dispersebeekeepers;low/noopportunitieshere InproductionComvitaislargestfirm;another4firmsatanyscale Greenlippedmusselextract Wastestreamofproductionofgreenlippedmussels ProductisdefensibleasitisonlyinNewZealand;however,wide rangeofcompetingproductsinjointmobilityspace Dairyrelated Widerangeofdairyderivedorrelatednutraceuticalsbeing developedorpromotedinNewZealand Consumersuccesstodateprimarilycolostrum;leaderisNew ImagesellingviadirectmarketinginAsia Otherdairy(bioactivemilkcomponentsandprobiotics) controlledbyfarmerownedcooperatives Beyondthesethreeprovensuccessinthemarket,opportunities aremorespeculative

Wastestreams&byproducts Clearestopportunityisinaddingvaluetowastestreams emergingfromexistinglargefoodproductionindustries Seafood Meat Dairy Fruit(kiwifruit,apples) Largeamountofwastegiveeconomiesofscaleinrefiningand processing NZUnique NewZealandhasawiderangeofplantsandanimalsfound nowhereelseonearthduetoNewZealandsisolatedlocation Hugerangeofuniquenativeplants Widerangeofseaorganisms Extractionfromnativelandanimalslikelyrejectedfornon
PAGE19 Source:Interviews;Coriolis

TABLEOFCONTENTS
Section Contents Glossaryofterms Methodology&datasources F&BIPOverview Definitions Summary&conclusions Nutraceuticals a. Global Situation 20 27 38 Page 4 5 6 7 10 15

b.NewZealandSituation c.Observations FunctionalFoods/FoodsforHealth a. Global Situation

64 71 75

b.NewZealandSituation Appendices

TOP200NUTRACEUTICALSBYTYPE AnalysisoftheTop200nutraceuticalsindicatedtwothirdsoftherangeofnutraceuticalsarebotanical medicines,followedbynonherbalother

ClassificationoftheTop200nutraceuticalsbytype
(#;2001)

Anutraceuticalsencyclopaedia offeredalistofthetop200 nutraceuticalsbytype;thislist shouldnotbeseenas anything otherthandirectional

Vitamins 7% Minerals 7% Forexample Benecol Choline CoenzymeQ10 Spirulina

Forexample AloeVera Borage Ginseng St.JohnsWort Botanical medicines 64%

NonHerbals 22%

PAGE21

Source:Nutraceuticals:TheCompleteEncyclopaedia(PenguinPutnam2001);Coriolisanalysis

USA SUPPLEMENTSINDUSTRY TheUSAhasgrownitsnutritionalsupplementsindustrytooverUS$28b

USASupplementsindustrysales
(US$m;2010)

USASupplementsindustrysalesgrowthbycategoryinspecialist supplementstores
(US$m;2009vs.2010) Highgrowthsegments Digestiveaidsandenzymes 16%
Prebioticsand probiotics

Minerals $2.25 8% Meal replacements $2.81 10% Vitamins $9.55 34% Sportsnutrition $3.09 11%

Mealreplacements

14%

RTDand powdered

Vitaminsandminerals

11%

VitaminsA,D&K

Foodsupplements

9%

AminoAcids

5%

Herbsand Botanicals $5.06 18%

Specialty $5.34 19%

Miscellsupplements

1%

DietFormulations

7%

Total=US$28.1b

Sportsnutrition 14%

PAGE22

Source:NutritionBusinessJournal;NaturalScantrack publishedinNaturalfoods merchandiser;Coriolisanalysis

NEWPRODUCTS Newproductsareconstantlyemerging;sectorgrowthcombinedwithconsumereagernessfornoveltyhasledto amorecrowdedfield

Examplesofselectnewnaturalproductderivativeslaunched(orheavilypromoted/marketed)inthelastfiveyears
(20062011) Newproducts Chiaseeds Krilloil Pomegranateoil Hawaiiancoffeecherry Bilberry Lingonberry Tamarind extract Goji berryextract Pumpkinseedoil Cactusfruitextract Brownseaweedextract Broccoliextract Euphoriafruit(Longan) Cili fruit Yumberry Seabuckthorn Dragonfruit Kombucha tea Healthclaims Omega3andproteinrich Omega3 General health,skincare Antioxidant Eyesight,heartdisease Antibacterial,UTItreatment Antibacterial,digestivehealth Antioxidant,immuneregulation Omega3,prostratehealth Diabetes,hangover,digestion Weightloss,skincare,cancer Cancer,immuneenhancement Antioxidant,hairloss Antioxidant,heartdisease Antioxidant,eyesight,circulation Skincare,woundhealing Diabetes,generalhealth Cancerrecovery,liverdetox Newproducts Mulberry Agave Sugarbeet fibre Sugarcanefibre Longpepperextract Grapefruitseedextract Amla (Indiangooseberry) Aronia (chokeberries) Camu camu Maca Nonijuice Menhadenfishoil Redyeastrice(fermented) Burdockroot Barleygrass Acai Mangosteen Healthclaims Antioxidant,bloodpressure Sugarsubstitute,prebiotic Digestiveaid,diabetes Digestiveaid Nutrientabsorption Antibacterial, detoxification Antibacterial,diabetes,immune Antioxidant,cancer,immune Antioxidant,moodenhancer Menopause,virility,energy Antioxidant,cancer Omega3 Hearthealth Skinconditions,liverdetox,cancer Inflammation,cancer,aging,heart Antioxidant,diabetes Antiinflammatory,hearthealth

PAGE23

Source:variouspublishedarticles;NutraceuticalsWorldmagazine;Coriolisanalysis

NEWZEALANDPOSITION Inthishighlycompetitive,fashionforwardenvironment,NewZealandscurrentnutraceuticalportfolioisstarting toshowitsage

ProfileofkeyNewZealandnutraceuticals
(#;2011) Key NewZealand nutraceuticals Deervelvet Probiotic Lactoferrin Year bioactivity firstidentified ? ~1935 1939/1961 Where bioactivityfirst identified China Japan USA Currentmarketsituation

WhatshotaccordingtoNutraceuticalsWorld
(1998vs.2010) HotHerbs 1998 Echinacea St.John'sWort Kavakava Ginkgobiloba Ginseng Garlic Sawpalmetto HotHerbs 2010 Acerola Maca Maqui Americanginseng Camu camu Noni Pomegranate Kombucha New &trendy Superfruit

In decline StrugglingagainstViagra Mature Widespreaduseasingredient Mature;slowinggrowth;falling prices Allmajorglobaldairycoopsnow produce Growth slowing Mature

Colostrum Green Lipped musselextract ManukaHoney Totarol

70s80s 1980(?)

Various Australia

Asian Traditionalherbal remedies

1988 1992

NewZealand UnitedStates

Growthslowingbutstill strong Supplyconstrained Firstidentified 1937inNZ Stable Noclearconsumercutthrough Wide rangeofcompetingsources Mature todecline(?) Noclearconsumercutthrough

Kiwifruitextract

2001(?)

UnitedKingdom

PAGE24

Source:Nutraceuticals:TheCompleteEncyclopaedia(PenguinPutnam2001);Coriolisanalysis

INDUSTRYBIFURCATION Thetraditionalnutraceuticalsindustryappearstobebifurcating(splitting)intofashionnutraceuticalsandscience basedones

Proposedmodelofchangingnatureofnutraceuticals
(model;2010)

Fadorfashion nutraceuticals Appears ontheradarthroughmarketing effortsofcommittedindividual(s) Addedtoindulgentfoodasnewhealth promotingorguiltremovingflavour Traditionalnutraceuticals Emergesfrommainstreamtraditional sources Producttakenas asupplement Product madefromsimpleextractwith vaguehealthbenefits Healthbenefitsunclear,unproven;no scientific evidence Product madefromsimpleextractwith vaguehealthbenefits Healthbenefitsunclear,unproven;no scientific evidence Forexample Nonijuice Kombucha tea

Sciencebasednutraceuticals Emergesfromscientific researchprogram Productadministeredinmosteffectiveform Single compoundisolatedwithspecific claims Compoundcompletes clinicaltrialsandis fullymedicallycertified,usedinhospitals

Forexample Sleepenhancing peptidesderived frommilkusing DNAtestedcows

Forexample Deervelvet Ginseng Livercleansing

PAGE25

Source:Coriolis

FADORLONGTERM? Therearestrongindicatorsastowhetheranewnutraceuticalisalikelytobeafadoralongtermsuccess
Requirementsforsuccessinnutraceuticalstoday
(model) Indicator Details Example

Indicatorsforfadorfashionproduct(boom andbustcycle) Traditionalwisdom Scenicsource Unsubstantiated claims Productderived fromindigenoustraditionsinfarawayland Sourceofproductissourcedfromhighlyscenic,romanticor mysterioussource Unsubstantiated claimsproductiscureformajor heretoforeincurableconditions New productmakeswiderangeofhealthclaims Aa berriesconsumed bytraditionalpeoplesof Brazilforcenturies Hawaiian coffeecherry(aka.unroastedcoffee) Siberianpineapple(akaseabuckthorn) Promotionalmaterialclaiming thatTahitianNonijuicecouldtreat, cureorpreventnumerousdiseases,includingdiabetes,clinical depression,haemorrhoidsandarthritis Gac fruitpromoteenergy,enhancetheimmuneandliverfunctions andcanbeusedtotreatskindiseases

Multiple claims

Indicatorsoflongterm success(notafad) Immediateeffect Alignedwithpreexisting concepts Actual functionality Growingscientific support Productprovidesimmediately orrapidly noticeableeffect to consumer Newusagealignedwithhistoricconsumerbeliefsystemor productassociation Productdeliversonpromisedhealth benefits Growingbodyofscientificevidencereinforcingclaims Clinicaltrials Caffeineinenergydrinks Activa Fruitandhealth Yoghurtandhealth Cranberriesandurinarytracthealthinwomen Manukahoneyandwoundhealing

PAGE26

Source:Coriolis

TABLEOFCONTENTS
Section Contents Glossaryofterms Methodology&datasources F&BIPOverview Definitions Summary&conclusions Nutraceuticals a. Global Situation 20 27 38 Page 4 5 6 7 10 15

b.NewZealandSituation c.Observations FunctionalFoods/FoodsforHealth a. Global Situation

64 71 75

b.NewZealandSituation Appendices

NUTRACEUTICALS SUPPLYCHAIN Thenutraceuticalssupplychainisrelativelysimpleforanyoneproduct

SimplifiedmodelofNewZealandnutraceuticalssupplychain
(model;ANZSICcodesasavailable)) Domestic market

Waste/byproducts ofexisting industries NewZealand nativeflora& fauna Imported ingredients Contractpacker

Supplements marketer/ manufacturer

Supplements wholesaler

Pharmacies& drugstores

Distributor wholesaler

Healthproducts retailers

Ingredients processor/ manufacturer

Supermarkets/ otherretailers

Seafreight Airfreight

Supplements wholesale1 (inmarket) Supplements marketer/ manufacturer

Pharmacies& drugstores

Food&beverage manufacturer

Intonon nutraceuticals supplychains

Healthproducts retailers

Supermarkets/ otherretailers

International markets
PAGE28 1.Theremaybeoneormorelayersofwholesaling,dependingonproductormarket;somewholesalefunctionsmaycaptiveinsideretailers;Source:Coriolis

Food&beverage manufacturer

NZPORTFOLIO NewZealandhasalimitedportfolioofmajornutraceuticals1;mostarebyproducts,oftenextractedfromwaste streams;whileclearlydefensible,fewnutraceuticalsarecurrentlyfromnativeNewZealandspecies

NewZealandnutraceuticalsbyproductsofexistingsectors
(2010) Sector Dairy Product Milk Byproductorwasteproduct Lactoferrin Colostrum Meat Seafood Venison Green lippedmussel Seafood Shark Produce Kiwifruit Blackcurrants Beverages Processed/other Forestry Wine Honey Wood Deervelvet Green lippedmusselextract Fishoil Sharkcartilage Sharkliveroil Kiwifruitextract Blackcurrantextract Grapeseedextract Beepropolis Beevenom Pinebarkextract

NutraceuticalsderivedfromNZnativespecies
(2010) Species Leptospermum scoparium Pseudowintera colorata Perna canaliculus Podocarpus totara Product Manukahoney Horopito Green lipped musselextract Totarol Origin TreenativetoNZ andAU TreenativetoNZ ShellfishnativetoNZ Tree nativetoNZ Substancenowknowntooccurin rangeofplants(e.g.rosemary)

PAGE29

1.Definedasbeingexportedinanycommercialquantity

PRESENCEINSELECTRETAILERS NewZealandproductshavehadlimitedsuccessinachievinginmarketcutthrough Manukahoneykeystandout todate

Presenceofselectnutraceuticalsinselectinternationalretailers
(#ofitems;May2011)
Presenceofbyproductorwasteproduct[notnecessarily fromNZ] Retail Chain #of stores 330 (Australia) 742 (Australia) Fishoil (alltypes) 50 Blackcurrant 8 Colostrum Shark cartilage 2 Deervelvet Kiwifruit extract 5(all cosmetics) UMFManuka honey 1 (incosmetic cream) 3 (Arataki;Bee Products) NZunique GLMussel Extract 1 Totarol Horopito

45

7,600 (USA) 6,000 (USA, other) 3,250 (UK,other) 1,600+ (UK) 1,149 (Canada) Onlineonly (Singapore)

75

1(seedoil)

1(as ingredient) 2

126

80

17

5 (Comvita; GoldenHills) 10 (Comvita; GreenBay)

72

15

18

2(1seedoil)

6 (Healtheries; other)

1 (Ripple[NZ])

1(as ingredient)

5 (Comvita; Woodlands)

Note:NonNZuniquemostlydonotlistsourceofrawmaterials;clearlynotallNZsources(particularlyfishoil,blackcurrantandsharkcartilage) PAGE30 1.DuetolackofonlinepharmacysitesinEnglish(e.g.WatsonsHKdoesntsellonline);Source:variousfirmwebsites;Coriolisanalysis

IDENTIFIEDBUSINESSMODELS Therearethreebroadbusinessmodelsforfirmsinvolvedinnutraceuticalsandfunctionalfoods marketing, manufacturingandIP

Identifiedbusinessmodelsinnutraceuticals
(model)
Marketing focus Supplements marketer Description Firmmarketingnutraceuticalsupplementstoconsumers

Manufacturing focus Contractpacker Firmprocessing/packing supplementsintoaconsumer readyform(capsule,pills,etc.) Large scaleproductionlines usingmodernequipment Efficientmanufacturing processes Largefactorythroughput Ingredientsmanufacturer Firmrefiningraworganic material intoisolated/ concentratedform

IPfocus

Firmspunoutofgovernment fundedresearchwithsome level ofIPprotection StrengthofIPprotection Capitaltofinanceclinical trials Abilitytoraisecapitalfrom governmentorVC Abilitytoselldiscovery Sizeofhealthsegment IP protection Difficultyofproductionor extractionprocess

Pointof leverage / driverof success

Strong, trusted,historical/heritagebrandsatretail Ongoing advertisingandpromotionalspending Largesalesforce abletoregularlyvisitandsellintoretail channels (e.g.healthstores) Ownmanufacturingplant

Barriersto entry Limitedshelf spacealreadyfullofexistingbrands Retailerswantingfewernotmorebrands Achievingscaleto beabletovisitindividualaccounts/stores Governmentregulations Certificationrequirements Capital cost Existingcontractsand relationships Ifgeneric,global manufacturer withlargest scaleinproduct(e.g.vitaminc) Ifregionspecific, regional refiner/processorwithlargest scale

Percontract packerplus Locationnearraw material supply(ifperishable) Accesstorawmaterial(if wasteproductofexisting process) IPprotectionaroundprocess orproduct Limited marketsize controllingnumberofrefiners possibleatscale ProcessorproductIP Capitalrequirement Firmswithaccesstoraw materialsfromexisting activity Firms alreadyrefiningsimilar products FirmswithstrongIP

Winners

Existing categoryleaderwhoaddnewflavourtorange GlobalF&Bmultinationalsandleadingregionalplayersin category

Firms thatselloutforagood price

Strugglers

Undercapitalised singleproductstartups Metoolateentrantswithoutleverage

FirmswithoutstrongIP

PAGE31

Source:Coriolis

EVOLUTIONOFFIRMSANDBUSINESSMODELS Firmsinthenutraceuticalsspacegothroughcommonevolutionarypathways
Simplifiedmodelofhownutraceuticalfocusedfirmsevolveovertime
(model) StageI StageII StageIII StageIV

Marketingfocus
Newcategoryofnutraceuticalis discovered1 orcomestolightdueto researchornewwasteproduct becomesavailable2 Passionateindividualdevelopsstrong beliefinproductduetopersonal experience Startup isformedanddevelops prototypeproductionequipment Productiscontractpackedbyothers Firmachieves initialsuccessduetolack ofcompetitionandnoveltyfactor Categorybecomesmorecrowdedas newfirms enter Newfirmsusecontractpackersrather thaninvestinproductioncapacity Categorygrowthrateslows asnovelty wearsoff(nolongerthenewthing) Firmseitherinvestinownproduction capacityorremaincontractpacked Firms oftenmoveintoalternative marketinganddistributionsystems (e.g.online,multilevelmarketing) Largemarketersnoticecategoryand launchproducts Existing playerslaunchnewproducts innewcategoriestoleveragefixed costs Smallermetooplayersstruggle and oftengooutofbusiness Effectivenessofproductisquestioned orchallengedbyfurtherresearch Nosingleproductfirmsremain; survivingstartupsnowbroadrange marketers Nowjustaflavourforexistingbig players Producthas founditslevelinthe marketwithgrowthatorbelow generalsectorgrowth

Manufacturingfocus
Personwithengineeringor manufacturingexperienceidentifies specificnicheprocessopportunity Startupisformed,oftenusingmixture ofofftheshelfandselfdesigned equipment Firmhashighcapitalcostrelativeto sales Firmseeksvolumebyfullyleveraging capabilitiesofprocess/equipment Firmexpands intonewunderserved areas Handsonfounderensuresproduction processisinnovativeandefficient Fullserviceonestopshopproduct development/packagingdesign Industryconsolidation Firmsnow large,fullrangesuppliers IncreasingemphasisonR&D Attemptstodevelopproprietary ingredients

IPfocus
Governmentfundedresearchleadsto newproductorprocessIP IPisrelativelyweak(i.e.nota patentabledrug/NME3)
PAGE32

Inventorstartsfirmwhichmaymove intogovernmentfundedincubator Firmmightreceivematched governmentfundingforR&D Firmraisesadditionaloutsidecapital dilutingownershipoffounder

Firmlaunchesproductcontaining compound Firmoftenpoormarketingskills Successmoredifficultthananticipated Firmschangesfocustolicensing

Firmeither: 1. runsoutofcash 2. isacquiredbymajorplayer 3. metamorphoses intomanufacturer ormarketer(above)

1.discovered canmeanidentifiedintraditionaluseinremotearea;2.Forexamplegrowthofvenisonandkiwifruitproduction inNewZealand;3.NewMolecularEntity(aka potentialpharmaceuticaldrug);Source:Coriolis

NEWZEALAND INDUSTRYTURNOVER Weestimateaggregateturnoveroffirmsinnutraceuticalsis~$1b

EstimatedsizeofNewZealandnutraceuticalsindustry
(NZ$m;2010) Comments/Notes IPFocus $10 Asdiscussedelsewhere,thereisnoreliablepublicly availablesourceofindustrysizedata Ouranalysisispreliminaryandshouldbetreatedas directional Thisanalysishassignificantlimitations,for example: HoneyiscurrentlyallhoneynotjustUMF manuka honey Supplementsincludesvitaminsand minerals DairyisaCoriolisbackoftheenvelope estimatesubjecttorevision;excludes FonterrasAnlene andAnmum Thetotalisbuiltupfromanaggregationof identifiedfirmsturnoverhowevermostof theseturnoversarethemselvesestimates Mostfirmsusetotalsalesnotnutraceutical componentofsales

ManufacturingFocus $240 Vitamins,Minerals andSupplements $420 SingleProductFocus $60

Honey $170

Dairy $200

TOTAL=$1,100m
PAGE33 Source:Coriolis

NEWZEALAND INDUSTRYTURNOVER Breakingoutthekeyfirmsfromtotalhighlightstherelativelevelofconsolidationbysector

EstimatedsizeofNewZealandnutraceuticalsindustry
(NZ$m;2010) Other10 firms $85 $30 $40 $168 IPfocused 10firms $10

$85

$82

25singleproduct focused firms

$28 $60 $19 $30

Other29 firms

$85

Other25 firms $94

$85 $200

TOTAL=$1,100m
PAGE34 Source:Coriolis(byaddingupeverycompanywecouldfind seeelsewhereindocument)

NUTRACEUTICALSETC. EXPORTSBYTYPE Itisdifficulttountanglemostnutraceuticalsfromthetradedata;availabledatashowsotherfoodpreparations notelsewherespecified1 andhoneyasthemainsuccesses

Nutraceuticalexportsbytype
(US$m;20002010) Otherfoodpreparationsnes1 (HS2016.90)
$306 $264 $162 $25 $27 $16 $5 $8 $9 $19

Total=US$369(2010) Honey (HS0409)

CAGR 17% $50 $14 $40 $59 CAGR $70 30%

DeerVelvet (HS0507.90)
$18 $16 $17 $15 $15 $19

CAGR $21 $20 $20 $19 1%

$344 $271 $268 $264

$121 $75

$68

20002001200220032004200520062007200820092010

PAGE35

$57

20002001200220032004200520062007200820092010 $9 $9 CAGR

20002001200220032004200520062007200820092010 $6

Vitamins (HS2936)

FishOil (HS1504.10+HS1504.20)
CAGR $3 $4 $3 $3 $5 NaturalVitamin Concentrate 7% $2 $3 $3 $1 $2 $2 $3 $2 FishLiverOil 39% $4 Total 9% $6 Total 9%

$6 $5 $3 $3 $3 $3 $2 $2 $2 $2 $5 $4 $5 $1 $1

$5 $5 $5 $1 $1 $5

$4 $4 $4 $3 22% 8%

$2 $1 $1 $1 $2 $0 $1 $0 $2 $2 $1 $2 $2 $2 $2 $1

$3 $2 Fishoil $1 3%

$1 Multivitamin $1 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 SingleVitamin 20002001200220032004200520062007200820092010

20002001200220032004200520062007200820092010

1.Fromourresearchweunderstandthisisprimarilynutraceuticalshoweveralsocontainsfoodingredientsandothersignificantnonnutraceuticals.Source:UNComtradedatabase; Coriolisanalysis

NUTRACEUTICALSETC. EXPORTSBYREGION Itisdifficulttountanglemostnutraceuticalsfromthetradedata;howeveravailabledatashowsallregionsare showinggoodgrowthexceptforrecentlyinNorthAmerica

$413

Nutraceuticals1 exportsbyregion
(US$m;20002010;definedonpreviouspage) $369 $357 $106 $356 $354 TOTAL

10Year CAGR 16% Absolute +$284m

Last Year CAGR 4% Absolute +$15m

$313 $89 $130 $91 $69 $206

$30

$111

$139

EAsia

12%

+$95m

24%

+$27m

$84

$72 $161 $73

$15

$18

$98 $93 $123 Australia/ 18% PacificIslands +$100m 25% +$25m

$65 $106 $85 $43 $24 $5 $1 2000

PAGE36 $5 $8

$136

$33 $38 $40 $64 $78 $30

$94 $48 $51 $22 $4 $1 2001

$6 $10

$64 $44
$10 $10 $41 $32 $107

$148

Europe NAmerica SEAsia Other

24% 15% 20% 24%

+$35m +$22m +$25m +$7m

19% 62% 9% 37%

+$6m $48m +$2m +$2m

$32
$5 $14

$50 $24 $4 2005 $29 $4 2006 $6 2007 $25 $7 2008 $27 $6 2009

$29 $8 2010

$5 $1 2002

$8 $1 2003

$15 $3 2004

1.Seechartpreviouspage;Includes:foodpreparationsnecin22106.90(substantialnonnutraceuticalcomponent);Source:UNComtradedatabase;Coriolisanalysis

WHATISTHEFUTUREOFNUTRACEUTICALS IndustrybodyNZNaturalProductshasarticulatedagrowthtargetof$5billionby2025;thiswillrequire11% growthyearonyear

Nutraceuticalsindustrysize
(NZ$m;2010vs.2025estimate) $5,000 Wherewillgrowthcomefrom?Ingredients orbrandedproducts? Asdiscussedelsewhere,thereisnoreliable publiclyavailablesourceofindustrysize data Ouranalysisispreliminaryandshouldbe treatedasdirectional Industrygoalalsoincludescosmetics(See Appendix) Comments/Notes

Toachievethisgrowthwejustneedto removealotofbarriers. CAGR (1025) 11%

Wereallyneedtofocusoureffortsto achievethisgrowth.

IPfocus Manufacturing focus Singleproductfocus Honey Dairy Vit.,Min.&Suppl.

$1,100 $10 $240 $60 $170 $200 $420 2010 2025 e

PAGE37

Source:Coriolisanalysis

TABLEOFCONTENTS
Section Contents Glossaryofterms Methodology&datasources F&BIPOverview Definitions Summary&conclusions Nutraceuticals a. Global Situation 20 27 38 Page 4 5 6 7 10 15

b.NewZealandSituation c.Observations FunctionalFoods/FoodsforHealth a. Global Situation

64 71 75

b.NewZealandSituation Appendices

THREEKEYOBSERVATIONS Interviewswithindustryparticipantsidentifiedthreekeythemesfordrivingthegrowthanddevelopmentofthe NewZealandnutraceuticalssector

1
TheIndustrymustbelegitimateand credible Present Outdatedlegislation Fragmentedproductlevelstandards Complexexportcountryrequirements

2
Industrycollaborationandconsolidationis required Highly fragmented Smallunderresourcedcompanies Unsophisticatedbusinesses

3
Industryandsciencemustalign Limitedcollaboration Limited commercialisationsuccessstories Lackofknowledgeofeachothersbusiness

Future

Clearanddirectionallegislation (e.g. proposedNaturalProducts ReformBill) Individualproductsaligningstandards(e.g. honeyindustry) Informationprovidedtoassistin interpretingandunderstandinginmarket rules NZseenasalegitimate,trustedandsafe industry

Largesophisticated companies Jointventuremarketingandscientific research AlignarounduniqueNZthemesand naturalstrengths

FullyIntegratedscienceandindustry relationships Positiverelationshipfosteringnew products Focusedonmarketdrivenproducts Balancedapproachtoblueskiesand appliedresearch

PAGE39

Source:Coriolisanalysis

OBSERVATIONS Observation1:theindustrymustbecomelegitimateandcredible

Observation 1 2 3 Legitimate&credible Collaborateandconsolidate Industry&sciencealignment

PAGE40

1 WHATARENATURALNEWZEALANDPRODUCTS?
Allindustryparticipantsspokenwithwantcustomerstoseethemasalegitimate industrywith acredible and uniqueproduct
Commonphrasesusedbyindustryparticipantsininterviews
(2011)

integrity clean and green trusted pure credible clean environment

secure

unique

unadulterated

PAGE41

Source:Interviews

1 LEGITIMATE&CREDIBLE
TheNZindustrymustexistwithinalegitimateregulatoryenvironment
Itisimportantthatwearelegitimate.Theindustryhastobesustainable,traceable,transparent,beconsciousofanimalwelfareetc.Wegot intotroublewithourpossumskinsbeingsprayedredinstores,evenecofurisfur.Withdeervelvet,thereneedstobeanimalwelfare considerations.Withthesharkcartilage,itneedstobesustainablyharvested.Industryrepresentative,NZ,2011 Australiahasthebestregulatoryenvironmentintheworld.NewZealandisabouttoupgradeitsBill.Itsthewildwestin NewZealand,there aresofterregulationsthaninChina.Youcanmaketabletsinyourbackyardandgetawaywithit.Weneedtobereplicating Australia'sTGA [TherapeuticGoodsAdministration].Ourmanufacturingstandardsneedtobehigher.Weneedcredibility andtomaintainareputation internationallyasexporters.Yougetthatbyhavingagoodregulatoryenvironment.CEO,mediummanufacturing/marketingcompany,2011 Youhavetostepuptothemarkorgetleftbehind.Industryrepresentative,NZ,2011 SomepeopleopenacompanyinNewZealand;theyputthecompanyaddressonthelabel,soitslookslikeitismadeinNewZealand.Thisis misleadingthepublic.Thereneedstobegovernmentregulationonlabeling.Youshouldhavetohaveamanufacturingnumberandhave countryoforiginonthelabel.ItallhurtsNewZealand. CEO,Mediumsized,manufacturingcompany,2011 Thereisalotofsnakeoilunderthedietarysupplementregulations.Manager,largemanufacturingcompany,2011

PAGE42

1 LEGITIMATE&CREDIBLE
CompaniesfeelBrandNewZealandisatriskfromdodgyoperatorsandcounterfeiting
Thereisthedodgy colostrum. CompaniesbuyNZskimandwholemilkanduseimportedcolostrumandsellitasProductofNZ.Who knowswherethecolostrumisfromandwhatthedairycowshavebeeneatingwhiletheyareinthebarns?ConsumersknowNZdairyproducts areallfreerange,pasturefed.Thatishappeningwithbeepropolisaswell.ManagingDirector,NZCompany,2011 HowdowesellNZInc.iftheproductisnotgrown inNZ? LabelsshouldntbesayinggrowninNZifitsnot.ThatisarisktoNZInc.Industry
representative,NZ,2011

CompaniesarecuttingcostsbystartingtomanufactureinNewZealand,butthefactoryisntevenstainlesssteel.Whatsortofdodgy plantis that?MarketingManager.,mediumsizedmanufacturingcompany,2011 HoneycompaniesarebringingintheirRoyalJellyfromChina;colostrumfromtheUSischeaperthanNZColostrum,soitsbroughtintoNZ. NotsurehowthatismadeinNZ?GM,Mediumsized,NZCompany,2011 SomecompaniesarenotsourcingNZmadeproduct. Weneedtogetridofalltheshitplayers. Wehaveareallybigproblemof misrepresentationofNewZealandgloballyanditcouldreallydamageusinthenext510years. Wemightnothaveanindustry.Marketing
Manager.,mediumsizedmanufacturingcompany,2011

ThereisalotofcounterfeitingofNewZealandproducts,especiallyinChina.Thishappenswithbeef,milk,wine,infantformula,alotoffoods. Weneedtojointogethertostopcounterfeiting.IfsaysitismadeinNZ,itmustbe.ThereareonlyafewfactoriesinNewZealand.Weall knowwhatourproductslooklike.CEO,Mediumsized,manufacturingcompany,2011 TherearealotofdubiousshelfcompaniesinNewZealand,tradingoffNewZealandsgoodname.Itsprettyunethicalwhatisgoingon. Contractpackersdontcarewhattheyaresellingandwhereitisgoing.Therearealotoffalseclaims.Itwillonlytakeonegoodscare.CEO,

largemanufacturing/marketingcompany,2011

PAGE43

1 LEGITIMATE&CREDIBLE
TheNaturalHealthProductsBillwouldappeartoaddressmanyoftheconcernsofindustry

MinistryofHealthdevelopment oftheNewZealandNaturalHealthProductsBill PurposeandPrinciple Thepurposeofthebillistoprovideassurancetoconsumersthatnaturalhealth productsaresafe,truetoclaimandtruetolabel. productapproval,basedonnotificationofproductsonadatabase recognitionofthedecisionsoftrustedoverseasregulators,whereappropriate alistofprohibitedingredients alistofpermittedingredientsandaprocessforaddingnewingredients alistofpermittedlowlevelnaturalhealthproductsclaims labelingrequirements advertisingrules exportcertification,whereitwouldassistcompaniestoaccessoverseasmarkets atailormademanufacturingcodeofpractice PasseditsfirstreadinginSeptember 2011

Keyelementsoftheproposed schemeare:

NextSteps

USAActivity NaturalProductsFoundation,USA,announcedanindependentinitiativethatinvolvesrandomproducttestingand weedingoutmisleadingadvertisements.Wewanttomakesureeveryoneplaysbytherules.ExecutiveDirector,NPD, Aug2007 USFederalTradeCommissionfocusedinthelastfewyearsonthedeceptiveclaimsofPOMWonderful,DanielChapter One,Acaiberries,Nestl'sBoostKidEssentials EU 2010(EuropeanFoodSafetyAuthority)manufacturersclaimsrequiredtobesupportedbyscientificdata

PAGE44

1 LEGITIMATE&CREDIBLE
Exportersfindinternationalregulationsandstandardsareverydifficulttokeepupwith
Itsverydifficult,therearecountrytocountryregulations,theyaredifficulteverywhere.InplaceslikeChinatheregulationschangeallthe time.Itsnotclearwhattheregulationsmean,theyarenottransparent.Therecouldbegovernmentassistancetohelpwiththis. Iftheyhelped outitwouldbenefitmany.CEO,Mediumsizedmanufacturingcompany,2011 Somecountriesaresuchapaintogetinto.ItcantakeacoupleofmonthstogetoneproductintoChina,butdoitrightandyouareOK.The corruptionisdisgraceful.MarketingManager.,mediumsizedmanufacturingcompany,2011 Therearemassiveregulatorybarriersinthesector. Manager,largemanufacturingcompany,June2011 Noclaimsgetthroughonthelabeling.Animmunitymedicalclaimmakesaproductpharmaceutical,butimmunitycanbeatherapeutic goodItiseasyforaproducttooverstepthemarkwiththeirclaims.Sometimestheydontliveuptotheirevidence.Manager,large
manufacturingcompany,2011

R&Disadoubleedgedsword.Youspend$100,000toprovesomethingliketheefficacyofproductbutyoucantpubliciseanyclaims,oryou aren'tasupplementyouareamedicineandyouneedtoregister.InHongKongforexampletheychangedtheirregulationsand we hadare registerasahealthproductnotpharmacy.Itshardtokeepupwithalltherules.GM,Mediumsized,NZCompany,2011

PAGE45

1 LEGITIMATE&CREDIBLE
Thehoneyindustryhavebeenincourtoverratings,standardsandpaymentsforanumberofyears
"Overthepastyear,theassociationhasspentsignificantsumsofmoneytoemployprofessionalinvestigatorsandtakeaction to removelicense holders'rightstousethemarkiftheirproductwasfoundnottobetruetolabel,"JohnRawcliffe,AMAHGM,Dec2008 Theindustryhadbeenstunnedbytheendingofa15yearrelationshipbetweenProfessorPeterMolanandtheActiveManukaHoney AssociationwhichrunstheUMFtestsystemhecreated.KerryPaul,CEOManukaHealthNZ,article,Dec2008 Theindustryleadersmustthinkofthecollectivegood.ThepresentsituationisnotgoodforanyoneanditputsNewZealand'sreputationat risk. NationalMPPaulHutchison,article,May2009 [Theindustry]hasgotallthepotentialofbeingaverylargeandsustainableindustryforNewZealand,reforestingNewZealandandbringing employmenttopoorercommunities.Ifwecouldjustalignourinterestsandstopthesquabbling,everyonecouldbenefit.BrettHewlett,Comvita
article,May2009

Thefeudingisafinancialdrainontheassociationandthecompaniesinvolved,thebiggestrisktothemanukahoneyindustrycomesfromthe amountofdubiousmanukahoneyontheshelves,andawarringindustrycannotdealwiththat. article,May2009 ProfessorMolansaid[byhavinganindependentsystem]hewasactinginthebestinterestsoftheindustry:"Ifpeoplearehavingdoubtsabout thecredibilityandreliabilityofwhattheyarebeingtold,theywillstarttowonderiftheycanbelieveanythingtheyhave beentoldabout manukahoney.Thatthreatisparticularlypointedasthehighestvalueuseformanukahoneyisinwounddressings,soanytaint ofscandal couldbehugelydamaging.article,May2009 Thebehaviourofthehoneyindustrycompaniesisappauling,itsadisaster.Theyneedacommonstandard,theyhaveUMFfactor,andMGO ratingsystemwhoknowswhatelse.Theyaresendingmixedmessages.Theyneedtoworktogetherandcoordinate.Comvitadidsuchadam goodjobbutfelloutwithWaikatoUniversity.Theytookthemtocourtandlost.Theindustryissuffering.ItsnotuntilyougetoutofNZthat yourealisehowtinyweareandrealisethatweneedtoworktogether.EveryoneisreallycompetitiveinNZbutourcompetitionshouldbethe worldnoteachother,wearetoosmall.CEO,NZCompany,June2011 ComvitaandWaikatoLinkinthehighcourtoverrepresentationsofresearchresultsinvolvedwithisolatingandclassifyingtheactivecompound behindUMFManukahoney(resolvedinJune2010). Honeyputsuchnegativemediaontothemselves,alltheinfightingandthepublicspats.Theyreallyneedtoworktogether.Theyarenotdoing themselvesanygood.IndustryRepresentative,June2011

PAGE46

1 LEGITIMATE&CREDIBLE
Thereiscallfortheexistinghoneyclassificationsandstandardstobealigned;itiscurrentlyconfusingconsumers
Thehoneysectorneedsto worktogether,itisadisgrace. CEO,NutraceuticalCompany, June2011 Company Trademark Example standards Measures methylglyoxalcontent Notes DevelopedinUniversityof Dresden 2007

UMF (Active ManukaHoney Association)

ActiveUnique Manuka Factor identifynonperoxide antibacterialactivity

28NZlicensedusers

Molan Gold Standard

Original manuka activity

Defensive Antioxidant Capacity (DAXC)

Preemptive Antioxidant Activity (PAXC)

antibacterialactivity, defensiveantioxidant capacity(DAXC)and preemptive antioxidantcapacity (PAXC)

ProfessorMolan University ofWaikato UseActive10+,15+20+ and25+

PAGE47

1 LEGITIMATE&CREDIBLE
Manyplayersfeelthatsciencewilllegitimiseproductsandaidsales
Itisimportantthatwehaveabiastowardsclinicalbasedevidence.Wecantbecompetingfromthebottomend,weneedtobeupwiththe sciences.Pseudosciencegetsdiscredited,ifsomethinghasdodgyefficacy,andwillbefoundout.Clinicaltrialsandrealsciencehasvalidity.We havetodifferentiateourproductswithscience.Onceyouhavescienceitislikeabarriertoentryforothers.Industryrepresentative,NZ,June2011 Ourmainbasisisfindingscientificfoundations.Weadoptascientificapproach.Ourkeydevelopmentistocomefromanaturalproducts perspectiveusingstrongtechnologylikecombiningmanukahoneyforwoundcare.Thereisabigopportunitywithprofessional organisations; hospitals,theretirementsector,burnsfacilitiesetc.WeusethesciencecapabilityinNZandoffshore.TherearehugeopportunitiesinMedical Foods,cosmeceuticals,ingredients.Thereislowmarketawarenessofmanukahoney,theopportunityishuge.MD,HoneyCompany,June2011 Towinyouneedscience.Fiveyearsagoitdidntmatter,butnowyouneedsciencetobackyouup.Youcansourceyouringredientsfromabig companythathasdonethescienceandusethat.CEO,largemanufacturing/marketingcompany,2011 WellresearchedsupplementssuchasvitaminD,fishoilandomega3swillcontinuetopostrobustsalesinthefutureatestamenttothefact thatgoodsciencehelpsdrivebusiness.CouncilforResponsibleNutrition,USA Naturalmedicineshavetobeevidencebased.Thisistheonlyway.CEO,mediummanufacturingcompany,2011

PAGE48

1 LEGITIMATE&CREDIBLE
Honeycompaniesaremovingintowoundcareandhoneyimpregnateddressingsandbandages

Company

Brand

Example

Notes 100%MedihoneyAntibacterialMedicalHoney. Medihoneywound dressingregisteredinUSA,FDAin2007

JVwithLinks Medical MANUKApliisthesterilewoundgeldressingmadewith MolanGoldStandardof16.bacteriostatic1,anti inflammatory1,andantioxidant2,3healingproperties

Wehavethelozenges,andcreamwhichareUSDAFDAapproved.Wehavea50:50partnership.WeowntheIP, manufactureanddevelopandJ&Jdistributeandwecollecttheroyalties.Wearealsolookingattheantiviral applicationsofthehoney.Owner,honeycompany,2010 FundingforManukaHoneyR&Dtodeterminetheeconomicsandenvironmentalinfluenceofhoney productionhowlocalecosystemseffectyieldsandactivitylevels.Comvita,May2011 Yougetthebigcompaniestodevelopthestory,thescienceandtrials,theycanaffordit.Thenyouchampionthe hospitalsanddoctorsandbuildmomentumfromthere. BusinessManager,mediumsizedmanufacturer,NZ,June2011

PAGE49 Source:CompanyandAssociationwebsites

OBSERVATIONS Observation2:industrycollaborationandconsolidationarerequired

Observation 1 2 3 Legitimate&credible Collaborateandconsolidate Industry&sciencealignment

PAGE50

2 CONSOLIDATION
Manycompaniesidentifiedscaleasoneofthebiggestissuesinthesector
ScaleisahugeissueinNZ.Iwouldlovetoseemoreverticalintegrationrightthroughfromtherawmaterialtothebrands.Industry
representative,NZ

ItisverydifficultforsmallNZnutraceuticalscompaniestoexportbythemselves,thereissomuchtoknowandlearn.CEO,Mediumsized,
manufacturingcompany

WearenotpioneersinR&Danymore.Wedonthavebigenoughcompanies.Theyareallpiddlyassplayers.MarketingManager.,mediumsized
manufacturingcompany

Youhavetohavescaleandvolumetobecosteffectiveinyourplant.ItismorecosteffectivetobeinNZthanAustraliawith plants.CEO,
Mediumsized,manufacturing/marketingcompany

Forlittleguystheymayhaveaproducttheythinkisgreat,buttheycantaffordthescience,orknowhowtocommercialiseit. Thatswhyit doesntgetpastniche.CEO,mediummanufacturing/marketingcompany,June2011 Thelifecycleoftheproductchanges,whenyouareyoungandanewingredientyouneedsomeclaimsandyoumoveintothehealthfood storesandhealthchains,andindependents,youneedabigsalesteamandthatishardandexpensive.Inthesechannelstheconsumerneeds moreadvice.Asaproductbecomesmoremainstreamitcangointoapharmacyorsupermarket.Themarginsaremuchbetteratthehealth storelevelbutthereisntenoughscale.LookatAustraliatheirnaturalhealthmarket(supplementsandvitamins)is$1.4binNZits$250mCEO,

mediummanufacturing/marketingcompany,June2011

Thesmallercompaniesareapain,theyareentrepreneurswhoplaythemarketanddevelopastorywiththeirnutraceuticalproductandtryto getthemessageout.Butthescienceisreallydifficult.Iftherewasrealsciencethebigcompanieswouldbeinthere.BusinessManager,medium
sizedmanufacturer,NZ,June2011

Inourbusiness,weneed4050productsthroughdifferentstagesoftheirlifecycle.Weneedtohavethatcriticalmasstomakemoney.
BusinessManager,mediumsizedmanufacturer,NZ,June2011

Withnutraceuticalsthereisnoclearmarketinglineyoucanuse.Peoplearemoreusedtothepharmaceuticalwaywhichisvisit doctors,get prescribedanIPprotectedmedicineyoucanuseandgetresults.Naturalproductsaremoresubtle,abithippy,yourenotsure itisworking, thereisnoIPthereforetherearelotsoflittlecompaniesinvolved.BusinessManager,mediumsizedmanufacturer,NZ,June2011

PAGE51

100

150

200

250

300

350

400

50

2 CONSOLIDATION

(actual#;mostrecentyearavailable)

Employeenumberofidentifiedindustryplayers

ThemajorityoftheidentifiedNewZealandcompaniesaresmall,therearefewcompanieswithanyscale

PAGE52

Vitamins,minerals &supplements

Vitaco RedSeal IntegriaHealthCare GoodHealth NewImageGroup NZNutritionals Lifestream ImmunoLaboratories Health&Herbs Douglas Xtendlife HealthWorld Phytomed Evergreen Horleys Nature'sSunshine DeepBlueHealth Artemis Naturies GOHealthy Abeeco TheYoghurtCapsule Iconherb NatureSource Nutressence Homecare NewZealandHealthFoodCo NZNewParadise SkybrightNaturalHealth Immunecare NZHealthNaturally

1.Estimateoftotalemployedinnutraceuticalsinthedairyindustry

Manufacturing

AlphaLaboratories GMPPharmaceuticals NewZealandPharmaceuticals UnitechIndustriesLtd TauraNaturalIngredients Alaron Nutrizeal PharmaZen(WaitakiBiosciences) GenesisBioLab RMFNutraceuticalsNZLtd ExtractsNZ ClaridgesOrganic UBBio MarketNZ

IP

BlisTechnologies Quantec SeperexNutritionalsLtd Somnaceutics SupremeBiotech Anagenix EnCoate MigcoPharmaceuticalsLtd PhotonzCorporation SpiersNutritionalsLtd

Honeyproducts

Comvita HoneyMark Watson&Son/Manukamed AratakiHoney ManukaHealth Airborne HoneyNewZealand Mossop's PackageBees NelsonHoney&Marketing(NZ)Ltf NewZealandHoneyCo PureNewZealandHoney HappyVallyHoney Honeylands BeeWild Haddrell'sofCambridge WaitemataHoney AlpineHoneySpecialities BeeHealthy WaitakiHoney Manu StrathdaleHoney TheHoneyCompany SummerGlowApiaries HappyFamilies Nature'sCountryGold OtagoHoneyProducts MilburnAviaries ApiHealth AutumnValleyHoney Honeyland TotalDairy

Dairy1 OtherSingle focusproducts

VitalFoods FunctionalWholeFoodsNewZealand Aroma JustTheBerries Seadragon Enzogenol Silberhorn Agrilab AoteaPacificLtd En'ZaqAquacultureLtd NZExtractsLtd(MudHouseWines) OilSeedExtractionLtd(MidlandsHoldingsLtd) Biovittoria PureVitality BioOils ForestHerbs MountainRedNewZealand Hubris GrowthFactorMatrix Nature'sGreenz GreensforLife EssentiallyNZ EvolutionaryHealth.OrgLtd

2 COLLABORATE
IntervieweesidentifiedtheneedformorecollaborationamongNewZealandfirms
ItsarealshamethatsomeofthebiggercompanieslikeFonterra,Talleys,Sealord,Sanford,alotofbigplayersdontnurturesmaller companiesandassistthisoffsideindustry.Theyshouldbebuildingcapabilitiesandknowledgenow,understandingthemarket,develop relationships,potentialcustomersetc.Thereislowtonosupport;theindustryisbarelytolerated.Theyare50yearsbehindtheworldleaders. Itissad,frustratingandirresponsible.CEO,mediumsizedmanufacturingcompany,2011 InNZwetendtothinkthatthecompanydowntheroadiscompetition,theydontwanttoshareanything,butiftheyunderstoodeach othersbusinessandstartedwithlowriskarrangementslikesupplychainthenmoveintomorehighriskventuresitcouldwork.Theyslageach otherbutifsmartenoughtheywouldworktogether.IntheUSacompanywilltake5%inNZtheywant50%ownership.Industryrepresentative,NZ Theeconomicargumentforthesectorisnotalwaysclear.Itisdifficulttogetshelfspace,thereisalotofcompetition,therearesomebig namesinthearea.WehavesomesmartcompanieslikeVitacoandComvita,theyraisethesector.Canothersleverageofftheirbrands? Maybeweneedtostopcreatingnewbrandsandstartleveragingtheoneswealreadyhave.Whynotworktogethermore.Industry
representative,NZ

ThereisamentalityinNZ,itisaprotectiveattitude.Theywanttodoitall,ornotatall.Theseafoodsectorwontworktogether.Theyshould worktogetherandshareprofits,itwouldmakesuchabigdifference.Seafoodresearchisdifferentfromtheircorebusiness. Theyare commodityplayers,topullouttonnesoffishandputafewasideforusistoohard,whybother.Scientist,NZ Wecanworkasateamwithinmarket sales.Wecangetreallygoodpeopleinmarketwhoareproductspecialistssupportingafew companies.Itsexpensivebuteffective. Scientist,NZ WegivecompaniesthepotentialtoexportintoChina.TheyuseoursystemtodistributeandaccessChinafromNZ.Itisachallengeforasmall companytogetintoChina,therearelotofbottlenecks.WehaveopenedstoresinChinatosellNZandAustraliaproducts. CEO,mediumsized
manufacturingCompany

Wecouldworkwithothers,wecoulddothesmallerrunsandFonterracoulddothelargeruns.Theydontwanttobotherwith smalljobs.I thinkthereisarealopportunitythere.BusinessManager,mediumsizedmanufacturer,NZ,June2011

PAGE53

2 CONSOLIDATION
Thereareawiderangeofpointsinthesupplychainthatwouldbenefitfromincreasedeconomiesofscale,either throughcollaborationorconsolidation
Keyareasofsupplychainfordrivingeconomiesofscaleinnutraceuticalssector
(model)

Research & Development

Production

Sales

Marketing

Proprietaryclinicalresearch Captive researchcentres

Utilisation ofplantcapacity Technologyforstandardised dosages Truckload/pallet/container shippingvolume

Salescoverageovermultiple channels Sophisticated category managementprograms (retail)

Largebrandumbrellas Brandbuildingprograms Understanding andexploiting consumersegmentsand conditions

GMPisprovidingaportalandcommonplatformtosellNZand AustralianproductsintoChina.NewZealandsmallandmedium businessescannothandlethemselvesinChina.Thereisahuge bottleneck.ThereisahugeopportunityinChina.

PAGE54

2 NUTRACEUTICALS TRANSACTIONS
TherehavebeenahandfulofidentifiedtransactionsinthenutraceuticalssectorinNewZealand
Recentmajornutraceuticalindustrytransactions
(20062011)
Date 2011 Apr2011 Feb 2011 Acquirer Comvita Tate&Lyle AmajorBritishlisted firm NewImage NewImage Target KiwiExtracts(ExtractsNZ) BioVittoria omega3fishoilintellectualproperty andprocessingtechnologyfromSpeirs NutritionalsPartners SomnaceuticsLtd 50.01%ofLivingNature N/A Price N/A Details Acquired remaining67%shareofbusinesstosecurepropolissupplychain Agreementforglobaldistributionandsales;marketunder T&LPurefruitbrand.12%stake Selling omega3fishoilintellectualpropertyandprocessingtechnology SpeirsNutritionalshasrightstocommercialisetechnologydeveloped bytheRiddetInstitute,basedatMassey University,thatallowsomega3oilstobeincludedinnormalfooditemswithnoimpactontasteorsmell IncludesSomnaceutics'patentsandintellectualpropertyonSleeptime, anaturalsleepenhancingmilkproduct developed inNewZealand byscientistProfessorBobElliott LivingNatureisbasedinKerikeriandisthemanufacturerofnaturalskincareproductsforovertwodecades ThefirmusesarangeofingredientsitcallsLivingNaturethatsimplyreferstorareNewZealandbioactiveingredients thatareattractivetointernationalclients. WestlandMilkProductsacquirestheremainingsharesofEasiYo, takingownershipto100% Danishbiobasedcompanyacquires17%shareinPlant&Food spinoffGraceLinc,setuptocommercialiseGlucagel a solubledietaryfibrethathaspotentialhealthbenefits,particularlyforcardiovascularhealth, digestivehealthand glucoseandweightmanagement Nolongerinbusiness NZs largestpharmaceuticalfirmacquiredsecondtiersupplementsmarketer/manufacturerwithCliniciansbrand AcquiredThompsonGroup vitaminsandsupplementsbusiness; ChangednametoIntegra Healthcare Branded sportsnutrition andweightmanagementproductsthattradesundertheHorleys brandname AcquirerisMalaysian/Singaporelisteddairy/F&BfirmwithorigininMalaysian condensedmilkbusiness Rollup oftwo smallerfirmsintolargerfirm;renamedVitaco ConsistsofNutraLifeHealth&Fitness,NutraLifeNZLtdandHealthinternational ManufacturessupplementsandhealthfoodswithstrongbrandssuchasNutraLife,Kordels,Balance,Wagnerand Trilogy NutraLifeshareholder MikeThompsonbecomes 20%shareholder innewcombinedentity EstablishedinNewZealandin1904 NowpartofVitaco Originallyaspecialityflourmillerthecompanyhasgrownintoamarketleaderinsupplements,functionalbeverages andhealthyfoods; Exportsitsproductstomorethan20countriesincludingAU,UKandSingapore

Dec2010 Oct2010

N/A N/A

Jan2010 Dec2008

WestlandMilk Products Danisco

Remaining EasiYo sharesto100% 17%ofGraceLinc fromPlant&Food Research

N/A N/A

June2008 Apr2008 Sep 2006 Dec2006 Douglas Pharmaceuticals ToddCapital/Todd Corporation Etika International NextCapital Clinicians Thompsons fromSanderson family Naturalac Nutrition(Horleys)from Fonterra NZNutraLife N/A N/A NZ$7.8m N/A Oct2006 NextCapital HealtheriesfromGaryLane A$21m

PAGE55

OBSERVATIONS Observation3:thescienceagendaneedstobebetteralignedwiththeneedsofindustry

Observation 1 2 3 Legitimate&credible Collaborateandconsolidate Industry&sciencealignment

PAGE56

3 ALIGN
Scienceisimportantbutexpensive
IntheUSAandgettingtostage3clinicaltrialstakes4yearsandcostsunder$5mthisisalotlessthanthe12yearsand$1.2bittakesfora pharmaceuticalproduct.Ifyouhavetheevidenceyoucansellyourproductwithmedicalclaims.Obviouslythistakesinvestment.CEO,medium
sizedmanufacturingcompany,2011

Researchisexpensive andweneedlotsmoremoneyforresearch.Ihavebeenwellsupportedbutweneedmorepeopleworkinginthearea ingeneral.IntheEUtheyhavelotsofpeopleworkingintheseafoodnutraceuticalsresearchspacewithalotoffunding.Scientist,NZ,June2011 Researchisexpensive,thatswhyitislimitedinNewZealand,alackoffunds.Butweneedsomuchmorefundingforresearch.GM,

Nutraceuticalscompany,June2011

Wedontdoanyscience,wecantaffordit. Weleaveituptothecustomertodothat;theNestlesofthisworld. Theyknowthescienceso muchbetter.CompanieslikeNestleandKraftareouttherewithresearchbudgetsbiggerthanallourcountries.BusinessManager,mediumsized

manufacturer,NZ,June2011

Theindustryishard.Youcantjustkeepfeedingthemachine.IndustryExecutive,June2011 Therewasanextractthatwasshowntoremoveheadaches,butwhentheyrealised theywouldneed$10mforR&Ditjustwasntgoingto happen.CEO,mediumsizedmanufacturingcompany,2011

PAGE57

3 ALIGN
Todevelop,theindustryneedsassistance,butthisneedstobedirectedeffectively
Everytimethereisagrant,peoplearescramblingtogetthemoney.Scramblingtogetmoremoneyflusheddownthetoilet.Manager,large
manufacturingcompany,June2011

Thesectorisverydifficultwithlimitedpotential.Itsgoneonfortoolong. TheCRIsthinkitstheholygrail,butitsincrediblydifficult.Its goneonfor10years,wearegoingtodothis,wearegoingtodothatbutsuccessisreallyhard.Therearemassiveregulatorybarriers.You needtobeapharmaceuticalcompanytosucceedinthissector,butwecantinvestlikethem. Theyhavebillionsofdollars,verystrongIP,a hugemarketingarm.Itsamucheasieroptiontomakeapseudoclaimandmakesnakeoilattheendoftheday.Manager,largemanufacturing

company,June2011

Therearelotsofreallybigcompaniesthathavebillionstoinvestinscience. Ifyougotoofardownthesciencelineyouneedtodomorethan justproveefficacyandthatgetsreallyexpensive.YoustartbeingapharmaceuticalcompanyandyouneedbigdollarsforthatManager,large

manufacturing/marketingcompany

Theyhavethenewvouchersystemnow,itsveryunfocussed.Sittingdownwithgovernmentisveryfrustrating,thedepartments changethe staffchange,theyhavehighidealsbuthavenoideahowtogetthere,orhowlongittakes.CEO,smallmanufacturingcompany,2011

PAGE58

3 ALIGN
Industryisinterestedinproductswithrealcommercialpotential
NewZealandsciencehastoseriouslylookattheroutetomarket.Ifthereisalreadyaproduct,itisOK. Thereisnoopportunitytodevelopa brandfromdiscovery. Itsaneedleinahaystack. Evenifyoudohaveaningredient,bythetimeitgetstotheendproductatretail,itisa minisculepartofthefinalvalue.Thereforetheproducthastogetintothemainstreamtomakeenoughmoney. Willthathappen?Manager,
largemanufacturingcompany,June2011

Yes,wewantscience,butwearentgoingtopayforit.Wearentspeculative.TheVCfundscandothat.Ifitisprovenalready,thecompanies cancometousandwewillsellit.CEO,mediummanufacturing/marketingcompany,June2011 LotsofthingsarebeingdoneinUniversities,buthowsaleableandcommercialisit?Imnotsure.Itshardworktogetthingsoutofthere. Theyholdonforpatentstoolong.Theydontmanagestaffwell.Theysaythingsinpublictheyshouldnt.Theydonthave apersonwhocan seevalueandopportunities.Theyarentexposedtoenoughbusinessorprocesses.Theyeitherovervalueorundervalue.Iftheyovervalueit, theyoverinvestandkillit.IndustryExecutive,2011

PAGE59

3 ALIGN
Therewasawidespreadperceptionthatindustryandsciencedonotcurrentlyunderstandeachothers businesseswell
WesometimespartnerwiththeCRIs,butitnevercomestoanything. Therehasneverbeenaproductthathascomeoutofit.Manager,Large,
manufacturing/marketingCompany

WeworkwithAgResearch abit,butitsdifficulttogetaproductthatturnsintosomethingcommercial.Itshardtogetalltheducksinarow: science,processing,IP,sales. Youneedbasicscienceandpeoplewhoarekeepinguptodatewithwhatishappeningintheindustry. Butwe dontexpecttogetanythingoutofit.Theyhavetohaveabusinesscontact.Theywereresearchinglactoferrin andpurifyingit,butsopurified itwastooexpensiveanditwasntlinkedtocommercialreality.Theyarereallyjustintriguedbythescienceanddocumentingit. Theynow havetogeneraterevenueandtheydontlikethat. Ithinkalotofscientiststhinkthatcommerceisdirty.Weneedmiddleground.Business
Manager,mediumsizedmanufacturer,NZ,June2011

Thereisahugemismatchbetweencommercialrealityandscience.Itisscienceforsciencesake. Theydontthinkabouttheregulatory barriers,aboutwhatyoucanandcantsay,andthecostoftakingtheproducttomarket(ifitgetsthatfar).Thesciencemustbedirectedfrom acommercialbasis,fromwhatwillworkandwhatisbeingdemanded.Wholefoodsandfunctionalfoodsaremuchmorelikelyto succeed.

Manager,largemanufacturingcompany,June2011

ThechallengewithscienceinNewZealandiftheylookforefficacy,thentalktosomeoneaboutcommercialising theproduct.Itneedstobe targeted.Ithastobeaproductthatisindemand.CEO,mediummanufacturing/marketingcompany,June2011 WehavesomegreatscientistsinNewZealandbuttheyhavetofocusontherightproducts.Theymustbesolutionfocusednot product focused.Otherwiseitsacompletewasteoftime.CEO,mediummanufacturingcompany,2011 Wehavescience,butitworksinisolation.Theydontknowhowtocommercialise anditsnottargetedtoconsumerdemand.CEO,large

manufacturing/marketingcompany

PAGE60

3 ALIGN
Manyindustryplayersfeelthatscienceintheindustrycanworktogethermorecollectively
Weneedcollectivewisdom.Theindustryneedstogettogetherandagreeonadirection,asciencefocuseddirection.Getinvestmentfunds andfundslikeTechNZ,thenbringingroupslikeIRL,PlantandFood,Trinity,theUniversitiestodotheresearch.GroupslikeNZFSAalsoneedto beonboardsotheregulatoryenvironmentisintunewiththesector.Theycanhelpthecompaniesgetcertifiedandcredible.Likewiththe honeygetgreatevidencetoshowmanukas virtues.Weneedtoidentifythegenuinelypowerfulproducts.Thencollaborateinproduct developmentandmarketing.Governmentshouldencouragecollaboration...Industryrepresentative,NZ Wearenotinthemarket,thereisnolinkbetweenus,theotherscientists,andwhatishappeningintherealworld.IfyouwereinanEU businessparkyouwouldtrotdowntheroadandmeetthemanufacturersdealingwiththeproducts.InNZwearetooisolated.The missingbit ismarketingandstrongmarketinformationandsignals.Whattheywant,whowantsit.Thechainfallsapart.Thereneedstobeastronglink betweenrawmaterials,processing,science,productandthemarketenduser.Nutraceuticalscompaniesdonthavetimeorcanaffordtolook forthingsIhavemade.ThereneedstobeacoordinatingbodyliketheDairyBoardusedtobe;theycoordinatemarketing,business development,linkpeopleetc.Itcouldbefundedbyanindustrylevy.Thiswouldhelpeveryonemakegooddecisions.NZissosmalltheworldis sobig,weneedtoworkasateam.Scientist,NZ Wecanhaveagreatproduct,withgreatscience,butthereisnovehicletocommercialise anditturnsintoadisaster.Sciencesometimes doesntlisten.Needtocometoanagreementbasedontheconsumerneed,ifthereisnoneedtheproductwillgetpassedover. SetupaFoodInnovationinstituteatMassey,amongsttheUniversity,CRIsFonterraetc.R&DCentres alwayslosemoneyunlesstheyaretied toaUniversity.Theytendtobethemajoruser.Ittakes$5$10mtogetrunning.Businesswillthensupportit,ifitsgettingvalue.Thereshould beonlyone,notalotofthemspreadallaroundtheplace.Weneedtofocus.IndustryExecutive,2011

PAGE61

3 ALIGN
Thesectormustalignunderwhatthemarketisdemanding
Theailmentmustdrive decisionmaking

Alldecisionsmustbemarketled,oritsacompletewaste.InNewZealandwearetoofocusedonproductsandourrawmaterialsandnot enoughontheailments.WeshouldbelookingatCalciumdeficiencyandthenfindingtheproductthatsuits.CEO,mediumsizedmanufacturing
company,2011

Wehavetobeprovidingtheproductsthattheconsumerswant.CEO,largemanufacturingcompany,2011 Itisvitalthatallproductsthatareresearchedarebeingdemandedbyconsumers.Weneedtofocusontheareasofgreatest demand.CEO,

largemarketingcompany,2011

PAGE62

3 ALIGN
Realisingthecommercialpotentialfromresearchisparamount
FRSTSelectprojectexamplesDiet,HealthandNutritionrelated
(NZ$m;2005/062010/11) Funding (NZ$m) $17.1 $17.1 $11.1 $10.5 $8.9 $8.2 $6.6 $5.6 $5.2 $4.0 $3.4 $3.3 $3.3 $2.9

Industry Crop&Food PlantandFood HortResearch AgResearch ViaLactia BioSciences AgResearch HortResearch HortResearch Crop&Food Massey University NIWA AgResearch Fonterra PlantandFood
PAGE63

Exampleprojects LifestyleFoodsforEnergyBalance:TheCarbohydrateStory LifestyleFoodsforAppetiteControl WellnessFoods Innatedefensemoleculesincows'milk Developingnewfoodsandingredientsforthehealthandwellnessmarket Premiumexportandhighermargindairybasedfoodsolutionsforimprovedintestinalbarrierfunctionin infantsandtheaged NewHealthyandFlavoursome BerriesandProducts FreshandProcessedBerryfruitProductstoEnhanceGutHealth Newhealthmarketopportunitiesfromunderstandingandexploitingfoodmicrobehostinteractions underpinningthehealthyhumanbowel Futurefoods anewcapabilityforNewZealand'sleadingindustry TeWhatukura aTakaroa:NutraceuticalsfromSeafood Premiumexportmilkbasedfoodsforpreventionofallergyininfantsandyoungchildren Probioticsfornoveldairybioactives Fruitderivedcompoundsandtechnologiestoalleviateinappropriateinflammation

Note:MSIpriorto2011fundedviaFoundationforResearch,ScienceandTechnology(FRST),IncludesPublicgoodfundinginfood sector;ExcludesfundingviaTechNZ Source:MSI; Coriolisanalysis

TABLEOFCONTENTS
Section Contents Glossaryofterms Methodology&datasources F&BIPOverview Definitions Summary&conclusions Nutraceuticals a. Global Situation 20 27 38 Page 4 5 6 7 10 15

b.NewZealandSituation c.Observations FunctionalFoods/FoodsforHealth a. Global Situation

64 71 75

b.NewZealandSituation Appendices

EXAMPLES FOODSWITHHEALTHCLAIMS Whendevelopinganassociationinconsumersmindswithhealthclaims,ithelpstohavealargewellfinanced organisationbehindyou

Examplesoffirmsinvestinginthedevelopmentoffoodswithhealthbenefits
(various) Product Heinz Ketchup Situation/Issues In1981Reganadministrationproposes classifyingketchup asavegetabletosave moneyinschoollunchprograms SalsaoutsellsketchupinUSmarket(80s) Solution OceanSpray Cranberryjuice Sunkist Oranges Product isquasimonopolyproducerbyhighly profitablegrowercoop(formed1930) 1959cranberryhealthscarecausespricecrash Cranberryjuicesalesflatten Cranberryjuiceprimarilysugarnotjuice Citrusseenasaluxury Depressioncausesorangepricestofallunder costofproduction HJHeinz,HuntWesson(US#2ketchup)andCampbellsSoup (tomatosoup)formtheTomato ResearchCouncil(TRC)toeducateindustryandconsumersonthehealthbenefitsoftomatoes TRCdoesnotdirectlyfundlycopeneresearchbutcompaniesinvolveddo TRCappointsScientificAdvisoryPaneltocontributetocredibilityofprogram 1997theTRCandtheAmericanHealthFoundationsponsorinternationalsymposiumontheroleof lycopeneandtomatoproductsindiseaseprevention HeinzrunsadsLycopenemayhelpreducetheriskofprostatecancerandcervicalcancer Ketchupandtomatoesbecomeassociatedwithhealthbenefitsoflycopene OceanSprayfundsresearchintohealthpropertiesof cranberryjuice OceanSprayfundedresearchshowscranberriesinterferedwiththepresenceofbacteriainthe urinarytractandotherhealthbenefits Cranberriesbecomeassociatedwithproanthocyanidins healthproperties,particularlyinrelationto urinarytractinfections 1907Firmconductsfirsteverconsumeradvertisingforaperishablefruit 1917ScurvyoutbreaksduringWWIleadtofurtherresearchandpreliminaryidentificationofvitaminc 1922Sunkist agrowerownedcooprepresenting80%ofWesternUSgrowers runsfirstcampaign associatingorangeswithnewlydiscoveredvitaminc(headline:140,000doctorswouldagree) 1932RelationshipbetweenvitaminCandantiscorbuticfactorisdiscovered;otherresearchlinking vitaminCwithhealthbenefitsfollows Sunkist(andothers)heavilypromotingorangesashighinvitaminC OrangesbecomeassociatedwithvitaminC;consumptiongrows

PAGE65

Source:Coriolisfromvariouspublishedsources

FINANCINGIMPORTANT Itisrecognisedthatinvestmentrequiredforproductdevelopmentandmarketingisenormous
WithDanones brandsActimel andActiva ittook1015yearstoreallytakeoff.Therewassomuchinvestmentandmarketing.Itwasntthe sciencethattookthetime,itwasthemarketing.Ittakes56yearstobreakeveninanewcountryThebrandissomuchmorethanthe science.Youneedtounderstandthemarketandtheconsumers.IndustryExecutive,2011 WhensellingdairyproductsintoAsiaitisallfunctional.Weneedsomuchinvestmentforsalesandmarketing.Weneedtosell thehealth benefit.Manager,Dairycompany,large,2011
Theamountofinvestmentrequiredtoreallyresearchsomethingnewismassive.Weightsatietyhaspotential.Buildingabrand andfindinga productthatwillappealtoconsumerswillbehuge.Manager,Dairycompany,large,2011

PAGE66

WHATAREFUNCTIONALFOODS Functionalfoodsexistinaspectrumofhealthrelatedfoods;asdiscussedearlier,wedefinefunctionalfoodsas foodtowhichhealthrelatednutraceuticalshavebeenadded1

EXAMPLES:SelectionofhealthrelatedfoodsforsaleinSainsburyintheUnitedKingdom
(2011)

Nutritious foods

Foodswithstronghealth relatedlinks

Freefrom foods

Functional foods

PAGE67

1.Asdiscussedelsewhere,thiseliminatedenergydrinksandothercaffeinedeliveryproducts;Source:Sainsburys online(UK)[fairuse];Coriolis

EXAMPLES FUNCTIONALFOODS Thearenumberofmilestonefunctionalfoodsinthehistoryoftheconcept

Examplesofmajorhistoricalmilestonesinthedevelopmentofthefunctionalfoodsandbeveragessector
(18862010) Year 1886 Country UnitedStates Company EagleDrugand ChemicalCompany MortonSaltCo. YakultHonsha U.S.Government RedBullGmbH Product CocaCola What? SoftDrink Whatwasadded? Coca leaf(cocaine) Kolanuts(caffeine) Cochinealdye1 Iodine Lactobacilluscasei Nicotinicacid (niacin) Taurine Glucuronolactone Caffeine Bvitamins Dietaryfibre Lactobacilluscasei Plant sterolesters Comments/notes Inresponse toalcoholprohibitioninregion Alsovanilla,cinnamon,limeextract,nutmeg,etc. Topreventgoiter Topromoteguthealth FirmnowaUS$3.2bdairycompany VitaminB3into allbreadongovernmentorders duringwartime;rebrandedduetotobaccolink WesternisedversionofThaienergydrink,which wasitselfderivedfromJapaneseLipovitan (1962)

1924 1935 1943 1987

UnitedStates Japan UnitedStates Austria

MortonsSalt Yakult Allbread RedBull

Salt Drinkingyoghurt Bread Softdrink

1988 1994 1995

Japan France Finland

Otsuka Pharmaceuticals Danone Raiso

Fibe Mini Actimel Benecol

Softdrink Drinkingyoghurt Margarine

Worldsfirst functionalfood LaunchedinresponsetoarrivalofYakultinEurope 1.4binsales(06) Reducecholesterol FollowingstudypublishedinNEJOM2 Birds feeditselfmodifiedtoberichinOmega3 Asmuchresveratrolinonebarasyouwouldfindin 50glassesofredwine

1998 2010

U.K. UnitedStates

DeanFarms ResVes Inc.

Columbus HealthierEggs WineTime

Eggs Chocolate bar

Omega3fattyacids Resveratrol

PAGE68

1.FromCochineal insect;2.NewEnglandJournalofMedicine;Source:Coriolisfromvariouspublishedsources

INDUSTRYGROWTHINUSMARKET TakingtheUSmarketasanexample,wefindfunctionalfoodsarelargeandgrowing;howevergrowthis concentratedinahandfulofcategories;manyofwhichareregardedasjunkfood

InflationadjustedretailsalesoffunctionalfoodstoconsumersintheUSbycategory
(US$b;2002vs.2007) 5year CAGR $20.6 5.7% Wehypothesisethatfunctionalclaimsactasa guiltremoverfortheconsumer

$9.6 $20.6

Softdrinks

9.3%

Thisisprimarily energydrinkssuchasRedBull Wedonotclassifytheseasfunctionalfoodsinourresearchasthey areneitherhealthynoranymoreorlessfunctionalthanCocaCola

$6.1 Yoghurt/other dairy/spreads

$6.8 $5.2

5.4%

Thisisprimarily probioticyoghurtsanddrinkingyoghurtshots

$4.6 $3.5 $1.9 $0.6 $3.2 2002

PAGE69

Bakery,cereals&muesli 5.5% bars Confectionery Potatochips/ savoury snacks Allotherproducts 3.5% 2.5% 1.3%

Thisisprimarily mueslibarsandcerealwithaddedfunctional ingredients

$2.3 $0.5 $3.4 2007

Notethatthefunctionalconceptisnotmakinganytractionin aggregateacrossallotherproductssoldinasupermarket

Notalotofgrowthelsewhere

Source:PWCLeveragingGrowthintheemergingfunctionalfoodsindustry;USBureauofLabourStatistics(CPIF&Binflation);Coriolisanalysis

WHOWINS? AgainlookingattheUSmarketsuggeststhat,asageneralrule,thewinnersinfunctionalfoodsaretheexisting categoryleaderswhocanaddfunctionalasaflavour

EXAMPLE:KeyplayersinfunctionalfoodsintheUSmarketacrosskeycategories
(2011) ThisimpliesthatNewZealandwillactasaningredient supplierratherthanuseanynutraceuticalbreakthroughto buildastrong(functional)foodposition

Existingplayersaddfunctionalflavourtorange

Enthusiastic newmarketentrant leveragingfunctionalproperties togainsignificantshare Convenientandkeeps youawake.

Softdrinks

Yoghurt/otherdairy

Tastesgood, convenient,and focusesonone benefit;guthealth Nomajorsuccesses

Bakery, cereals& mueslibars

Confectionery

Nomajorsuccesses

Potatochips/savoury snacks

Nomajorsuccesses

PAGE70

Note:PepsiCoownsFritoLay(global#1potatochipcompany;ownerofBluebird)andQuaker(cerealandsnacks);KraftownsBalanceBarandarangeofotherbusinesses;General Millsowns50%ofYoplaitFranceandlicensesthebrandintheUS;Source:Coriolis

TABLEOFCONTENTS
Section Contents Glossaryofterms Methodology&datasources F&BIPOverview Definitions Summary&conclusions Nutraceuticals a. Global Situation 20 27 38 Page 4 5 6 7 10 15

b.NewZealandSituation c.Observations FunctionalFoods/FoodsforHealth a. Global Situation

64 71 75

b.NewZealandSituation Appendices

FUNCTIONALFOODSINNZ EXAMPLES ThesuccessfulfunctionalfoodscategoriesgloballyarethesuccessfulcategoriesinNewZealand;generally existingcategoryleadersarewinning(asisthecaseglobally)

EXAMPLES:SelectfunctionalfoodsavailableinNewZealandsupermarkets
(2011) Category ProbioticYogurt KeyFirms/brand GoodmanFielder/MeadowFresh(NZ) NationalFoods(AU)/Yoplait Fonterra/Anchor(NZ) GoodmanFielder/Activate(NZ) Yakult/Yakult GoodmanFielder/MeadowFresh(NZ) Fonterra Example PreBio Elivae Symbio ActivateBody BoostShots Yakult MeadowFreshPreBio Anlene Anmum PowderedYoghurt Spreads Westland/EasiYo (NZ) Unilever/Flora GoodmanFielder/Logicol GoodmanFielder/Goldn Canola(NZ?) Griffins/Nice&Natural(NZ?) EasiYo Bio FloraProactiv Logicol Goldn Canola Nice&NaturalSuperfruits (questionable asfunctional) SoGoodEssentials Functional Ingredients Prebiotics andprobiotics Probioticbacteria Claims Digestivehealth

Single servedairydrink

Probioticbacteria(Bifido Defensis) Vitamins& Minerals Inulin Calcium,vitaminD,magnesium, zincandprotein Foclate,Vit BsGangliosides (GA),SA,DHA*,EFAandIron. Probioticbacteria Plantsterols Plant sterols Omega3 Superfruits

Digestivehealth,immune support Digestivehealth Bone maintenance Nutritionforpregnantand breastfeedingMums DigestiveHealth Hearthealth

Milk

Bakery, cereals&muesli bars SoyMilk

Antioxidant

Sanitarium

Addediron,calcium, antioxidants,omega3 Manukahoney

General health

Honey

Airbourne (NZ) Hollands (NZ)

Airbourne ManukaUMF

Antibacterial

PAGE72

Source:Coriolisfromvariouspublishedsources

FUNCTIONALFOODSINNZ EXAMPLES OtherexamplesoffunctionalfoodsinNewZealandincludepetfood(likelythelargestfunctionalfoodcategoryin NZ)andTea(thoughteaisdebatableunderatightdefinitionoffunctionalfoods)

EXAMPLES:SelectfunctionalfoodsavailableinNewZealandsupermarkets
(2011) Category KeyFirms/brand Example Functional Ingredients Claims

PetFood

Champ GoldenBoy(NZ) Pedigree OptimumNutrition

ChampAdultHeartFormula GoldenBoyPerformance VariousPedigree DogFoods OptimumNutritionforLife

Omega3,Glucosamine&Multi vitamins Omega3,Antioxidantsand Glucosamine Omega3,Beet, Antioxidants, Prebiotics,Glucosamine FLUTD, Antioxidants,Optimum DentalDefense Various

Omega3: Heart Multivitamins&antioxidants: Generalhealth Glucosamine:Jointhealth Beetpulp&prebiotics: Digestivehealth FLUTD:Urinarytracthealth OptimumDentalDefense: Dentalhealth Immunesupport Moodimprovement GeneralHealth

Tea

Twinings Healtheries(NZ)

Twinings Echinacea& Raspberry Healtheries StJohnsWort & Berries HealtheriesGinsengTea& Blackcurrant&Vanilla HealtheriesChamomile& PeppermintwithSenna &Milk Thistle AppleCider drinkingvinegar

Beverages

GHO

Vinegar

Vitamins, minerals

PAGE73

Source:Coriolisfromvariouspublishedsources

MAJORMILKCOMPANIES ThelargestNZdairycompaniesareheavilyinvolvedinmilkbasednutraceuticals butprimarilyasaningredient toselltoothercompanies fewbrandedconsumersuccessestodate

EXAMPLES:Selectnutraceutical/functionalfoodactivitiesofleadingNewZealanddairycooperatives
(2011)

Ingredients Calcium, vitaminD,magnesium,zincandprotein VitaminB1,B2,B3,B12,Folate,Calcium,Iron, GA, SA,&EFA Specialtyprobioticingredientsupplier Lactoferrin Colostrum Largerangeofingredients inthetestingphaseor soononoffer Lactoferrin Glycomacropeptide Lactoperoxidase Caseinpeptones Lactoferrin

Consumerfunctionalfoodproducts Anlene (bonehealth) Anmum forbaby/childs braindevelopment AnchorSymbio Yoghurt(probioticyoghurt) Stolle MilkPowder(antibodyrichmilk) reCharge IceCream(toreduceeffectsofchemotherapy,testingstages) Col+colostrumsingleservedrink(JVwithNewImageGroup)

None

Immuprime nutritionalpowder Nutriprime nutritionalpowder PurchasedEasiYo (someflavourscontainprobiotics,BioLife range)

PAGE74

Source:variouspublishedarticles;variouscompanywebsites;Coriolisanalysis

TABLEOFCONTENTS
Section Contents Glossaryofterms Methodology&datasources F&BIPOverview Definitions Summary&conclusions Nutraceuticals a. Global Situation 20 27 38 Page 4 5 6 7 10 15

b.NewZealandSituation c.Observations FunctionalFoods/FoodsforHealth a. Global Situation

64 71 75

b.NewZealandSituation Appendices

TABLEOFCONTENTS
Appendix Appendix1 ProfilesofNaturalproductscompanies Appendix2 Product Profiles Appendix3 Nutraceuticalsfrommilk Appendix4 Sourcesoffirms Appendix5 Exclusions Page 76 96 103 111 121

NUTRACEUTICALS FIRMS MARKETINGFOCUS ThereareagroupoflargermarketingfocusednutraceuticalfirmsinNewZealand

NewZealandnutraceuticalsfirms marketingfocus large
(2010orasavailable)
Turnover Marketingfocus $168m (2010) $82m (2010) 90%+ (ws) 400 (K) 40 (K) Privateequity; AU (NextCapital) NewZealand; Listed (NZX:NEW) 1904 www.vitaco.co.nzwww.healtheries.co.nz Firmhasorigininstone groundflourmill Supplements,nutritional,sports, contract mnfg.,other www.newimageasia.com www.newimagegroup.co.nz Multilevelmarketerofcolostrum/othersupplements Contractpacks; buildinginfantformulaplant www.integria.com FormerlyThompson Group 143brands www.redseal.co.nz %Export Employees Ownership Year founded Notes

1984

$30m (2010) $28m (Ke) $11m(02) $18.5m (Ke) $9m (Ke) $9m (Ke) $23.3m (2010) $7m (Ke)
PAGE77

100 (K) 15% (C) 100 (K) 65 (K) 30 (K) 30 (K) 10 (K) 25 (K)

NewZealand;private (ToddCorporation) NewZealand;private (Hilke family) NewZealand;private (Blanchardfamily) NZ/AU;Private (WarrenStewart) New Zealand;private (Purchase andRossfamilies) Singapore; listed (SING:5FR) NewZealand; private (Edmondsfamily)

1951

1923

1987

www.goodhealth.co.nz Completerangeofsupplements www.nznutritionals.co.nz AlsoVitaFit,Prolife,Morlife;plant inCHC;contractpacks forothers www.lifestream.co.nz Widerangeofsupplements www.horleys.com;www.etikaintl.com Was Fonterra;nowEitka (Singapore) http://www.healthandherbs.co.nz/ Multiplebrands:Radiance,NaturesWay,etc.

1980

1994

1980 1989

Source:variouscompanyannualreports;variouscompanywebsites;Kompass;interviews;Coriolisanalysisandestimates

NUTRACEUTICALS FIRMS MARKETINGFOCUS Thereisalsoagroupofmidsizeandsmallerfirmswithamarketingfocus

NewZealandnutraceuticalsfirms marketingfocus medium
(2010orasavailable)
Turnover Marketingfocus $5m (Ke) $141m (2009) 9 (K) 450 (K) NewZealand;private (Fahy,Torok) NewZealand;private (Douglasfamily) 1979 www.naturessunshine.co.nz http://natsun.co.nz;www.nspwholesale.co.nz Multilevelmarketerofsupplements www.clinicians.co.nz AcquiredJune2008(wasNaturalHealthLaboratories) WhileDouglasislarge,itisamidsizeplayerinsupplements www.xtendlife.com www.naturalproductsnz.co.nz Supplements;manufacturer;contractpacks www.phytomed.co.nz www.creativeenergy.co.nz;www.naturopharm.co.nz Parent isHealthDistributors Supplementsandhomeopathicremedies www.evergreennz.com Deer blood/velvet,marineproduct;exporttoAsia www.deepbluehealth.co.nz Marketerofbee,deer, etc.;productpackedbyGMP www.naturies.co.nz Doxcon Pharmaceuticals MostlyexporttoChina;packedbyothers(?) %Export Employees Ownership Year founded Notes

1967 1997

$3m (Ke) $2m (Ke) $2m (Ce) $2m (Ke) N/A $0.4m (Ce)

20

NewZealand;private (Matthews family) NewZealand;private (Rasmussenfamily) NewZealand;private (Chu; Looi; others) NewZealand;private (Leefamily) NewZealand;private (Lawtonfamily; others) NewZealand;private (Huanf &Lufamilies)

2000

13 (K) N/A

1998 1996

13 (K) N/A N/A

1993 2004 2010

Invita NZLtd.

$1.25m (Ce)

14 (K)

NewZealand;private (De Bryn,Johnson,Vallant, Grant; others)

1989

www.invita.co.nz imports,marketsanddistributesfoodandlifescience ingredients

PAGE78

Source:variouscompanyannualreports;variouscompanywebsites;Kompass;interviews;Coriolisanalysisandestimates

NUTRACEUTICALS FIRMS MARKETINGFOCUS Wealsoidentifiedarangeofsmallermarketingfocusedfirms

NewZealandnutraceuticalsfirms marketingfocus small
(2010orasavailable)
Turnover Marketingfocus ~$5m(ws) N/A N/A 1150 N/A N/A Struckoff NZ;private (Criglington; Coleman) NZ;private (Clair, Dunkel,McMahon; others) NZ;private (Elliott andDonovan) NZ; private (Middleton,Bartlett,Low; others) NZ; private (Davisfamily) NZ;private (Renner;Driscoll;King;others) NZ;private (Huangfamily) NZ;private (North&Haines families) NZ;private (Banno;Missen) Struck off 2008 1988 2010 N/A 1983 1990 www.immuno.co.nz Colostrum,cosmetics, etc. www.mierslabs.co.nz;www.nojetlag.com Homeopathic remedies www.artemis.co.nz %Export Employees Ownership Year founded Notes

N/A

2008

UltimateNaturalHealthLtd www.iconherb.com www.detoxontv.com Online andphonesalesonly www.naturesourcedirect.com Barleygrass, colostrum,manuka oilmarketers www.nutressence.co.nz Nutritional supplementforhorses,nowpeople www.gohealthynz.co.nz www.homecarenz.com Rangeofproducts(supplements,colostrum,baby food) www.nzhealthfood.com Retailshopwithcontractpacked brands www.nznewparadise.co.nz

N/A

N/A

2002

N/A $0.45m (Ce) N/A $2.5m (Ce) $0.5m (Ce) $1.5m (Ce)
PAGE79

N/A N/A N/A N/A N/A

2005

N/A

1996

www.skybright.co.nz Colloidalsilver;other products

Source:variouscompanyannualreports;variouscompanywebsites;Kompass;interviews;Coriolisanalysisandestimates

NUTRACEUTICALS FIRMS MARKETINGFOCUS Wealsoidentifiedarangeofsmallermarketingfocusedfirms

NewZealandnutraceuticalsfirms marketingfocus small
(2010orasavailable)
Turnover Marketingfocus N/A N/A NewZealand;private (Hartstone family) 1996 www.jagulana.co.nz [website down] amazingadaptogenic herb Firmhas historicallyhadothernames(GMH,etc.) USfirmhasreceived warningletterfromUSFDAonproduct http://malcolmharker.co.nz/ Naturopathicandherbalremedies www.miadasport.com Weightliftingsportsnutrition www.nzbotanicals.com Herbalproductsforpeople andanimals 2003 2001 www.nutranz.co.nz Omega3 andGlucosamine www.nzhealthnaturally.com Rangeofsupplements andUMFhoney %Export Employees Ownership Year founded Notes

N/A N/A N/A

N/A N/A N/A

Inliquidation NewZealand;private (Shepherd;others) NewZealand;private (Brewer) NewZealand;private (Chandler family) NewZealand;private (McConnachie;others)

1981 1999

$0.15m (Ce) $0.5m (Ce)

N/A N/A

PAGE80

Source:variouscompanyannualreports;variouscompanywebsites;Kompass;interviews;Coriolisanalysisandestimates

NUTRACEUTICALS FIRMS MANUFACTURINGFOCUS Thereareanumberoflargenutraceuticalfirmsfocusedprimarilyonmanufacturing,eitherrawingredientsora contractpackedfinalproducts

NewZealandnutraceuticalsfirms manufacturingfocus large
(2010orasavailable)
Turnover Manufacturingfocus $85m (Ke) $50100m(ws) $40m (C;10) 150+(ws) 150 (K) 150 (Ci) NewZealand;private (Shimfamily) NewZealand;private (Yefamily) n/a www.alphalabs.co.nz contractmanufacturerofdietarysupplements www.gmp.com.au FactoryinNZandAU;pharmacyandmilkpowder;officesin HKandBeijing;retailstoresinChina Mnfg.rangeof products;OnestopOEMservice www.nzp.co.nz Pharma ingredientsanddietarysupplements Originally ownedbymeatindustryconsortium www.unitech.co.nz;www.proactive.net.nz Contractmanufacturer;alsomarketsunderProActive brand www.tauraurc.com Factoriesin NZ&UK www.nutrizeal.com contractfreezedryingandhardgelencapsulation ParentisNutriventures www.alaron.co.nz GMPcertified/TGAlicensedcontractandprivatelabel manufacturerofdietarysupplements,complementary medicines,nutraceuticals,vitaminsandmineralsinhard shellcapsule,tablet,powerblendandsachetformats. www.waitakibio.com www.pharmazen.co.nz Nutritionalsupplementsingredients Waitaki Meatspinoffto addvaluetocoproducts1970 %Export Employees Ownership Year founded Notes

2002

$30m (K;03) $23m (Ke) $27m (10) $1015 (Ci) $9m (Ke)

103 (K) 80 (K) 52 (K) 45 (Ci) 30 (WS)

NewZealand;Privateequity (Pohutukawa;Direct; Biopacific;others) NewZealand;private (Hanham family) Australia;privateequity (CHAMP) NewZealand;private (Miller; others) NewZealand;private (Smith; Geiger;others)

1971

1970

1978

1995

1993

$5.2m (2009)

22 (K)

NZ;listed (Unlisted)

1970/ 1984

PAGE81

Source:variouscompanyannualreports;variouscompanywebsites;Kompass;interviews;Coriolisanalysisandestimates

NUTRACEUTICALS FIRMS MANUFACTURINGFOCUS Weidentifiedarangeofsmallermanufacturingfocusedfirms

NewZealandnutraceuticalsfirms manufacturingfocus midsize/small
(2010orasavailable)
Turnover Manufacturingfocus GenesisBiolab $2m (Ke) 11 (K) NewZealand;private (Keeley family;others) 1996 www.seadragon.co.nz;http://www.bioproducts.co.nz www.seadragon.co.nz/Default.asp?Page=38 ParentisMerinova; fishoilbulkextraction;deer velvet June2004managementbuyoutofAgResearch subsidiary responsiblefordeervelvetextracts www.genesisbiolab.co.nz Extractionandfreezedrying fruitandotherextracts www.rmfnutraceuticals.co.nz www.nutraceuticals.co.nz Sourcingingredientsfirm(notmanufacturer) 2warehouses(Christchurch&Sydney) www.extractsnz.co.nz RenamedKiwiExtractsLtd Coldextraction;ethanolextraction;freezedrying; Propolis www.claridges.co.nz WholesaleNZingredientsandmanufacturesome HaveopenedmarketingofficeinChina http://ubbio.com Manufacturer andexporter;branchinSouthKorea FormerlyNationalDeerHorn www.marketnz.co.nz;www.herbenz.com PatentedEchinaceaJuiceExtract;alsodeervelvet,etc. Onlineshopfront;someproductscontractpackedbyothers www.o2bhealthy.co.nz CMSLtd Contract manufacturingofSupplementsLtd Ownbrando2b,manufacture200productsinNelson Developingowneroperated retailstoresinNZ %Export Employees Ownership Year founded Notes

$1m (Ke) $2m (Ce)

6 (K) N/A

NewZealand; private (Parsonsfamily) NewZealand; private (Hardie family)

1995 1996

$0.5m (Ce) N/A

N/A

NewZealand Comvita100% NewZealand; private (Heathfamily;others) NewZealand;private (Leefamily) NewZealand;private (Green family) NewZealand;private (Symns, Johnson,Buckett)

1990

N/A

Over20 yearsago 1988

N/A

N/A

N/A

N/A

1992

N/A

N/A

2003

PAGE82

Source:variouscompanyannualreports;variouscompanywebsites;Kompass;interviews;Coriolisanalysisandestimates

NUTRACEUTICALS FIRMS IPFOCUS ThereareahandfuloffirmsinnutraceuticalswithastrongIPfocus

NewZealandnutraceuticalsfirms IPfocus
(2010orasavailable)
Turnover IPfocus $1.9m 10 NewZealand;listed (NZX:BLT) NewZealand;private (Skeggs; Alloo;Wilson;others) NewZealand; mixed (Claycomb;Bragger;NZVIF; others) NewZealand;mixed (Davey,Elliot;NZVIF; others) UnitedKingdom;N/A 2000 www.blis.co.nz %Export Employees Ownership Year founded Notes

Seperex Nutritionals

$812m (Ce) $0.5m (Ce) $0.3m (Ce) $0.1m (2009) $0.35m (Ce) N/A

8+

2004

www.seperex.co.nz BasedinDunedin; officesandlabinHongKong Bioactivemarineextracts BioLexBioLexLPlus www.quantec.co.nz Technology basedonimmuneenhancingpropertiesofa novelmilkfraction www.somnaceutics.com patentednaturalsleepenhancingmilkproduct Asian distributiondealwithNewImage www.supremebiotech.com Astaxanthin productsfromouruniquestrainofalgae (Haematococcus pluvialis) www.anagenix.com OrigininOtago Universityresearch ResearchingJVwithTrinityBioactives researchgroup www.encoate.com Proprietary,costeffective,foodgradebiopolymer technologies

N/A

N/A

N/A

2007

N/A

2007

N/A

NewZealand;private (Johnson andWashington Smith) NewZealand;privateequity (Biopacific;others) NewZealand;mixed (Cavom, ENZO;NVIF;others) NewZealand;mixed (S. Tindall;Geiringer;NVIF; others)

2008

N/A

N/A

N/A

2005(?)

www.migco.com Pinebarkextract www.photonzcorp.com Omega3fattyacideicosapentaenoic acid(EPA)frommarine microalgae;recent$2.9mfromFRST

N/A

N/A

2002

PAGE83

Source:variouscompanyannualreports;variouscompanywebsites;Kompass;interviews;Coriolisanalysisandestimates

NUTRACEUTICALS FIRMS IPFOCUS continued

NewZealandnutraceuticalsfirms IPfocus
(2010orasavailable)
Turnover IPfocus N/A N/A NZ;mixed (~60%SpeirsGroup) 2006 www.speirsnutritionals.co.nz Recentlysoldmicroencapsulationof omega3fishoilstoUK Co.(initialpaymentofNZ$2.1m) JVbetweenSpeirsGroupLtd,MasseyUniversity,TheRiddet InstituteandTheBioCommerceCentre Speirs Groupreported$1.7mrelatedstartupcostsin2010 %Export Employees Ownership Year founded Notes

PAGE84

Source:variouscompanyannualreports;variouscompanywebsites;Kompass;interviews;Coriolisanalysisandestimates

NUTRACEUTICALS FIRMS SINGLEPRODUCTFOCUS InNewZealanddairycoopssupplylactoferrin andcolostrum,asdotwosmallerfirms

KeyfirmsintheNewZealandsector
(2010orasavailable)
Turnover Dairy $16,726m (2010) 90%(C) 20,000(K) NZ;cooperative 2001 www.fonterra.com Lactoferrins andcolostrum;probiotics %Export Employees Ownership Year founded Notes

$421.6m (2010) $166.4m (2010) $25m(specialty) N/A

80%(C)

350(K) EY:40

NZ;cooperative

1937

www.westland.co.nz Lactoferrins andcolostrum www.easiyo.com www.tatua.com Lactoferrins Proteinhydrolysates www.synlaitmilk.com HavecolostrumandLipidex (betaserumpowder) www.a2corporation.com Milkusingselectedstrainofcowthatproducesmilkprotein variant www.zestlife.com Liquidcolostrum www.purenzcolostrum.com Colostrumpowder www.immunecare.co.nz ParentisWinning TeamLimited www.theyoghurtcapsule.co.nz Encapsulatedyoghurt;primarilydirectsales (?)

95%+

180(K)

NZ;cooperative

1914

90%+

China/Japan/NZ (51%BrightDairy;Mitsui7%; others) NZ; listed (NZAX:ATM N/A NewZealand;private (Nixon;Parry) NewZealand;private (Lockfamily) NewZealand;private (Wootten family) NewZealand;private

2000

$0.2m (2010) Zestlife N/A

2000

2005

$1m (Ke) N/A $0.8m (Ke)

PAGE85

4 (K) N/A 3 (K)

2001

2001 1988

Source:variouscompanyannualreports;variouscompanywebsites;Kompass;interviews;Coriolisanalysisandestimates

NUTRACEUTICALS FIRMS SINGLEPRODUCTFOCUS Thereawiderangeoffirmswithasingleproductfocus

KeyfirmsintheNewZealandsector
(2010orasavailable)
Turnover Meatbyproducts $1m (K) $1m (Ke) $2m (K;02) $1.75m (Ce) $0.5m (Ce) N/A N/A N/A 8 (K) 4(K) 2 (K) N/A NewZealand;private (Bellaney family) NewZealand;private (Morleyfamily;others) NewZealand;private (Gloriavale Christian community) New Zealand;private (Thomsenfamily) NewZealand;private (Canefamily) NewZealand;private (Ho family) NewZealand;private (Carline family;others) N/A www.silberhorn.co.nz Deer velvet www.deer.co.nz;www.cervidor.co.nz Deervelvet; deerproducts;deerenrichedmanuka honey www.gfmpro.co.nz Deer velvet;parentisBioceuticals Ltd. www.mountainred.co.nz Deervelvet;GLmusselextract www.purevitalitynz.com Parent(PetfoodNZ inreceivership;newowners) www.gevir.co.nz www.canesdeervelvet.com www.nzsupremedeer.com Processandexportawiderangeofdeerproducts %Export Employees Ownership Year founded Notes

1993 1988 2002

N/A

2005/ 2011 1992 1998 1996

N/A N/A N/A

PAGE86

Source:variouscompanyannualreports;variouscompanywebsites;Kompass;interviews;Coriolisanalysisandestimates

NUTRACEUTICALS FIRMS SINGLEPRODUCTFOCUS Thereawiderangeoffirmswithasingleproductfocus

KeyfirmsintheNewZealandsector
(2010orasavailable)
Turnover Meatbyproducts $1.4m (Ke) MeatBiologics Research N/A 610 (K) N/A NewZealand;private (Payne family) NewZealand;government (20% MasseyUni;20%IRL;20% AgResearch;20%B+LNZ;20% MeatInd.Assn.) 1998 www.agrilab.com Animalorgans,glands, etc.primarilyChinesemedicine Establishedin2002.Itistheoneofthefirstfiveconsortiaset upunderaFoundationofResearch,Science&Technology (FRST)initiative.Itsmissionistodevelopnovel nutraceuticals,functionalfoodsandhealthsupplements fromredmeatorredmeatcoproducts(collectivelytermed "meatbioactives").Thesebioactives aretargetedforuseby humansforgeneralhealth&wellbeingpurposes. %Export Employees Ownership Year founded Notes

2002

PAGE87

Source:variouscompanyannualreports;variouscompanywebsites;Kompass;interviews;Coriolisanalysisandestimates

NUTRACEUTICALS FIRMS SINGLEPRODUCTFOCUS continued

KeyfirmsintheNewZealandsector
(2010orasavailable)
Turnover Seafood Aroma(NZ) $510m (K;02) $10$15 (Ci) Aotea Pacific $1m (Ke) $0.8m (Ke) N/A 15 (K) N/A 610 NewZealand;private (Winters family;others) NewZealand;private (Broadbentfamily) NewZealand;private (Takahasi family;others) NewZealand;private (Robinson family) NewZealand;private (Worthington;Bishop) NewZealand;private (Dorst; Clement) NewZealand;private (Erickson;Reid) NewZealand; private (Ryan) 1961 www.aromanz.com GLmusseland sharkextracts Manufactureoffreezedriedmarinenutraceuticals www.maclab.net;www.lyprinol.com/index.php/history Freezedryingmussels;purposebuiltfactory www.aoteapacific.co.nz Sharkextracts www.hubrisintl.com Musselextractandglucosamine www.naturalhealthnz.net.nz; www.mobicosa.com; www.kalsio.com; www.technyflex.com; www.kalsytech.com GLmusselextract;fishbonecalciumsupplements www.enzaq.com Greenlipmusselextract rimu.orconhosting.net.nz/herbmark/eco_logic.html Manufactureseaweedextract;alsogrowherbs Nowebsite(?) Related firmBiomarine Laboratoriesintoliquidation 2008 %Export Employees Ownership Year founded Notes

1973 1996

HubrisInternational

3 (K) N/A

1999

2003

EnZaq Aquaculture

N/A

N/A

1985

N/A Maxamena Nutriceuticals N/A

N/A N/A

2003

PAGE88

Source:variouscompanyannualreports;variouscompanywebsites;Kompass;interviews;Coriolisanalysisandestimates

NUTRACEUTICALS FIRMS SINGLEPRODUCTFOCUS continued

KeyfirmsintheNewZealandsector
(2010orasavailable)
Turnover Honey/Beeproducts $85m (2010) $15m (K;06) 59% (K) 1431 NewZealand; Listed (NZX:CVT) NewZealand;private (Watsonfamily;Daniell family) 1974 www.comvita.com Manukahoney;widerangeofotherproducts www.watsonandson.co.nz www.manukamed.com 15,000beehives www.manukahealth.co.nz Honeyproducts inmedifoods, cosmecueticals, 70productsin40markets www.aratakihoneyhb.co.nz %Export Employees Ownership Year founded Notes

10 (K)

2003

$15m

90%

40

NewZealand;private (numerous) NZ; private (Berryfamily;others) NZ;cooperative (80100beekeepers)

2006

$510m(K)

40

1944

NZHoney Company

$10.8m (2010)

N/A

1950s /1981

www.nzhoney.co.nz NewZealandHoneyProducersCooperative tookovertheassetsoftheHoneyMarketingAuthority Hollands; 3Bees;SweetMeadow;Hororata www.newzealandhoneyco.co.nz Honeyproducts;parentisAlpineHoney www.airborne.co.nz Regular,manuka,active manuka,andhoneylozenges www.honeynz.co.nz www.beesonline.co.nz Honey www.mossopshoney.co.nz Widerange ofhoneyproducts

$5m (npa;09) HoneyNewZealand (International) $3m (Ke) $3m (Ke) $3m (Ke)
PAGE89

90%

N/A 25 20 (K) 20 (K)

NewZealand;private (Wardfamily) NewZealand;private (Brayfamily) NewZealand;private (Pringlefamily) NewZealand;private (Mossop family)

2005 1910 2003

1952

1.Includesinternationalemployees;Source:variouscompanyannualreports;variouscompanywebsites;Kompass;interviews;Coriolisanalysisandestimates

NUTRACEUTICALS FIRMS SINGLEPRODUCTFOCUS continued

KeyfirmsintheNewZealandsector
(2010orasavailable)
Turnover Honey/Beeproducts $3m (Ke) NelsonHoney &Marketing $2.4m (Ke) $2m (Ke) $1m (Ke) $2m (Ke) DavidsonsApiaries $1m (Ke) $1m (Ke) $1m (Ke) $3m (Ke) $2m (Ke) $1m (Ke)
PAGE90

%Export

Employees

Ownership

Year founded

Notes

15 (K) 14 (K) 10 (K) 10 (K) 10 (K) 8 (K) 7 (K) 7 (K) 6 (K) 5(K) 3,500hives 4(K) NewZealand;private (Davidsonfamily) NewZealand;private (Lipscombe family) NewZealand;private (Cropp family)

1947 1972 1995

www.packagebees.co.nz www.nectarease.co.nz Honey;beeproducts www.purenewzealandhoney.com Manuka honey,activemanuka;otherhoneys www.happyvalley.co.nz;www.happyvalleyhoney.com.hk Honeyandbee products www.honeylands.co.nz www.beewild.co.nz www.haddrells.co.nz;CambridgeBeeProducts Beeproducts;UMFhoney(GoldenHillsbrand) www.waitematahoney.co.nz Honey,UMFHoney www.beehealthy.co.nz;www.ecroyd.com/ Honey;manuka honey;beeproducts www.waitakihoney.co.nz www.manukahoney.co.nz/ Manukahoney;UMFhoney

1976 1995 1945 1993 1960

1991

1940 1976

Source:variouscompanyannualreports;variouscompanywebsites;Kompass;interviews;Coriolisanalysisandestimates

NUTRACEUTICALS FIRMS SINGLEPRODUCTFOCUS continued

KeyfirmsintheNewZealandsector
(2010orasavailable)
Turnover Honey/Beeproducts APIHealth N/A $1.5m (Ce) N/A N/A $1m (Ke) $0.7m $0.3m (Ke) 3 (K) 15(K) N/A N/A N/A NewZealand;private (Nikolaeva family) NewZealand;private (DarrenClifford) NewZealand;private (William Gluyas) NewZealand;private (Bickerstaff andWheeler) NewZealand;private (Pohio family) NewZealand;private (Clarke family) NewZealand;private (Walkerfamily) NewZealand;private (Dalefamily) NewZealand;private (Cook family;Goodmanfamily) 1998 2006 1990 1997 2000 www.apihealth.com Beevenom;beeproducts www.thehoneycompany.co.nz www.manu.co.nz Manukaproducts;honey www.honeybalm.com Bee productbasedsupplements www.naturescountrygold.co.nz Honey; ManukaBoosta honeybasedenergybars www.autumnvalleyhoney.co.nz www.honeyland.co.nz www.strathdalehoney.com Cloverhoney;biogro organiccertified;C.Otago www.naturebee.com Potentiatedpollen;beevenom;AMFmanuka honey %Export Employees Ownership Year founded Notes

2(K) 1 (K) 1,200hives

2003 1986 1959 1997/ 2000

N/A

N/A

PAGE91

Source:variouscompanyannualreports;variouscompanywebsites;Kompass;interviews;Coriolisanalysisandestimates

NUTRACEUTICALS FIRMS SINGLEPRODUCTFOCUS continued

KeyfirmsintheNewZealandsector
(2010orasavailable)
Turnover Honey/Beeproducts Otago HoneyProducts MilburnApiaries AlpineHoneySpecialties CellLimited(Formerly CellularImprovements) Zeal Extracts $1m(Ke) $1m(Ke) $1m(Ke) N/A N/A 3(K) 3(K) 7(K) N/A N?A NewZealand;private (Sales, Farhi,Walker,McCaw) NewZealand;private (Walker,McCawfamilies) NewZealand;private (Wardfamily) NewZealand;private (Donnellyfamily) NewZealand;private (Butler) 1991 1970 1981 1999 1998 Nowebsitelocated Nowebsitelocated Part owns,Otago HoneyProducts Nowebsitelocated %Export Employees Ownership Year founded Notes

http://yhst56964562438721.stores.yahoo.net/ Potentiatedpollen Websitesdown;ActiveZealax UMFhoney

PAGE92

Source:variouscompanyannualreports;variouscompanywebsites;Kompass;interviews;Coriolisanalysisandestimates

NUTRACEUTICALS FIRMS SINGLEPRODUCTFOCUS continued

KeyfirmsintheNewZealandsector
(2010orasavailable)
Turnover Produce/plantbased $7m (Ke) 25(K) Bahamas/NZ (BioPacific;Seeka Kiwifruit; others) 1991 www.vitalfoods.co.nz FoundedbyformerAgScientist;developedkiwifruitpowder Clinicaltrials;launchedPhloe HealthyBowel Attracted venturecapitalinvestment NestleHealthSciencestrategicinvestor www.biovittoria.com Monkfruitnaturalsweetener basedWaikatoInnovation TateandLyleinvestmentforglobaldistributionandsales www.nzextracts.co.nz Winegrape(andother fruit)extracts OxifendVinanza ParentisMudHouseWine www.justtheberries.com Blackcurrantextractpowder www.midlands.co.nz www.osel.co.nz Primarily seeds/other;oilseedextractionbusiness www.fwf.co.nz;www.waihibush.co.nz Flaxseedoil %Export Employees Ownership Year founded Notes

Biovittoria

$3m (K; 09) $1m (Ci) N/A N/A

n/a

New Zealand/other (Variousincl.Tate&LyleUK) NewZealand;listed (subsidiaryofMudHouseWine Group) NewZealand;private equity (NZP69%;others) NewZealand;private (Green family;others)

NA

2004

N/A N/A

2003 1997

$15m (K)

20 (K)

NewZealand;private (Musgrave family;others)

1992

$1m (Ke) N/A

4 (K) N/A

NewZealand;private (Prebble family;others) NewZealand;charity (Disability trainingservices)

1989

www.biooils.co.nz Flax seedoil www.ginkgo.co.nz Nature GreenNZLtd GrowingginkgoinNewZealand

2003

PAGE93

Source:variouscompanyannualreports;variouscompanywebsites;Kompass;interviews;Coriolisanalysisandestimates

NUTRACEUTICALS FIRMS SINGLEPRODUCTFOCUS continued

KeyfirmsintheNewZealandsector
(2010orasavailable)
Turnover BarleyGrass GoGreen N/A N/A 2002 www.gogreen.net.nz http://evolutionaryhealth.org Wheatgrass,spirulina and barleygrassmanufacturers www.naturesgreenz.com Manufacture andonline market barley/wheatgrassandfish oilsourcedfromNZ www.greensforlife.co.nz Barley grasspowder %Export Employees Ownership Year founded Notes

Natures Greenz

N/A

N/A

2002

N/A

N/A

2001

PAGE94

Source:variouscompanyannualreports;variouscompanywebsites;Kompass;interviews;Coriolisanalysisandestimates

NUTRACEUTICALS FIRMS SINGLEPRODUCTFOCUS continued

KeyfirmsintheNewZealandsector
(2010orasavailable)
Turnover Forestry $2m (Ke) 10 (K) NewZealand;private (Giles family) 1998 www.enzo.co.nz Pinebarkextract Firm isEnzo Nutraceuticals;parentProteinVentures ShareholderinMigco [listed elsewhere] %Export Employees Ownership Year founded Notes

NZuniqueflora Mende Biotech $0.8m (Ke) N/A 3 (K) N/A NewZealand;private (Hueber family;Mende family) NewZealand;private (Hueber family) NewZealand;private (Butler family) NewZealand;private (Kerr;Te AtaRaTapumahi Trust;others) 1999 www.totarol.com Totara tree extract www.essentiallynz.com Totarol marketer;partownedbyMende www.forestherbs.co.nz Horopito http://www.manukaoil.com Manuka treeoil

2001

N/A

N/A

Tairawhiti Pharmaceuticals

N/A

N/A

PAGE95

Source:variouscompanyannualreports;variouscompanywebsites;Kompass;interviews;Coriolisanalysisandestimates

TABLEOFCONTENTS
Appendix Appendix1 ProfilesofNaturalproductscompanies Appendix2 Product Profiles Appendix3 Nutraceuticalsfrommilk Appendix4 Sourcesoffirms Appendix5 Exclusions Page 76 96 103 111 121

APPENDIX2 PRODUCTPROFILES Thisappendixanalysessevenkeyproductsinthenutraceuticals categorythatplayonNewZealandsstrengths

Keyfunction

Overall

Levelofscientific credibilityor support

Amount of research conducted

Industryhealth

DefensibletoNZ

ManukaHoney

Antibacterial

 * * 5

? ? 5 

5 ? 5

  ? 5 

  ?

See Appendix2

Greenlippedmussel extract Lactoferrin

Antiinflammatory

Antibacterial Immunomodulation Immunehealth

Colostrum

Kiwifruitextract

Digestive health

Deervelvet

Sexualhealth

PAGE97

Note:Excludesfishoil

PRODUCTPROFILE MANUKA HONEY Manukahoneyisvalidatedinwoundhealingandisapprovedforhospitaluse

Publications(ManukaHoney) FirstPublicationon Health Effects: 1988 inNZ

Delivery Mechanism Raw honeyasafood Honeysupplementswithroyaljelly/propolis/pollen added Addedtowounddressings Combinedintoagelforwoundtreatment

CompetingProducts Natural: Totarol,oreganooil Otherhoneys Probiotics Tea treeoil,eucalyptus ConventionalMedicine: Antibiotics Topical creams Revamil Honey ResearchState

TotalPaperson Activity andHealthFunction: Diseases/Activities Studied:

37 Antibacterial: 25 Wounddressing:23 Toothdecay:2 Gutinflammation:2 Asthma:2 Immunity:1 Angiogenesis:1 Antifungal:1 UK:16 NZ:14 Ireland:6 Canada:4 USA:3 India:3 France:1 Poland:1 Slovakia:1 Portugal:1 Italy:1 Germany:1 Australia:1

ActiveIngredients Methylgloxal Low pH Otherunknownfactors

History Honeyhasbeenusedtotreatwoundsformillennia.In 1988,DrPeterMolans labat theUniversityofWaikato discoveredmanuka honeyhadantibacterialproperties. Manukahoneywaslatershowntohaveadistinct bactericidalactivityfromotherhoneyandwaseffective inwoundtreatment.ItisnowcollectedwidelyinNZand certified foruseinhospitalwoundcare.

CountryofPrimary Author:

Antibacterial/Wound Dressing: Verywellresearched,convincingevidence,proven Soontobeusedaspartofhospital woundcareinseveral countries FDAapprovedproduct Other: Otherusesarespinofffromantibacterialcare(i.e. toothcare)orareonlyattheinitialphaseofresearch Difficulttojudgepromiseofresearchintotheseareas NZResearchCentres

Patents/IP/NZspecificadvantages Proprietaryblendofmanuka honeystested(forinstance Comvita) Patentsonextraction/isolation activeingredientand woundgeltechnology(boughtfromWaikatoLink) ManukahoneyprimarilyNZ,alsoAustralia

WaikatoHoneyResearchUnit(UniversityofWaikato) UniversityofWaikato PlantandFoodReserach

PAGE98

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PRODUCTPROFILE GREENLIPPEDMUSSELEXTRACT Greenlippedmusselextractisusedfortreatmentofinflammation

Publications(GreenLippedMussel) FirstPublicationon Health Effects: 1980inAustralia??

Delivery Mechanism Takenasanoralsupplement

CompetingProducts Natural: Curcumin Fish oil,flaxseedoil Glucosamine,chondroitin,MSM Sharkcartilage Boswellia (plant)extract,rosehipoil

TotalPaperson Activity andHealthFunction:

38

ConventionalMedicine: NSAIDs TNF inhibitors

Diseases/Activities Studied: CountryofPrimary Author(after1990):

Arthritis/antiinflammatory:35 Inflammatory boweldisease:1 Cancer:1 Australia: 9 USA:7 UK:6 NZ:3 China:1 Finland:1 Canada:1 SouthKorea:1 Russia:1 Japan:1

ActiveIngredients Liprinolisanextractcontaining multiple compounds Omega3Oils Mucopolysaccharides ChondroitinSulphate Betain History Research inthe1970sonanimalextractsshowedgreen lippedmusselshavehighlevelsofomega3oiland mucopolysaccharides.Duringthe1980sextraction methodsweredevelopedtoretainbioactivity.Several studieshavebeenconductedonhealthbenefitsof greenlippedmusselextract,primarilyinAustralia.Cold extractionofBioLanepreservesactivecompounds Patents/IP/NZspecificadvantages Extractionprocessispatented(Liprinol) Greenlipped musselprimarilygrowninNZ?,couldbe growninaquacultureelsewhere

ResearchState Of5animalstudiesongreenlipped musselextracton arthritis,2showedmoderatebenefit Fewsideeffects Notofficiallyapprovedfortreatmentofdisease

NZResearchCentres None

PAGE99

BasedonsearchusingPubMed,excludeschemical/processing/foodjournals

PRODUCTPROFILE COLOSTRUM Colostrumhasalonghistoryinneonatalhealthbuthasonlyrecentlyemergedasahealthsupplementforadults

Publications(BovineColostrumSupplement) FirstPublicationon Health Effects: 19701980s

Delivery Mechanism Capsuleofdriedcolostrum Colostrumfortifiednutritiondrinks

CompetingProducts Natural: SportsPerformance:Amino acids,kombucha tea,devils claw,ginger,brownricesyrup,palmnectar,alfalfajuice, creatine Immune:Prebiotics, probiotics ConventionalMedicine: ??

TotalPaperson Activity andHealthFunction: Diseases/Activities Studied:

28 (hundredsofpaperoncolostrumin agriculture) Sports Performance:17 Immune:5 GeneralHealth:3 InfantHealth:3

ActiveIngredients Antibodies

ResearchState Antibodiesarereadilydigestedandinactivatedinthe stomachwhichmeansthemechanismofactionof colostrumisdebatable Moderateevidencecolostrumisactiveasanantibioticto treatfoodpoisoningetc. Manypublicationsoncolostruminsportsperformance, weaktomoderateimprovementsshownusingavariety ofmetrics

History CountryofPrimary Author: Australia: 11 NZ:4(8 moreonanalytics/processingof colostrumforhumanuse) USA:3 Finland:3 Netherlands:2 UK:1 Germany:1 Iran:1 Iraq:1 Colostrumhasbeenknown tobeimportantininfant healthandanimalproductionsinceancienttimes. Researchintobovinecolostrumforhumanhealthbegan inthelate1990s.

NZResearchCentres Patents/IP/NZspecificadvantages NZislargest exporterofdairyintheworld Fonterra BioactivityInvestigationGroup(Wellington) InstituteofFoodNutritionandHumanHealth(Waikato University)

PAGE100

BasedonsearchusingPubMed,excludeschemical/processing/foodjournals

PRODUCTPROFILE KIWIFRUITEXTRACT Kiwifruitextractshaverecentlybeenresearchedandisprimarilymarketedfortreatingdigestivecomplaints

Publications(GreenLippedMussel) FirstPublicationon Health Effects: 2001intheUK

Delivery Mechanism Takenasanoralsupplement Freezedried powderfordrink

CompetingProducts Natural: Fibreenrichedsupplements Papayaextract(Papain) Peppermint,pancreatin Pre/Probiotics ConventionalMedicine: ??

TotalPaperson Activity andHealthFunction: Diseases/Activities Studied:

23 Digestion:5 Cancer:4 Asthma: 2 LiverFibrosis:2 Diabetes:2 Antiinflammatory:2 BoneMarrowProduction:1 Cardiovascular:1 Dermatitis:1 Antioxidant: Korea:8 China:6 Japan:4 NZ:4 UK:1 Taiwan:1

ActiveIngredients Actinidin, an enzymewithsimilaractivitytohuman digestiveenzymes Otherdigestiveenzymes Antioxidants History Limitedusesofkiwifruitrelativesintraditional Chinese medicine.KoreanandChinese researchhaslookedat effectsofkiwifruitextractonvarietyofdiseases includingcancerandheartdisease.

ResearchState Effectsondigestionarerelativelyeasytotest Actinidin enhancesbreakdownofprotein Moderateto goodeffectsonproteindigestion Linkbetweenproteindigestionandgastrointestinal diseaseismoredifficulttoestablish Otherusesforextractareclearlyunprovenandsolely initialtrials

CountryofPrimary Author:

NZResearchCentres Patents/IP/NZspecificadvantages Kiwifruitaregrowninseveral countries,NZisamajor player IP?? RiddetInstitute(MasseyUniversity)

PAGE101

BasedonsearchusingPubMed,excludeschemical/processing/foodjournals

PRODUCTPROFILE DEERVELVET DeervelvethasanancienthistoryintraditionChinesemedicinefortreatingdiseaseespeciallyerectile dysfunction

Publications(GreenLippedMussel) FirstPublicationon Health Effects: Firstknownscientificstudywasin1999in SouthKorea Delivery Mechanism Takenasanoralsupplement BlendedintoothertraditionalChinesemedicines CompetingProducts Natural: Virility: Hornygoatweed,yohimbe,maca root, eurycoma shrub,ginko bilboa,ginseng SportsPerformance:Amino acids,kombucha tea,devils claw,ginger,brownricesyrup,palmnectar,alfalfajuice, creatine ConventionalMedicine: Viagra Arthritis:3 SportsPerformance:3 MorphineWithdrawal:2 ErectileDisfunction:1 Cancer:1 Osteoporosis:1 BehaviourModification:1 Canada:7 China:3 NZ:2 SouthKorea: 2 Russia:1

TotalPaperson Activity andHealthFunction: Diseases/Activities Studied:

15

ActiveIngredients Rangeofclaimedcompoundswithactivityincluding glucosamine,chondroitin, collagen,aminoacids

ResearchState Almostentire knowledgebaseisfromtraditionaluses Fewstudiesandlimitedanimal/humantrials Pushnowtoexpandusesbeyondtraditiontreatmentof erectilefunction(duetoViagra) Effectivenessisnotconvincing

CountryofPrimary Author:

History Used intraditionalChinesemedicineforthousandsof yearsastreatmentforerectiledysfunction.Inthepast decade,researchhasgoneintoexpandinghealthusesof velvet.

NZResearchCentres AgResearch

Patents/IP/NZspecificadvantages NotpatentedorIPprotected Farmed deerindustryinNZisworldslargest?

PAGE102

BasedonsearchusingPubMed,excludeschemical/processing/foodjournals

TABLEOFCONTENTS
Appendix Appendix1 ProfilesofNaturalproductscompanies Appendix2 Product Profiles Appendix3 Nutraceuticalsfrommilk Appendix4 Sourcesoffirms Appendix5 Exclusions Page 76 96 103 111 121

APPENDIX3 NUTRACEUTICALSFROMMILK Preliminaryconclusions

Conclusion Probiotics Thesuccessstoryof nutraceuticals Limiteddefensibilityof probiotics Low/nosuccessoutside dairy Probioticsseekingnewuses Bioactivemilkcomponents Notanewconcept

Details

Globalsuccessofprobioticsinyoghurtdrinks Drivenbymajorglobalyoghurt players(e.g.Danone) Noweffectivelymainstream Easytoderiveandpatentnewstrains Crowdedcategorywithlargenumberofpatentedstrains(toomanytolist) Consumerproposition:bacteriainyour foodresonatesinyoghurt;moredifficultelsewhere Numerousnondairyattemptshaveshown limited/nosuccess(e.g.probioticmuseli bar) Probioticsinitially100%guthealth;nownewareas ofclaim(e.g.respiratoryinfections) Recentpatentsshowexplosionofputativenoveluses

Japan(and Korea)havehistoricallyledresearchanddevelopmentofmilkbioactives Nowbeingresearchedaroundtheworld NewZealandstronginareabutNZstrengthshouldnotbeoverplayed Globally:lotsofpapers,lotsofresearch;lotsofpatents Movingfromvaguegeneralhealthclaimstospecifictreatmentsusingdefinedcompounds Primarymarketisinfantformula;minoruseinsportsnutrition,etc. Industrygrowthhasslowed(Chinaonlybrightspot) FonterracreatesLactopharma (w/U ofAuckland)andViaLactia (Fonterrabioactives company)partly tocreatenewproductsandproductuses Chr.Hansen developmentofnumerousnewprobioticuses

Creatingalotofexcitement Limited existingmarket(s) Pushtocommercialise/ createnew/novelproducts

PAGE104

PROBIOTICS COMMERCIALSTRAINS Mostmajorfoodcompanieshaveapatentedstrainofprobioticforyoghurtorsupplementuse

Selectionofprobioticstrainscurrentlyusedinfunctionalfoodsandnutraceuticals
(2010) Strain Bacilluscoagulans GBI30,6086 Bifidobacterium LAFTIB94 Bifidobacterium animalis subspecies lactis BB12 Bifidobacterium breve Yakult Bifidobacterium infantis 35624 Bifidobacterium animalis subsp. Lactis HN019 (DR10) Bifidobacteriumanimalis DN173 010(called Bifidusregularis) Digestivehealth,regularity Digestivehealth Researched effect Reducesirritablebowelsyndrome(IBS), improvedimmunefunction IBS,pathogen,cancertreatment Digestiveandimmunehealth Patent ? ? ? BrandName GanedenBC30,enLiven yoghurt LAFTIB94 ProbioTecBifidobacterium BB 12 Bifiene Align(supplement) Howaru Bifido Company Ganeden Biotech Institut RosellLallemand Chr.Hansen Yakult Procter&Gamble Danisco

Activia yoghurt

Danone (aka Dannon)

PAGE105

Source:Coriolis

PROBIOTICS COMMERCIALSTRAINS Mostmajorfoodcompanieshaveapatentedstrainofprobioticforyoghurtorsupplementuse

Selectionofprobioticstrainscurrentlyusedinfunctionalfoodsandnutraceuticals
(2010) Strain Lactococcus lactis L1A Lactobacillus plantarum 299v Lactobacillusreuteri ATTC 55730 Mixture of Lactobacillus rhamnosus GR1& Lactobacillusreuteri RC14 Lactobacillus plantarum HEAL9 &Lactobacillus paracasei 8700:2 Lactobacillus acidophilus NCFM Lactobacillus johnsonii La1 Bowelinflammation Researched effect Antiinflammatory,digestivehealth ImproveIBSsymptoms Gingivitisprevention,diarrhea treatment,generalhealth Treatmentandpreventionofvaginitis Bion Flore IntimeJarrow Fem Dophilus GoodBelly /ProViva/ TuZen/Bion Transit /ProbiMage Patent BrandName Company Norrmejerier Probi BioGaia Biologics Chr.Hansen

Loweringriskofcatchingacold

BravoFriscus/ProbiFrisk

Probi

Danisco Nestle

PAGE106

Source:Coriolis

PROBIOTICS NEWPATENTS Aflurryofpatentshavebeenfiledrecentlyonnewbacterialstrainswithnovelorimprovedhealthbenefits

NewUSpatentapplicationsinprobiotics
(2011) Category Lactobacillus Subcategories Lactobacillusparacasei KW3110 Researched effect Digestive health Patent Originallypatentedin Japan, USpatent application 20110038837in2011 2011,USpatent application 20110020400 2011,20110020306 2011,USpatent application 20110014166 2011,USpatent application 20110064706 2011,USpatent application 20110033423 2011,USpatent application 20110027243 2011,USpatent application 20110014167 Italy Country/Date discovered Japan? CommercialProduct ?

Bifidobacterium

Bifidobacterium strain AH1205 Bacilluscoagulans Sporolactobacillus vineae SL153strain Cranberry,Dmannoseand severalbacterialstrains Bifidobacterium lactis Bi07 andLactobacillusacidophilus NCFM 5 Lactobacilus strainsanda prebiotic Lactobacillusrhamnosus, inulinandsoy polysaccharides

Antiinflammatory forirritable bowelsyndrome Controlofpathogens inthe digestivesystem Treatmentofpathogensofthe digestivesystem Urinarytractinfections

Bacillus Sporolactobacillus

? ?

Mixture

Mixture

Irritablebowelsyndrome, bloating, diarrhoea Respiratoryinfectionsand intestinalupset,takenorally Treatmentofdiarrhoea

Mixture

Mixture

PAGE107

Source:Coriolis

NUTRACEUTICALMILKPROTEINS Manyproteinsinmilkhavenutraceuticaluses
Milkproteinsandderivativesusedinnutraceuticals
(2010) Category Lactoferrin What Wholelactoferrin Subcategories Researched effect Antimicrobial Lipidmetabolism Patent None Formulation patented,2005(in Japan) 2006(inJapan) Date discovered ? Various,patentedand producedbyNRL Pharma (Japan) Various,patentedand producedbyNRL Pharma (Japan) ? 2000 2005 N/A N/A Products byNuGEN Various,patentedand producedbyNRL Pharma (Japan), seekingFDAapproval ? CommercialProduct

Analgesicandantianxiety

Bone growth(Osteoporosis prevention) Peptides cleavedfrom lactoferrin aa1640 aa1741 Lactoferricin Enterically coatedlactoferrin Antimicrobial activity Anticancer Anticancer Improvedbioavailabilty,to bemarketedasantioxidant

Fonterra andUniversityof Auckland,2002(NZ),2010(US) ?? ?? 2000sfromKorea Coatingcomponentsand methodspatented,2007(in Japan) Patent application2008(US patentapplication 20080161234) Attachmentpatented,2009(in Japan);2011USapplication

Lactoferrin andlacticacid mix Lactoferrin with attached polymer(PEG)

Urinarytractinfection treatment Improvedbioavailability, reducedallergenicity

Patentedand producedbyNRL Pharma (Japan)

PAGE108

Source:Coriolis

NUTRACEUTICALMILKPROTEINS Manyproteinsinmilkhavenutraceuticaluses
Milkproteinsandderivativesusedinnutraceuticals
(2010) Category Peptides cleavedfrom casein Subcategories aa8486andaa7476 Glycomacropeptide aa106116 Casomorphins Casoxins Caseinophosphopeptides Glycylated peptides( casomorphin7) Mineralabsorption,tooth decay Sleepaid Patent application2010 (USPatentapplication 20100130406)by Somnaceutics Ltd (NZ) Patent approved1993 (Europe),1998(US) NewZealand Sleep Timeandothers madebySomnaceutics (nowownedbyNew ImageGroup) Lactiummadeby Ingredia (France),usedin avarietyofproducts A2Milk Researched effect Antihypertensive Antimicrobial Anticancer Patent ?? ?? ?? Country/Date discovered 2003 2006 2006 CommercialProduct Fermentedmilk(Calpis, Evolus) BioPUREGMP Oralcareproducts

Caseinhydrolysate

Sleepaid

France

Caseinisoform

A2casein containingmilk

Heart disease

NewZealand

PAGE109

Source:Coriolis

NUTRACEUTICALMILKPROTEINS Manyproteinsinmilkhavenutraceuticaluses
Milkproteinsandderivativesusedinnutraceuticals
(2010) Category lactoglobulin Whey Subcategories aa7880 Wholewhey Peptidescleavedfromwhey Lactorphins Whey hydrolysate fraction Satiety Patenton isolationand use,2007byUnilever (USpatent7618648) Researched effect Antihypertensive Anticancer Patent ?? Country/Date discovered Japan,1998 2000 CommercialProduct Biozate

lactalbumin Milk Fractions

Calciumabsorption Antiinflammatory(alsoheart diseaseandsports performance) Phosphatidylserine enriched fraction Patentonpurification anduse,1997(USpatent 5650175 Patentapplicationon isolation,2009(US Patentapplication 20090123630) Reductionofallergiesin children Mouthulcers Patentapplicationin AustraliabyBiolink/TGR (Adelaide) Patentapplicationin AustraliabyBiolink/TGR (Adelaide) Microlactin (Stolle Milk Biologics) ?

Proteinextractfrombuttermilk

TGR313producedby TGR,notinproduction yet Lactermin

Protein extract

PAGE110

Source:Coriolis

TABLEOFCONTENTS
Appendix Appendix1 ProfilesofNaturalproductscompanies Appendix2 Product Profiles Appendix3 Nutraceuticalsfrommilk Appendix4 Sourcesoffirms Appendix5 Exclusions Page 76 96 103 111 121

SOURCE CANTERBURY/NELSONNUTRACEUTICALSORGANISATION WereviewedthecompaniesoftheCanterbury/NelsonNutraceuticalsclusterorganisationwebsite

Firm Andeer AromaNZLtd. BioOilsAshburton Ltd Botanica BronsonandJacobsLtd(OricaChemnet) CanterburyDevelopmentCorporation CarolPriestNaturalCosmeticsNZLtd CatalystRandDLtd Claridges HerbalProducts CMSLtd(o2bhealthy) CreateIP ExtractsNZLtd FormulaFoodsCorporationLtd GenesisBioLabLtd GramartFoodsLtd HiTechFoodsLtd JamesandWells LanocorpPacificLtd LincolnUniversity ManuNutraceuticalsLtd MarketNewZealandLtd MerinovaLtd MidlandsSeedLtd MigcoPharmaceuticalsLtd SP Seafood SP Plant Medicine AUbasedsupplier Governmentagency Cosmetics Serviceprovider Manufacturer Manufacturer Serviceprovider Manufacturer Ingredients/service Manufacturer Jam/food Food ingredients Serviceprovider Cosmetics Governmentagency SP Honey Manufacturer SP Seafood SP Plant IP focused Profiled Profiled Outofscope Outofscope Outofscope Outofscope Outofscope Profiled Profiled Outofscope Profiled Notnutraceuticalfocused Profiled Notnutraceuticalfocused Notnutraceuticalfocused Outofscope Outofscope Outofscope Profiled Profiled Profiled Out ofscope Profiled Classification Outcome Firm NIWA NaturesRemedies NelsonHoneyandMarketing NewZealandHealthFoodCompanyLtd NewZealandNutritionalsLtd NZAgriseeds BotanicalsDivision OasisBeautyNZLtd OilSeedExtractionsLtd ProfessionalHerbServicesLtd PukunuiHerbsNZLtd RMFNutraceuticals ScottApiaries SkybrightNaturalHealthLtd Triggertec Ltd UBBioLtd WestlandMilkProducts Xtend LifeNutraceuticalsLtd Classification Governmentagency Retailer SP Honey Retailer Marketing Seeds Cosmetics SP PlantProfiled Retailer/services Farm(?) Manufacturer/sourcer SP Honey Manufacturer Websitedown/dead Manufacturer Dairy Marketer Outcome Outofscope Outofscope Profiled Outofscope Profiled Outofscope Outofscope Profiled Outofscope Followup Profiled Profiled Profiled Unclearstatus Profiled Profiled Profiled

PAGE112

Source:Membershiplistathttp://www.nutraceuticals.org.nz/;Coriolisanalysis

SOURCE NATURALPRODUCTSNZORGANISATION WereviewedthemembershiplistofNPNZorganisation

Firm AbsoluteEssentialLtd Alaron ProductsLtd Anagenix Ltd ApiHealthNZLtd ArohaDrinks Azurlis NZSkin BaldwinsIntellectualProperty BioOilsAshburtonLtd BlackmoresLtd Cawthron Institute ClinicalandRegulatoryServicesLtd(CARSL) CognisAustraliaPTYLtd(NZOffice) ComplementaryHealthcareCouncilofAus. Comvita DavisAsiaLtd DoxconPharmaceuticalsLtd Easiyo Products ENZONutraceuticalsLtd EquineEssentials EssentiallyNewZealandLtd Fonterra ForestHerbsResearchLtd GMPPharmaceuticalsLtd GOHealthyNewZealand GoodHealthOrganisation Classification Cosmetics Manufacturer IPFocused SP Honey Softdrink Cosmetics Serviceprovider SP Plantbased Australian mnfr. Governmentagency Serviceprovider Wholesaler Lobbygroup Marketingfocus Marketingfocus Marketingfocus Dairy SP Forestry Animalhealth SP NZunique Dairy SP NZunique Manufacturingfocus Marketingfocus Manufacturing focus Outcome Outofscope Profiled Profiled Profiled Outofscope Outofscope Outofscope Profiled Outofscope Outofscope Outofscope Outofscope Outofscope Profiled Profiled Profiled Dairy Profiled Outofscope Profiled N/A Profiled Profiled Profiled Profiled Firm GoodHealthProductsLtd GoodbyeSandfly Health2000Group HomecareHealthManagementLtd HubrisInternationalLtd IndustrialResearchLtd IntegriaHealthcare(NewZealand)Ltd Invita NZLtd James&WellsIntellectualProperty JusttheBerries KeeneManufacturingSolutionsLtd KerasiLimited LabelandLithoLtd LifestreamInternationalLtd Manuka HealthNewZealandLtd MendeBiotechLtd MixLtd MJHealthLtd MountainRedLtd NaturalHealthLaboratoriesLtd NaturalHealthReview NelsonApiaries NetworkNutritionPtyLtd NewImageGroup NewZealandExtractsLtd Classification Marketingfocus HBC/Medicine Retailer Marketingfocus SP Seafood Governmentagency Marketingfocus Marketingfocus Serviceprovider SP Plantbased Serviceprovider Serviceprovider Serviceprovider Marketingfocus SP Honey SP NZunique Cosmetics Cosmetics SP Deer Marketingfocus Media SP Honey Wholesaler Marketingfocus SP Plantbased Outcome Profiled Outofscope Outofscope Profiled Profiled Outofscope Profiled Profiled Outofscope Profiled Outofscope Outofscope Outofscope Profiled Profiled Profiled Outofscope Outofscope Profiled Profiled Outofscope Profiled Outofscope Profiled Profiled

PAGE113

Source:Membershiplistathttp://www.nutraceuticals.org.nz/;Coriolisanalysis

SOURCE NATURALPRODUCTSNZORGANISATION continued

Firm NewZealandHealthFoodCompanyLtd NewZealandNatural(NorthAmerica) NewZealandTradeandEnterprise NutraNZ Nutrizeal Ltd NZNewParadiseLtd PacificPerfumesLtd PacificaSkinCareLtd PhytomedMedicinalHerbsLtd PilotBrands Plant&FoodResearch PureVitalityHealthProducts QuantecLtd RadiusPharmacyLtd RedSealNaturalHealthLtd RemarkableFoodsLtd RMFMarketingServicesLtd RobertForbesandAssociatesPtyLtd SanofiaventisNewZealand SeaDragonMarineOilsLtd Seperex NutritionalsLtd SimunovichOliveEstate SomnaceuticsLtd SupremeBiotechnologies (NZ)Ltd TheNewZealandKingSalmonCoLtd PAGE114 Classification Marketingfocus Dairy Governmentagency Marketingfocus Manufacturingfocus Marketingfocus Cosmetics Cosmetics Manufacturingfocus Meat Governmentagency SP Deer IPFocused Retailer Marketingfocus Food Manufacturingfocus Serviceprovider Australianmnfr./whls. SP Seafood IPFocused Cosmetics IPFocused IPFocused Seafood Outcome Profiled Dairy Outofscope Profiled Profiled Profiled Outofscope Outofscope Profiled Meat Outofscope Profiled Profiled Outofscope Profiled Food Profiled Outofscope Outofscope Profiled Profiled Outofscope Profiled Profiled Seafood WilsonsLavendersLtd Farmer Firm TrinityBioactives Ltd UBMMedicaNewZealandLtd VictoriaUniversityofWellington VitacoHealthNZLtd Classification IPFocused Media Governmentagency Marketingfocus Outcome Profiled Outofscope Outofscope Profiled Nowebsite NothingonGoogle Notincompaniesoffice

Source:Membershiplistathttp://www.nutraceuticals.org.nz/;Coriolisanalysis

SOURCE NZBIOORGANISATION WereviewedthemembershiplistoftheNZBIOorganisation

Firm AJPark AbacusBioLimited AFTPharmaceuticalsLtd AgResearch Argenta ManufacturingLimited AucklandCouncil AucklandUniServicesLtd Baldwins IntellectualProperty BioCatalystLtd BioengineeringInstitute,U.ofAuckland BiomattersLimited BioPacificVentures BLISTechnologiesLtd BusinessNZ Cawthron Institute CoDaTherapeutics,Inc. CureKids Ernst&Young EnvironmentalServicesResearch(ESR) Estendart FonterraCooperativeGroupLtd FRST IndustrialResearchLimited InnateTherapeuticsLimited InstituteforInnovationinBiotechnology PAGE115 Classification Serviceprovider Serviceprovider Pharmaceuticals Governmentagency Animalhealth Governmentagency Governmentagency Serviceprovider Serviceprovider Governmentagency Service/Software Venture capital IP focusednutraceutical Lobbygroup Governmentagency Pharmaceuticals Charity Serviceprovider Governmentagency Serviceprovider Dairycompany Governmentagency Governmentagency Pharmaceutical Equipmentsupplier Outcome Outofscope Outofscope Outofscope Outofscope Outofscope Outofscope Outofscope Outofscope Outofscope Outofscope Outofscope Outofscope Profiled Outofscope Outofscope Outofscope Outofscope Outofscope Outofscope Outofscope Profiled Outofscope Outofscope Outofscope Outofscope Firm InvitrogenNewZealandLimited Izon Science James&WellsIntellectualProperty Kerridge&Partners KODEBiotech LanzaTechNZLtd LivingCellTechnologiesLimited ManukaHealthNewZealandLtd MasseyUniversity MauriceWilkinsCentre MedicinesNewZealand MerckMillipore MinistryofScience&Innovation MPBiomedicalsNewZealandLimited NewZealandTrade&Enterprise NZGenomicsLtd Otago InnovationLimited PacificEdgeBiotechnologyLtd PastoralGenomicsLimited PGGWrightson Seeds PhotonzCorporationLimited PlantandFoodResearch PolyBatics Ltd. PricewaterhouseCoopers RJHillLaboratories Classification Equipmentsupplier Spectroscope Serviceprovider Recruitmentagency Biotech BioEnergy Pharmaceuticals SP Honey Governmentagency Governmentagency Lobbygroup Equipmentsupplier Governmentagency Equipment/supplies Governmentagency Governmentagency Governmentagency Biotech Researchconsortium Seeds/farm supplies IP focusednutraceutical Governmentagency Biotech Serviceprovider Serviceprovider Outcome Outofscope Outofscope Outofscope Outofscope Outofscope Outofscope Outofscope Profiled Outofscope Outofscope Outofscope Outofscope Outofscope Outofscope Outofscope Outofscope Outofscope Outofscope Outofscope Outofscope Profiled Outofscope Outofscope Outofscope Outofscope

Source:Membershiplistathttp://www.nzbio.org.nz;Coriolisanalysis

SOURCE NZBIOORGANISATION continued

Firm RubiconLtd SCION Seperex Limited SigmaAldrichNewZealandLtd SimpsonGrierson SouthernLightsBiomaterials SymansisLtd TechSol Thompson&ClarkInvestigationsLimited ThomsonReutersHealthcare&Science TompkinsWake UniversityofOtago,Research&Enterprise ViaLactia Biosciences(NZ)Limited WaikatoLinkLimited Wintec WorldCourier(NZ)Limited Classification Biotech/other Governmentagency IP focusednutraceutical Equipment/supplies Serviceprovider Animal tissue Biotech/other Noavailabledata Serviceprovider Serviceprovider Serviceprovider Governmentagency Biotech/other Governmentagency Governmentagency Serviceprovider Outcome Outofscope Outofscope Profiled Outofscope Outofscope Outofscope Outofscope Unclear Outofscope Outofscope Outofscope Outofscope Outofscope Outofscope Outofscope Outofscope

Lessthan1/3(21outof66) actuallybio/pharma related firms

PAGE116

Source:Membershiplistathttp://www.nzbio.org.nz;Coriolisanalysis

SOURCE NZTE WereviewedthelistofnutraceuticalfirmsprovidedbyNZTEfromtheirdatabase

Firm A2Corporation AbacusBiotechLtd AbsoluteEssential Agresearch Ltd AgrilabCoProductsLtd AgriQuality NZLtd Alaron ProductsLtd AlphaLaboratoriesNZLtd Aotea PacificLtd ApiHealth NZLtd Aroma(NZ)Ltd AucklandUniServices Limited Bioactives Research TrinityBioactives Biovittoria Blackmores BLISTechnologies BronsonandJacobs CanesDeerProductsLtd Cawthron Institute CellularImprovementsLtd CMS Comvita CreativeEnergyNaturalHealthNZ DistributionInternational Classification Dairy Serviceprovider Cosmetics Governmentagency SP Meatbyproducts Governmentagency Manufacturingfocus Manufacturingfocus SP Seafood SP Honey SP Seafood Governmentagency Serviceprovider IPFocused SP Plantbased Aust.Mnfr. IPFocused AUbasedsupplier SP Deer velvet Governmentagency SP Honey/beeproduct WHO? SP Honey Marketingfocus Wholesaler/Retailer Profiled Profiled Outofscope Outcome Dairy Outofscope Outofscope Outofscope Profiled Outofscope Profiled Profiled Profiled Profiled Profiled Outofscope Outofscope Profiled Profiled Outofscope Profiled Outofscope Profiled Outofscope Profiled Firm Earthwise DirectAkaBetta CropOrganics EatRightFoods Enzo NutraceuticalsLtd EssentiallyNewZealand EvergreenLifeLimited ExtractsNZLtd FirstOceanWide Fonterra/NZMP ForestHerbsResearchLtd FragranceHoldingsLtd(LesFloralies) FunctionalWholeFoods GenesisBiolaboratory Ltd Gevir ProductsNZLtd GHO Ginko GreenNZLtd GMPPharmaceuticals GoodHealthProductsLtd Gracelinc Gramart Foods DavisAsia Ltd HappyFamiliesLtd HealthandHerbsInternationalLtd Vitaco Health HerbMarkLtd/EcoLogicConcepts HoneyNewZealandIntlLtd Classification HBC/Cleaning Food SP Forestry SP NZunique Marketingfocus Manufacturingfocus Unclear Dairy SP NZunique Cosmetics SP Plantbased Manufacturingfocus SP Deer velvet Food(vinegar/drinks) SP Plantbased Manufacturingfocus Marketingfocus IPFocused Food Marketingfocus Retailer Marketingfocus Marketingfocus SP Seafood(seaweed) SP Honey Outcome Outofscope Food Profiled Profiled Profiled Profiled Websitedown Dairy Profiled Outofscope Profiled Profiled Profiled Outofscope Profiled Profiled Profiled Profiled Food Profiled Outofscope Profiled Profiled Profiled Profiled

PAGE117

Source:Membershiplistathttp://www.nutraceuticals.org.nz/;Coriolisanalysis

SOURCE NZTE continued

Firm Honeycreme InternationalLtd Plant&FoodResearch HubrisInternational IdealHealth Immuno LaboratoriesNZLtd IndustrialResearchLimited(RP) Jagulana HealthProductsLtd JusttheBerriesLtd Lifestream InternationalLtd LivingNature MacLab MalcolmHarker Ltd ManukaHealthNZ MarketNewZealandLtd Maxamena MendeBiotechLtd SeaDragon MarineOils Miada SportsNutrition NationalDeerHornLtd NaturalHealthLaboratories NaturalHealthNewZealand(2002)Ltd NaturalHealthReview NaturalHealthZone NatureBee Natureplus Classification Cosmetics Governmentagency SP Seafood Retailer Marketingfocus Governmentagency Marketingfocus SP Produce Marketingfocus Cosmetics SP Seafood Marketingfocus SP Honey Manufacturingfocus SP Seafood SP NZunique SP Seafood Marketingfocus SPDeer Marketingfocus SP Seafood Publication Retail SP Honey Marketingfocus Outcome Outofscope Outofscope Profiled Outofscope Profiled Outofscope Profiled Profiled Profiled Outofscope Profiled Profiled(inliquidation) Profiled Profiled Profiled Profiled Profiled Profiled Profiled Profiled Profiled Outofscope Outofscope Profiled Profiled Firm Nature'sNurse NaturesSunshineProducts(NZ) Naturo PharmLtd NelsonApiariesLtd NetworkNutrition NewZealandBotanicalsLtd NewZealandPharmaceuticals NewZealandSupremeNaturalFoodsLimited NIWA NutraNZ Nutravision ConsultancyServices NutriPharm NZLtd(NutritionalBrands) NutriZealLtd NZBlackcurrantHoldingsLtd NZExtractsLtd NZHealthFoodCompany NZHealthNaturally NZHealthShop NZLaboratoryServices OilSeedExtracts PacificHealthProducts Pharmazen Group Phytomed MedicinalHerbsLtd ProActive Nutrition ProfessionalHerbServices Classification Topicalmedicine Marketingfocus Parentprofiled SP Honey Nolongeroperating Marketingfocus Manufacturingfocus SP Deer Governmentagency Marketingfocus Equipment/consultant Infantformula Manufacturingfocus Food SP Plantbased Marketingfocus Marketingfocus Retailer Service provider SP Plantbased Wholesaler Manufacturingfocus Marketingfocus Parentprofiled Wholesaler/retailer Outofscope Profiled Profiled Profiled Outofscope Profiled Outofscope Processedfoods Profiled Food Profiled Profiled Profiled Outofscope Outofscope Profiled Outofscope Profiled Profiled Profiled Outcome Outofscope Profiled

PAGE118

Source:Membershiplistathttp://www.nutraceuticals.org.nz/;Coriolisanalysis

SOURCE NZTE WereviewedtheNZTEfeedback

Firm Quantec Ltd RedSealNaturalHealthLtd RMFMarketingServicesLtd RobertForbes&Assoc Seperex NutritionalsLtd Silberhorn Solgar NZ NewImage Tairawhiti PharmaceuticalsLtd Tatua Integria Health TrilogyNaturalProducts Tui BeeBalme Coop VitaFitNutritionLtd VitalFoodProcessorsLtd Weleda NZLtd WestlandMilkProducts Xtend LifeNutraceuticals(NZ)Ltd ZealExtractsLtd Classification IPFocused Marketingfocus Manufacturingfocus Serviceprovider IPFocused SP Deer velvet Agent/wholesaler Marketingfocus SPNZunique Dairy Marketingfocus Cosmetics Cosmetics Parentprofiled SP plantbased Cosmetics Dairy Marketingfocus SP Honey Profiled Outofscope Dairy Profiled Profiled Outcome Profiled Profiled Profiled Out ofscope Profiled Profiled Outofscope Profiled Profiled Dairy Profiled Outofscope Outofscope

PAGE119

Source:Membershiplistathttp://www.nutraceuticals.org.nz/;Coriolisanalysis

SOURCE MSI WereviewedtheMSIadditionsaspartoftheirfeedback

Firm Synlait A2Corporation Anagenix CarinaChemicalLaboratoriesLtd Blackmores Gevir Premium GraceLinc Limited KiwifruitExtractVenturesLtd Miers Laboratories MJHealthLtd NaturalMagicLtd Nature'sKissNZLtd Tairawhiti Pharmaceuticals XtendLifeNaturalProducts(International) Limited Alliance ANZCO AFFCo SFF MeatBiologicsResearchLtd. SP meatbased Profiled Classification SP Dairy SP Dairy ShownwithTrinity Unclear businessmodel AU/NoNZ mnfr. (ClosedNZmnfr 1996) SP Deer IPFocused IPFocused Marketingfocused Cosmetics Medicalointment Medicalointment NZunique Manufacturingfocus Outofscope Profiled Profiled Profiled Profiled Outofscope Outofscope Outofscope Profiled Profiled Outcome Profiled Profiled Profiled

PAGE120

Source:Membershiplistathttp://www.nutraceuticals.org.nz/;Coriolisanalysis

TABLEOFCONTENTS
Appendix Appendix1 ProfilesofNaturalproductscompanies Appendix2 Product Profiles Appendix3 Nutraceuticalsfrommilk Appendix4 Sourcesoffirms Appendix5 Exclusions Page 76 96 103 111 121

SUPPLEMENTARY IDENTIFIEDTHENEXCLUDED Weidentifiedthefollowingfirmsbutthenexcludedthemasoutsidescope

Asthereiseffectivelynodataon thesizeandstructureofthenutraceuticalssectorinNewZealandwe builtdatafromscratch: Identifyingasmanyaspossible companiesinNew Zealand Attempting todeterminebasicinformationaboutidentifiedfirms

Todothis,weusedawiderangeofsources,includinginterviews,industrydirectoriesandweb searches Aspartofthis,weidentifiedarangeofcompanieswhichweexcludedfromourdefinitionofthe industry Weincludealistofthesefirmshereforreference

PAGE122

COSMETICS Weidentifiedarangeofnaturalproductsderivedcosmeticsfirmswhichwereoutofscope
IdentifiednaturalproductsderivedcosmeticsfirmsinNewZealand
(2010orasavailable)
Turnover Cosmetics www.absoluteessential.com/ Aromatherapy;essentialoils www.livingnature.com/ Cosmetics &skincare;partiallyownedbyNewImage www.doctorwendy.net/ Skincare %Export Employees Ownership Year founded Notes

www.carolpriest.co.nz/

Lanocreme

1987

www.lanocreme.com/ Lanolincream;honey; kiwifruitextract;others www.oasisbeauty.co.nz/ Skincare www.gonative.co.nz Natural cosmeticsingredientswithNZspecificingredients www.lesfloralies.co.nz/

4 (ws)

PAGE123

Source:variouscompanyannualreports;variouscompanywebsites;Kompass;interviews;Coriolisanalysisandestimates

COSMETICS Weidentifiedarangeofnaturalproductsderivedcosmeticsfirmswhichwereoutofscope
IdentifiednaturalproductsderivedcosmeticsfirmsinNewZealand
(2010orasavailable)
Turnover Cosmetics NZ/Swiss;private (52% Melville;48%Weleda AG) www.weleda.com.au;http://www.weleda.co.nz www.weleda.com www.honeycreme.co.nz %Export Employees Ownership Year founded Notes

www.trilogyproducts.com/

www.tuibalmes.co.nz

www.magickawa.com Kawakawaointment www.kiriskincare.co.nz

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Source:variouscompanyannualreports;variouscompanywebsites;Kompass;interviews;Coriolisanalysisandestimates

WHOLESALERS Weidentifiedarangeoffirmsthatwerewholesalersofimportedproductandfirmsthatonlyservedhorses
Identifiedimporter/wholesalersofnutraceuticalingredientsinNewZealand
(2010orasavailable) Turnover Importer/Wholesaler $150m (K;05) IngredientTechniques Animalnothuman GoodHealth Organisation RedwoodAnimalHealth Equine Essentials 3 2005 www.rah.co.nz/ $1m (Ke) 70 (K) 5 (K) 1987 www.chemiplas.co.nz Wholesalernotmanufacturer;somefoodingredients www.ingredients.co.nz Wholesaler notmanufacturer %Export Employees Ownership Year founded Notes

n/a

www.equineessentials.co.nz/ Horsecosmeticproducts

PAGE125

Source:variouscompanyannualreports;variouscompanywebsites;Kompass;interviews;Coriolisanalysisandestimates

PRIMARILYRETAILER Weidentifiedawiderangeofnutraceuticalsretailers,primarilydirect/internetsellers
NewZealandnutraceuticalsfirms primarilyretailer
(2010orasavailable)
Turnover PrimarilyRetailer www.healthy.co.nz http://theherbaldispensaryraglan.co.nz Retailstore http://livingfoodslifestyle.co.nz http://childlife.co.nz ImportsanddistributesChildLifeEssentialssupplements 1993 www.proherb.co.nz Import anddistributionofglobalproducts www.tasmanhealth.co.nz/ www.greenhealth.co.nz 1020 www.healthpost.co.nz Retailotherbrandsandhaveownbrand www.healthia.co.nz ShamansGarden 2003 2000s www.shaman.co.nz Herbalremedies www.hhacupuncture.co.nz Solelysellkombucha tea www.naturesremedies.com/ %Export Employees Ownership Year founded Notes

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Source:variouscompanyannualreports;variouscompanywebsites;Kompass;interviews;Coriolisanalysisandestimates

PRIMARILYRETAILER continued
NewZealandnutraceuticalsfirms primarilyretailer
(2010orasavailable)
Turnover PrimarilyRetailer T.J.Clark $1m (Ke) $3m (K) 5 (K) 3 (K) NewZealand;private (Sowden family) 2001 1992 www.tjclark.co.nz/ Nonijuice, colloidalminerals,other www.abeeco.co.nz/ Parent isPerformanceHealth Directmail;originallybeepollen;nowarangeof supplementspacked byothers www.nonihealth.co.nz Primarilysellnoniproducts:supplements,juice,soap www.nonienterprise.com/ Sell onlynonijuiceandcapsules(madeinNiue) www.purepacifika.com Sell onlynonijuiceandcapsules(madeinNiue) www.probiotics.co.nz Importersanddistributors 2000 www.lovelyhealth.com SouthernDeep(marine),SouthernCountry(dairy), Southern Synergy(barleygrass)rangeofsupplements http://www.healthy.co.nz/ FirmisIdealHealth
www.workboot.co.nz/profile/Natural_Health_Zone/2540.html

%Export

Employees

Ownership

Year founded

Notes

http://www.nzhealthshop.co.nz/ $6m (2010)

PAGE127

N/A

1985

www.healthworldnz.co.nz BrandsMetagenics/EthicalNutrients Factory inAustralia;wholesaleAUproducedproductinNZ

Source:variouscompanyannualreports;variouscompanywebsites;Kompass;interviews;Coriolisanalysisandestimates

PRIMARILYRETAILER continued
NewZealandnutraceuticalsfirms primarilyretailer
(2010orasavailable)
Turnover PrimarilyRetailer www.tastenature.co.nz Healthshop www.realnutrients.co.nz Haveownbrand, ~50%ofproducts www.biotrace.co.nz Onsellproduct fromUS 1984 www.pachealth.co.nz Salestonaturalhealthindustry;effectivelyawholesaler www.vitalityplus.co.nz www.in2herbs.co.nz Importanddistribution www.vitallife.co.nz Justonlinesales NaturesNutrition www.naturesnutrition.co.nz www.waimarinonaturalhealth.co.nz www.oneearth.co.nz Rangeofsupplementsand herbalproducts
PAGE128 Source:variouscompanyannualreports;variouscompanywebsites;Kompass;interviews;Coriolisanalysisandestimates

%Export

Employees

Ownership

Year founded

Notes

2 24

2009