Cordyceps cicadae and a fermentation broth made from the fungus are displayed at the headquarters of Grape King Bio in northern Taiwan’s Taoyuan City. (Photo by Chin Hung-hao)
Taiwan health supplement manufacturers are investing in biotech research amid rising demand for wellness products at home and abroad.
In 2017, Taipei City-based TCI Co. claimed the top prize at the Taiwan BIO Awards, marking the first time the prestigious honor was granted to a dietary supplements company. The firm was lauded for its explosive growth in the potential-laden market. TCI’s annual revenues rose fourfold between 2008 and 2017 to about NT$4 billion (US$133.3 million). Today, the original design manufacturer creates products for over 400 brands in more than 40 countries and territories.
Prior to last year, the awards—launched in 2012 and overseen by Taiwan Bio Industry Organization—were dominated by pharmaceutical and medical device producers. Recognition for TCI highlights growing diversification in the nation’s biotechnology sector as well as industrywide investment in research and technological upgrading. “TCI functions more like an R&D institute than an enterprise,” said Aaron Chen (陳彦任), head of the company’s marketing department. “Our commitment to innovation is the primary reason for our impressive growth.”
Ginseng extract drinks in sachets and bottles made by Taipei City-based TCI Co., Taiwan’s leading exporter of dietary supplements (Photo by Chin Hung-hao)
Blossoming Market
The dietary supplements and health drinks market is booming. Related products accounted for at least 10 percent of the nation’s NT$613 billion (US$20.4 billion) food production sector in 2017, according to Jane Shiang-tang (簡相堂), director of the Planning Office at the government-supported Food Industry Research and Development Institute (FIRDI) in northern Taiwan’s Hsinchu City. “Modern testing equipment makes it easier than ever before to demonstrate the effectiveness of natural health supplements, and as a result more and more people are willing to give them a try,” he said.
Misha Li (李金霙), a senior brand specialist at New Taipei City-based Biozyme Biotechnology Corp., identified aging populations in developed markets as a major factor behind rising demand. “Consumers are also much better informed and far more health-conscious compared to three or four decades ago.”
Founded in 1981, Biozyme is the largest manufacturer of enzyme supplements in Taiwan. The company produces a range of natural extracts from locally grown organic fruits and vegetables. These products, including detox powders and health drinks, are believed to boost metabolism and nutrient absorption.
Having found success among traditional target groups, Lee said that Biozyme is reaching out to other demographics. “People tend to think about taking dietary supplements only after entering middle age,” she said. “That’s why we’ve developed options aimed at improving the health of pregnant women and teenagers reaching puberty.”
Raw materials are tested as part of the company’s quality control procedures. (Photo by Chin Hung-hao)
According to Jane, consistent product development is the key to success in the supplements sector. “TCI is an excellent example in this regard. It has grown so quickly because it embraces pioneering ideas and constantly strives to sharpen its competitive edge,” he said.
This commitment to innovation is spotlighted by the firm’s integrated bioscience design program. Launched in 2011, the initiative aims to combine cutting-edge research and technologies in areas like applied material sciences, biology, consumer behavior research, genetics and industrial engineering. Last year, TCI also boosted its number of in-house research laboratories from four to nine. Among its core R&D facilities is Next Lab, which focuses on improving production techniques and examining additional organisms for health-enhancing qualities. “By constantly exploring fresh frontiers, we can stay ahead of our competitors, but also help grow the industry for the benefit of all participants,” Chen said.
Embracing Innovation
Integrating new technologies and exploring emerging trends has helped Grape King Bio remain at the forefront of the country’s health foods sector for almost five decades. The company headquartered in northern Taiwan’s Taoyuan City rose to prominence with the energy drink ComeBest, among the top-selling items of this type following its launch in 1969 until the 1990s. “But even with the popularity of that product, we were aware that future company growth would require diversification through long-term investment in biotech applications,” said Chen Chin-chu (陳勁初), vice president of the firm’s R&D Division.
Grape King took steps to enter the supplements market with the launch of its Bioengineering Center in 1991. The first fruits of these labors, lactic acid bacteria-infused granules, hit store shelves six years later. Today, these products, thought to improve digestion, are the company’s leading revenue source. “Patience is required as any R&D involving the study of organisms is unpredictable and time-consuming,” Chen said.
Banana peel extract products developed by TCI are intended to help relieve depression. (Photo by Chin Hung-hao)
Also in the late 1990s, Grape King began to explore methods of mass-producing fungal extracts. The company first created a product from Ganoderma, a genus of polypore mushrooms believed to strengthen the immune system, before applying similar techniques to Antrodia cinnamomea, a species of fungus said to boost liver function and reduce blood pressure.
Unlike exports leader TCI, Grape King primarily focuses on the local market. Domestic sales of own-brand items account for 85 percent of the firm’s revenue, with the remainder coming from original design and equipment manufacturing services for other industry participants. The company also continues to produce ComeBest, though the drink now contributes just 3 percent to the bottom line.
Research Collaboration
For Grape King and TCI, tie-ups with local academic organizations have proved crucial in strengthening commercialization and research expertise. The latter’s Next Lab is situated on the campus of National Chung Hsing University in central Taiwan’s Taichung City and partners with the tertiary institution’s Biotechnology Center on product development.
Recent results of Grape King’s related cooperation include hericium mushroom extract supplements. Released in 2015, the products are said to support nerve regeneration. Since 2010, the company has invested some NT$40 million (US$1.34 million) on funding research into the functional properties of the fungus, with further studies ongoing.
Workers monitor fermentation tanks at Biozyme Biotechnology Corp.’s manufacturing facility in Taoyuan. The firm’s enzyme supplements are produced from locally grown organic fruit and vegetables. (Photo courtesy of Biozyme Biotechnology Corp.)
Grape King’s Chen also highlighted the impact of FIRDI’s work in developing new applications and transferring results to industry. “Our techniques for producing roseroot extracts, which lower blood sugar levels, originated at the institution,” he said.
Both companies have earned recognition for their innovative approaches in manufacturing natural health supplements. TCI’s technology for ultrasonic cold extraction of banana peels, used to create its Happy Banana supplements purported to relieve depression, won a gold medal at the 2013 International Exhibition of Inventions in Geneva. And Grape King’s method for preventing degradation of health-promoting substances called erinacines during fermentation of hericium mushrooms earned gold at the International Trade Fair, or iENA, in Nuremberg, Germany, last year.
In line with global trends, a major focus of current research initiatives across Taiwan’s supplements sector is probiotics. According to a report released in February 2017 by U.S.-based market consultancy Grand View Research, worldwide demand for such products is expected to reach US$7 billion by 2025, up from US$3.3 billion in 2015. TCI is among the industry participants eagerly eyeing this fast-growing segment, with one of the company’s new in-house R&D facilities, the Human and Microbiome Laboratory, targeting probiotics.
According to Aaron Chen, the sky is the limit in the rapidly developing supplements market and Taiwan biotech enterprises are well placed for takeoff. “The average human body has 10 times the number of bacteria as human cells, yet so much about the role that microorganisms play in our health and well-being remains a mystery,” he said. “Now the whole world is paying attention to this area.”