Probiotics are an increasingly popular addition to mainstream foods and are set to more than triple in value in Europe to reach $137.9 million (€118.5m) by 2010, according to a recent Frost & Sullivan report.
But competition between a growing number of players present in the added-value market, as well as consolidation among some of the biggest suppliers, is driving probiotic companies to focus ever more closely on the scientific support for their strains in a bid to retain and grow their share of sales.
"Every supplier has their bank of strains but we are becoming more orientated towards the consumer rather than simply thinking about the strain. The consumer wants to know what effect it has on health," said Jerome Caussin, human nutrition product manager at Institut Rosell.
Researching strains with specific functions rather than marketing them for general 'wellbeing' requires significant R&D resources and capabilities, and is often carried out by universities. Probiotics suppliers are increasingly entering into licensing agreements to gain access to this science.
For example, market leader Chr Hansen recently entered a strategic alliance with Canadian research company Urex Biotech to offer probiotic bacteria specifically targeted to 'maintain and restore healthy vaginal microflora' in women.
"It can be easier to justify buying or licensing a strain that has already been proven rather than investing in all the research in house," commented Danny O'Regan, director of the Fresh Dairy segment in Danisco's cultures unit. "It is a way of managing risk, if you like."
He added: "You also have research carried out by an independent, third party, in which customers are more believing."
Gaining access to new research is however becoming more competitive, with many of the suppliers sponsoring conferences or organizing their own to attract researchers and increase their networks.
Chr. Hansen says its sponsorship of this week's International Probiotics Conference in Slovakia is part of a long-term strategy to seek and establish new collaborations with probiotics researchers.
"This has been one of our policies for a number of years. Probiotics is a growth area for us, growing at around 25 per cent annually. They are the product area with the highest growth across the [cultures] business, albeit from a comparatively small base," said Peter Olesen, executive vice president of Chr Hansen, responsible for R&D, technology and applications.
He added: "We also believe that some of our major customers are investing in research in this area, which suggests that they may be interested in developing their own products in the future."
This increasing interest from dairy and other food companies could put pressure on culture suppliers.
Institut Rosell has organized two probiotics symposiums in France this year and Caussins has noticed the food industry's increasing interest in the sector, as well as increased competition for the clinical work.
However Danisco's Danny O'Regan points out: "For universities there is a drawback in going to a medium dairy firm as they will be limited to particular markets rather than the global nature of a cultures supplier."
Danisco, which has significantly boosted its probiotics business with the recent Rhodia acquisition, currently has two agreements in which it will become the preferred partner of the research organisation if the necessary results are achieved in trials.
But increasing investment in science from all sectors of the food industry will also help grow the probiotics market.
"We are still only at level one on a scale of 10 in terms of what we know about probiotics," said Caussin. "It is a fascinating area and there is much more research to be done."