Pharmacy firms prosper as sales of functional food increase

Pharmacy manufacturers and distributors are earning big money from the functional food market, which has been witnessing stable two-digit growth rates in the last few years.

During a recent interview with Bloomberg, Pham Thi Viet Nga, CEO of Hau Giang Pharmacy (DHG), revealed that functional food sales make up eight percent of DHG’s total revenue, while the figure is expected to increase to 15 percent in the next five years.

The Bloomberg reporter commented that Nga, like other managers of pharmacy firms, often decline to give exact figures when asked about functional food production and sales, but they all have been moving to this very attractive market.

DHG’s first quarter finance report showed that of its 17 subsidiaries, 14 were trading in functional food.

Traphaco, best known for its oriental medicine products, jumped into the functional food market after realizing the great potential of the market.

“Hoat huyet duong nao” and Boganic alone bring revenue of VND200 billion to the company every year, helping the company’s total revenue increase steadily from less than VND900 billion in 2010 to VND1.7 trillion in late 2013.

Nha Yen Nha Trang, Domesco Dong Thap, IMC, Sao Thai Duong, Thanh Dat Pharmacy and many other pharmacy firms have reportedly have been planning to set up new factories to make functional food. Mekophar has also announced it would develop oriental medicine and functional foods this year.

The Vietnamese functional food market is enjoying a boom as Vietnamese consumers now believe in the effects of functional food products after a long “wait-and-see” time.

A mini survey conducted by VnExpress’ reporters showed that functional food products are available at most drugstores in HCM City.

Thanh Hoa, the owner of a drugstore in Binh Thanh District, said functional food has been unexpectedly selling very well over the last two years.

“Vietnamese are now familiar with this new kind of food. The products for skin and beauty care have been selling well,” she noted.

Hoang Lan, the saleswoman of a drugstore in Binh Thanh District, said there are over 300 functional food items available there, 50 percent of which are Vietnamese made.

According to Dr. Tran Dang, Chair of the Vietnam Functional Food Association, 10,000 functional food products, of which 40 percent were imports, hit the market from 2011 to 2013.

He cited a report as saying that nearly all the Vietnamese pharmacy firms have functional food products available in the market. By the end of 2012, Vietnam had 1,781 functional food manufacturers, and it has now soared to 3,500.

However, despite the high number of manufacturers and products, Vietnamese functional food remains less favored than imports or foreign branded ones.

Amway, Herbalife and Nu Skin are the best-known foreign functional-food manufacturers in Vietnam.

Six years ago, when Amway landed in Vietnam and began making household products, functional food brought the third biggest revenue among the products. But things are quite different now, with functional food standing firmly at the No 1 position.

Meanwhile, Herbalife Vietnam has reported annual growth rate of 50 percent for the last three years. The same growth rate has been reported by Nuskin for its 25 functional food items that it distributes in Vietnam.

VNE