Voluntary Report - Public distribution

**Date:** 12/26/2007

**GAIN Report Number:** FR7039

FR7039

**France**

**Product Brief**

**French Market for Food Supplements**

**2007**

**Approved by:**

![](media/image1.wmf)Elizabeth Berry

U.S. Embassy, Paris

**Prepared by:**

Roselyne Gauthier

**Report Highlights:**

In 2006, the French food supplement market was valued at approximately
one billion Euros (\$1.3 billion), a 15 percent increase compared to
2005 and a 34 percent increase compared to 2004. Best prospects in
France include plant extracts, vitamins, herbal teas, dietetic meal
substitutes and weight-loss products, bone mineral deficiency and
anti-stress supplements, and sedatives. More recently, cranberry-base
products have made gains in the French market.

American products have real potential in this market provided that U.S.
manufacturers conform to EU standards and the more stringent French
regulations, and can withstand tough competition from European
manufacturers.

Includes PSD Changes: No

Includes Trade Matrix: No

Annual Report

Paris \[FR1\]

\[FR\]

Table of Contents

[**SECTION I. DEFINITION AND MARKET OVERVIEW
3**](#section-i.-definition-and-market-overview)

[a. Definition: 3](#a.-definition)

[b. Market Overview: 3](#b.-market-overview)

[SECTION II. MARKET SECTOR OPPORTUNITIES AND THREATS
4](#section-ii.-market-sector-opportunities-and-threats)

[a. Entry Strategy: 4](#a.-entry-strategy)

[b. Market Structure and Trends of the Five Distribution Circuits*:*
4](#b.-market-structure-and-trends-of-the-five-distribution-circuits)

[SECTION III. MAJOR COMPANIES IN THE FOOD SUPPLEMENT SECTOR
8](#section-iii.-major-companies-in-the-food-supplement-sector)

[SECTION IV. COSTS AND PRICES 8](#section-iv.-costs-and-prices)

[SECTION V. MARKET ACCESS 9](#section-v.-market-access)

[Custom duties 9](#custom-duties)

[Regulations 9](#regulations)

[SECTION VI. BEST PRODUCT PROSPECTS 11](#__RefHeading___Toc183425262)

[SECTION VII. KEY CONTACTS AND FURTHER INFORMATION
12](#section-vii.-key-contacts-and-further-information)

Note: Exchange rate used in this report:

Calendar Year 2005: U.S. Dollar 1 = 0.8038 Euros

Calendar Year 2006: U.S. Dollar 1 = 0.796 Euros

(Source: Paris Stock Exchange/European Central Bank)

# SECTION I. DEFINITION AND MARKET OVERVIEW 

# 

## a. Definition:

The European Union (EU) food supplement Directive 2002/46/EC, aimed at
harmonizing EU rules across Member States, transcribed by French decree
2006/352 of March 20, 2006, defines food supplements as \"foodstuffs
meant to supplement the normal diet and which are concentrated sources
of nutrients or other substances with a nutritional or physiological
function, alone or in combination, marketed only in dose form measured
in small quantities.\"

Food supplements cannot be sold in bulk in retail outlets. Food
supplements are generally marketed in pill, capsule, or vial form. They
contain nutrients (vitamins and minerals), nutritional substances, such
as plant extracts or technological additives, colorings, or sweeteners
as listed in French decree 2006/352.

## b. Market Overview:

France has a dynamic food supplement market that grew 15 percent in
2006, compared to 2005, and 34 percent compared to 2004. In 2006, the
French market was estimated at 1.03 billion Euros (\$1.3 billion).

[Consumers]{.underline}: Recent French consumer surveys show that ten
percent of the French population regularly consumes food supplements
while 50 percent are more casual consumers. 67 percent have confidence
in food supplements; 61 percent believe consumption of food supplements
reduces health expenses. Consumers generally expect that food
supplements will relieve arthritis problems (49 percent), balance
cholesterol (47 percent), and reinforce the immune system (41 percent).
Magnesium, vitamin C, multi-vitamins, calcium, trace elements, beauty
supplements, and sleep aids are the most popular food supplements. Women
consume more food supplements than men (16 percent versus 6 percent).
Food supplement marketers target middle to upper income consumers,
primarily in Paris and the surrounding area.

[Growing trends]{.underline}: Food supplements for seniors are showing
strong growth. Preventative food supplements linked to age such as bone
mineral deficiency supplements saw sales increase 69 percent in 2006.
Also on the rise are food supplements aiding the immune system, as well
as those with cranberries.

[Distribution:]{.underline} Manufacturers have shifted their marketing
efforts away from supermarkets and have aggressively targeted pharmacies
and drugstores. Supermarkets lost market share in 2006, compared to 2005
(minus 2 percent).

# SECTION II. MARKET SECTOR OPPORTUNITIES AND THREATS

# 

## a. Entry Strategy:

To succeed in introducing new-to-market products, U.S. exporters must
have local representation and make personal contacts. Local
representatives can provide up-to-date information on business
practices, trade laws, sales leads, and marketing and distribution
strategies. Some local representatives are also importers and
distributors. The Office of Agricultural Affairs in Paris has listings
of potential importers and distributors.

Depending on products, U.S. exporters can penetrate the market through:

-   A central buying office

-   Specialized importers/distributors

The Office of Agricultural Affairs recommends that small-to-medium size
U.S. exporters work through importers/distributors familiar with central
buying offices which share the management and promotional costs of
positioning products in the market.

## b. Market Structure and Trends of the Five Distribution Circuits*:*

**Food Supplement Sales Amount per Distribution Channel in France**

+---------------------------+-----------------+------------+--------+---+
| **Distribution Channels** | **Amount of     | **Percent  | **P    |   |
|                           | Sales in 2006** | Change**   | ercent |   |
|                           |                 |            | Ch     |   |
|                           | **(in million   | **2        | ange** |   |
|                           | dollars)**      | 006/2005** |        |   |
|                           |                 |            | *      |   |
|                           |                 |            | *2006/ |   |
|                           |                 |            | 2004** |   |
+---------------------------+-----------------+------------+--------+---+
| Pharmacies                | 754             | +22        | +37    |   |
+---------------------------+-----------------+------------+--------+---+
| Specialized Stores        | 149             | -1         | -2     |   |
+---------------------------+-----------------+------------+--------+---+
| Supermarkets              | 122             | -2         | -1     |   |
+---------------------------+-----------------+------------+--------+---+
| Drugstores                | 102             | +9         | *      |   |
|                           |                 |            | *+**28 |   |
+---------------------------+-----------------+------------+--------+---+
| Other (mail order,        | 163             | **+**1     | +9     |   |
| e-commerce, direct sales) |                 |            |        |   |
+---------------------------+-----------------+------------+--------+---+

Source: IMS Health/Manufacturers Estimates/IRI Secodip

**Market Share of Food Supplement Distribution Channels in France**

![](media/image2.wmf)

**Pharmacies and Drugstores:**

Pharmacies and drugstores are the leading distributors of food
supplements in France with 66 percent market share and annual sales of
681 million Euros (\$856 million). There are approximately 22,000
pharmacies and drugstores in France, and with central buying offices
such as Giphar or Optipharm, they can buy products at more competitive
prices.

Most French consumers prefer to buy food supplements in these stores
where they can receive advice on product benefits, however, e-commerce
is also a growing source of food supplements. Other distributors, such
as hyper/supermarkets, specialized dietetic stores, sport and beauty
shops, have lost market share in the last two years.

**Major Food Supplement Sales in Pharmacies and Drugstores during CY
2006**

+-----------------------+-------------+---------------+---------------+
| **Food Supplements**  | **Total     | **Percentage  | **Percentage  |
|                       | Sales**     | Change**      | Change**      |
|                       |             |               |               |
|                       | **(in       | **2006/2005** | **2006/2004** |
|                       | million     |               |               |
|                       | dollars)**  |               |               |
+-----------------------+-------------+---------------+---------------+
| Weight loss           | 265         | +18           | +42           |
| supplements           |             |               |               |
+-----------------------+-------------+---------------+---------------+
| Tonic supplements     | 126         | +15           | +33           |
+-----------------------+-------------+---------------+---------------+
| Menopause supplements | 65          | -4.5          | -12           |
+-----------------------+-------------+---------------+---------------+
| Bone mineral          | 58          | +75           | +210          |
| supplements           |             |               |               |
+-----------------------+-------------+---------------+---------------+
| Stress & sedative     | 51          | +34           | +50           |
| supplements           |             |               |               |
+-----------------------+-------------+---------------+---------------+
| Hair, nails, teeth,   | 53          | +16           | +20           |
| supplements, etc.     |             |               |               |
+-----------------------+-------------+---------------+---------------+
| Skin supplements      | 51          | +7            | +13           |
+-----------------------+-------------+---------------+---------------+
| Sun supplements       | 48          | +8            | +14           |
+-----------------------+-------------+---------------+---------------+
| Opthalmology          | 44          | +27           | +88           |
| supplements           |             |               |               |
+-----------------------+-------------+---------------+---------------+
| Miscellaneous         | 95          | +25           | +49           |
+-----------------------+-------------+---------------+---------------+

Source: IMS Health

**Market Share of Major Food Supplements Sold in Pharmacies and
Drugstores**

![](media/image3.wmf)

Source: IMS Health

**Hyper/Supermarkets:**

Sales of food supplements in French hyper/supermarkets totaled 97
million Euros (\$122 million) in 2006. Natural based products, such as
plant extracts, herbal teas, vitamins and minerals and mixes of
different ingredients, are the most popular form of food supplements
sold in supermarkets. Supermarket sales of food supplements decreased
two percent in 2006, compared to 2005, due to the shift in promotion
strategy by manufacturers.

**Major Food Supplement Sales in Hyper/Supermarkets during CY 2006**

+---------------------------+------------+-------------+-------------+
| **Food Supplements**      | **Total    | *           | *           |
|                           | Sales**    | *Percentage | *Percentage |
|                           |            | Change**    | Change**    |
|                           | **(In      |             |             |
|                           | million    | **          | **          |
|                           | dollars)** | 2006/2005** | 2005/2004** |
+---------------------------+------------+-------------+-------------+
| Plants and natural        | 61         | -9          | -10         |
| ingredients, including    |            |             |             |
| herbal teas               |            |             |             |
+---------------------------+------------+-------------+-------------+
| Mix of different          | 36         | +16         | +38         |
| ingredients               |            |             |             |
+---------------------------+------------+-------------+-------------+
| Vitamins and minerals     | 24         | -5          | -15         |
+---------------------------+------------+-------------+-------------+
| **TOTAL**                 | **121**    | **-2**      | **-1**      |
+---------------------------+------------+-------------+-------------+

Source: IRI Secodip

**Market Share of Major Food Supplements Sold in Hyper/Supermarkets**

![](media/image4.wmf)

Source: IRI/Secodip

**Food Supplements Sales in Hyper/Supermarkets**

**by Major Categories**

+-----------------------------------------+----------------------------+
| **Food Supplement Category**            | **Total Sales**            |
|                                         |                            |
|                                         | **(In million dollars)**   |
+-----------------------------------------+----------------------------+
| Weight loss supplements                 | 49                         |
+-----------------------------------------+----------------------------+
| Tonic supplements                       | 33                         |
+-----------------------------------------+----------------------------+
| Digestion supplements                   | 10                         |
+-----------------------------------------+----------------------------+
| Beauty supplements                      | 10                         |
+-----------------------------------------+----------------------------+
| Circulatory supplements                 | 6                          |
+-----------------------------------------+----------------------------+
| Sun supplements                         | 5                          |
+-----------------------------------------+----------------------------+
| Sleep supplements                       | 4                          |
+-----------------------------------------+----------------------------+
| Senior/Menopose supplements             | 1.9                        |
+-----------------------------------------+----------------------------+
| General welfare supplements             | 1.9                        |
+-----------------------------------------+----------------------------+
| Others                                  | 1.2                        |
+-----------------------------------------+----------------------------+
| **TOTAL**                               | **122**                    |
+-----------------------------------------+----------------------------+

Source: IRI/Secodip

**Food Supplements Market Share in Hyper/Supermarkets**

**by Major Categories**

![](media/image5.wmf)

Source: IRI/Secodip

**Specialized Stores/Sport and Beauty Outlets:**

### 

Specialized stores, including sport and beauty shops, represent about
3,000 outlets, many of which are franchises. These stores accounted for
12 percent of the total market with estimated sales of 119 million Euros
(\$149 million) in 2006 with customers interested in dietetic, organic
and plant extract products.

### 

**E-commerce and mail sales:**

### 

Although there are no statistics available, sources estimate that mail
order and internet sales account for 13 percent of the total food
supplement market in 2006. This method of purchase is expected to
continue growing as a result of the increasing number of internet
websites selling food supplements.

# SECTION III. MAJOR COMPANIES IN THE FOOD SUPPLEMENT SECTOR 

# 

  -------------------- -------------------------------- -----------------------
  **Name of Operator** **Major Brands**                 **Distribution
                                                        Circuits**

  Laboratoire          Phyto Naturland and ExtraVine    Pharmacies/Drugstores
  Arkopharma           (plant extracts)                 and Supermarkets

  Laboratoire Oenobiol Oenobiol                         Pharmacies & Drugstores

  Laboratoire          Physcience                       Pharmacies & Drugstores
  Physcience                                            

  Sed (Laboratoire     Juvamine (vitamins), Juvaflorine Specialized Stores and
  Juva Santé)          (plant extracts) and Evert       Supermarkets

  Groupe Distriborg    Equilibrance/Vendomine/Ephytem & Supermarkets &
                       Evanea                           Specialized Stores

  Laboratoires Yves    Santé Naturelle                  Direct Sales
  Rocher                                                

  Léa-Institut Vital   Amphorm, Floressance,            Supermarkets,
                       Natessance, Natébio              Drugstores and
                                                        Specialized stores

  Laboratoire Pierre   Pierre Fabre Santé Furterer      Pharmacies & Drugstores
  Fabre                                                 

  Ponroy Santé Group   N/A                              Direct Sales,
  (Yves Ponroy &                                        Pharmacies &
  Biohamonyl/Nutri                                      Supermarkets
  Santé, Vitamonyl &                                    
  Vitathéra                                             

  Laboratoires Martin  Specialized in plant extracts    Pharmacies & Drugstores
  Privat               and vitamins                     and Specialized Stores

  Roche - R.C.H.       Minerals and vitamins (Santogan) Pharmacies

  Sandoz (nutrition et Cereal & Gerblé                  Supermarkets
  santé)                                                

  Laboratoire Inneov   Top line of firmless & hair      Pharmacies
  (joint venture       products                         
  between L\'Oréal and                                  
  Nestlé)                                               
  -------------------- -------------------------------- -----------------------

Source: AC/Nielsen Panel

In reaction to strong French consumer demand, large food industry
groups, such as Dannon and Nestlé, are increasing their investment in
the health food/supplement sector, resulting in a hybrid product between
food and medicine, called \"aliments-santé\" (functional foods). In
fact, recent mergers between pharmaceutical and food industries should
reinforce this development. For example, Inneov, a joint venture between
L\'Oréal and Nestle, is producing a line of body firming and hair
supplements sold uniquely in pharmacies.

# SECTION IV. COSTS AND PRICES 

# 

Research shows that consumers are willing to pay higher prices for food
supplements at a drugstore/pharmacy than at a grocery store. At prices
over \$7.00 per unit, the French consumer generally prefers to buy a
food supplement in a setting where consultations on products\' benefits
are available.

# 

# SECTION V. MARKET ACCESS 

# 

## Custom duties

Food supplements are classified under the harmonized system (HS) 21 06
9098. However, this classification may differ according to the
percentage of ingredients in the product. The French customs office is
responsible for determining the final classification of a product and
can be reached at the following address:

Direction Generale des Douanes

Bureau E-4

8, rue de la Tour des Dames

75436 Paris Cedex 09

Tel: (33-1) 55 07 46 55

Fax: (33-1) 55 07 48 60

Email: dg-e4@douane.finances.gouv.fr

Internet: www.douane.gouv.fr

## Regulations

**General Information:**

In an effort to harmonize the EU market for food supplements and similar
products, the European Union (EU) issued EU Directive 2002/46/EC, as
amended March 30, 2006 by EU Directive 2006/37/EC. These Directives
define food supplements, their composition, labeling, and detail the 13
vitamins and 15 minerals which can be used in manufacturing food
supplements. EU Directive 2002/46/EC, as amended, does not provide for
additional substances, such as amino and fatty acids, fibers, plants and
vegetable extracts, to be used in food supplements. These substances
continue to be regulated by various national decrees.

To transpose the EU Directives as well as various former French decrees,
France issued Decree 2006/352 on March 20, 2006. This decree includes
labeling, composition and sale notification of food supplements (see
paragraph below*).* Note that the French decree adopted the EU Directive
2002/46/EC and 2006/37/EC in total. France will recognize other Member
States' requirements on substances contained in food supplements not
included in this Directive. However, if the substance has never been
offered for sale in France, France retains the right to require a
pre-authorization review (see below French Decree 2006/352).

For additional information on EU directives on food supplements, herbal
medicines and dietetic foods, see the following website:
<http://www.europa.eu.int/>

**Vitamins and Minerals and other Substances Current Regulations:**

EU Directive 2002/46/EC, amended by Directive 2006/37/EC established a
list of vitamins and minerals permitted in food supplements, but did not
fix any maximum tolerance levels for the allowable additives. A
discussion paper was sent to each EU Member State with temporary limits
valid through September 2006. To date, the EU Commission has not
established maximum limits. However, a French decree of May 9, 2006 does
set tolerance levels (see below), making import into France more
difficult. If necessary, French food supplement manufacturers should be
able to provide laboratory data verifying the final composition of their
product.

Note that vitamins or minerals and other substances not listed in the EU
Directives may be authorized by EU Member States, including France, on a
case-by-case basis until December 31, 2009, provided the substance
contained in the food supplement was already sold in the European Union
prior to the issuance of EU directive 2002/46/EC, and that the EU Food
Safety Authority (EFSA) has not issued an unfavorable opinion on the
sale of the substance. In that case, a specific file needs to be
submitted by the Member State to the European Commission.

**French Decree 2006/352 Transposing EU Directives:**

If a food supplement has never been sold in France and is new to the
market, even if manufactured or already sold in another EU Member State,
the food supplement is subject to a declaration procedure through the
General Direction for Consumption, Competition and Frauds (DGCCRF) which
will authorize the sale of the food supplement. Potential importers
should contact DGCCRF at the following address:

Direction Générale de la Concurrence, de la Consommation et

de la Répression des Fraudes (DGCCRF)

Bureau Sécurité et Réseaux d\'Alerte - Télédoc 051

52, boulevard Vincent Auriol

75703 Paris Cedex 13

Tel; (33 1) 44 97 32 04

Fax: (33 1) 44 97 24 86

Contact: Marianne Dessen-Mugniot

Email: marianne.dessen-mugniot@dgccrf.finances.gouv.fr

**Labeling:**

Labels must be in French and include the following basic information:

-   Product definition

-   Shelf life

-   Precautionary information or usage instructions, if applicable

-   List of ingredients and their percentage relative to daily
    recommended allowance

-   Weights, volumes, etc., in metric units

-   Product's country of origin and name of importer or vendor within
    the EU

-   Manufacturer's lot or batch number

**Advertising, New Regulations for Nutritional and Health Claims:**

A food supplement is not a medicine and consequently advertising and
labeling should not indicate any curative or preventive properties. A
list of prohibited claims is listed in the official bulletin of the
General Direction for French Consumption, Competition and Fraud (DGCCRF)
of October 7, 1997.

Also, EU Regulation 2006/1924 on nutritional and health claims entered
into force July 1, 2007. This new regulation authorized nutritional and
health claims which may be used on food and food supplements.

**French Dietetic and Food Supplement Trade Association Concerns*:***

While vitamins and minerals are regulated at the EU level (they
represent approximately 30 percent of the total market for food
supplements), other ingredients such as fatty and amino acids, plants
and plant extracts, are still regulated by each Member State. For
plants, France has a list of 34 medicinal plants authorized for use in
food supplements.

**Authorized Maximum Daily Quantities for Vitamins and Minerals**

**As per French Decree of May 9, 2006**

1.  **Vitamins**:

Vitamin A: 800 pg

Vitamin D: 5 pg

Vitamin E: 30 mg (mg TE)

Vitamin K : 25 pg

Vitamin B1 : 4.2 mg

Vitamin B2 : 4.8 mg

Niacin (mg NE):

-   Nicotinic acid : 54 mg

-   Nicotinamide : 8 mg (mg NE)

Pantothenic acid : 18 mg

Vitamin B6: 2 mg

Folic acid: 200 pg

Vitamin B12: 3 pg

Biotin: 450 pg

Vitamin C: 180 mg

2.  **Minerals:**

Calcium: 800 mg

Magnesium: 300 mg

Iron: 14 mg

Copper: 2000 pg

Iodine: 150 pg

Zinc: 15 mg

Manganese: 3.5 mg

Sodium: *quantum satis* depending on the quantity brought by anions

Potassium: 80 mg

Selenium: 50 pg

Chromium: 25 pg

Mobybdenum: 150 pg

Fluoride: 0 mg

Chloride: *quantum satis* depending the quantity brought by cations

Phosphorous: 450 mg

[]{#__RefHeading___Toc183425262 .anchor}**SECTION VI. BEST PRODUCT
PROSPECTS**

# 

In supermarkets, the best selling products are plant extracts, herbal
teas and phyto-vitamins (a mix of plant extracts and vitamins). Despite
competition from French manufacturers, if imported products are of good
quality, reasonably priced with attractive packaging, they may find a
niche in the market if marketed effectively.

In pharmacies and drugstores, opportunities exist for U.S. exporters
carrying innovative products such as green mixtures (extracts of young
shoots of wheat, oat and barley) rich in vitamins and trace elements. In
addition, vitamin C, representing ten percent of the total market of
food supplements in supermarkets and 21 percent in pharmacies, is also
in demand. Other products such as fat blockers, dietetic meal
substitutes, laxative food supplements, and more generally all
supplements for seniors aimed at improving health (i.e., supplements for
bone mineral deficiency and stress, sedatives, and cranberry-base
products benefiting the genito-urinary system) represent strong product
prospects for U.S. suppliers offering high quality and innovative
packaging.

# SECTION VII. KEY CONTACTS AND FURTHER INFORMATION 

For further information contact:

Office of Agricultural Affairs

American Embassy

2, avenue Gabriel - 75382 Paris Cedex 08

Tel: (33-1) 43 12 2264

Fax: (33-1) 43 12 2662

Email: [agparis@usda.gov]{.underline}

Internet: [http://www.amb-usa.fr/fas/fas.htm]{.underline}

For more information on exporting U.S. food products to France, visit
our homepage.

Reports identified below are relevant and compliment information in this
report:

  ---------- ---------------- ----------------------------------------------------------
  **Report   **Name**         **Hot Link**
  Number**                    

  FR6064     Retail Food      <http://www.fas.usda.gov/gainfiles/200702/146280102.pdf>
             Sector           

  FR7023     Food &           <http://www.fas.usda.gov/gainfiles/200708/146291922.pdf>
             Agricultural     
             Import           
             Regulations &    
             Standards        

  FR7028     Exporter Guide   <http://www.fas.usda.gov/gainfiles/200710/146292590.pdf>

  E47056     Food &           <http://www.fas.usda.gov/gainfiles/200707/146291677.pdf>
             Agricultural     
             Import           
             Regulations &    
             Standards EU-27  

  E47090     Nutrition &      <http://www.fas.usda.gov/gainfiles/200710/146292645.pdf>
             Health Claims    
             Update           
  ---------- ---------------- ----------------------------------------------------------