The emerging European nutraceuticals

innovation system
A functional comparison with the United States nutraceuticals innovation system

Jef Pennings
Utrecht, June 2012
Master thesis Science & Innovation Management
Supervisors:
Prof. Dr. E.H.M. Moors
Dr. J.C.M. Farla

Acknowledgements
Writing my thesis would not have been possible without the support and feedback of several people.
First, I would like to thank my thesis supervisor Prof. Ellen Moors of Utrecht University. Her support
and feedback have been very important to me. Her insights and reflections have greatly contributed
to my work.
Second I would like to thank Dr. Jacco Farla for his willingness to be the second thesis supervisor and
investing his time.
Last, but certainly not least, I would like to thank all the interviewees for sharing their insights,
advice, and their opinions. Without their input I would not have gained the in-depth knowledge into
the European nutraceuticals industry. I would like to pay special gratitude to Roel Leerling for his
assistance and efforts that helped me to get in contact with central people in the European
nutraceuticals industry.

Let food be thy medicine, and medicine be thy food

Hippocrates (460370 BC)

Summary
Last decades the role of dietary active components in human nutrition has become an important
focus of research and has increased the awareness of consumers about diet and proper nutrition. A
new product category that has emerged from it is nutraceuticals. A nutraceutical is a food or a part
of a food with demonstrated safety and health benefits that go beyond the basic dietary needs and is
presented in a nonfood matrix or nonconventional food format. The last twenty years the global
nutraceuticals market has shown impressive growth rates and the global nutraceuticals industry is
nowadays a multi-billion dollar industry. However the European market is lagging behind in this
growth: where the global and United States (US) market grew over 10 fold over the period 1999
2006, the European market only grew 5 fold. Possible explanations that have been put forward for
this restricted growth are problems with consumer acceptance of nutraceuticals in Europe and the
European regulatory framework. These are both aspects of the European nutraceuticals innovation
system (IS). Accordingly, this study applies a technology specific innovation system (TIS) approach to
study the lagging behind in size and growth of the European nutraceuticals market compared to the
US and global nutraceuticals market.
The main research question of this study was: What are the strengths and weaknesses of the
emerging nutraceuticals innovation system in the European Union compared to the emerging
nutraceuticals innovation system in the United States over the period 1990 2011?. The structures
of the current European and US nutraceuticals IS have been described by mapping the actors groups,
institutions and networks involved in each IS. Also, dynamic analyses have been performed according
to the TIS approach. This TIS approach takes seven emergent properties (system functions) of a TIS
into account, including regulatory aspects and consumer acceptance, which is measured looking at
consumer skepticism. The TIS approach allows mapping these functions over time by building a
historical event database of activities relating to the TIS. To complement this data, various interviews
have been conducted. The more the seven system functions are fulfilled, the better the performance
of the TIS is expected to be, and the higher the chances for a successful development, diffusion, and
implementation of nutraceutical technology.
The results showed that from 1990 the main weakness of the European nutraceuticals IS was the lack
of European regulations regarding the use of health claims and thereby the lack of fulfillment of F4.
This resulted in the lack of the formation of one European market (F5) which caused F1:
entrepreneurial activity to lag behind. From 2000 the ongoing uncertainty about the future of the
European nutraceuticals market (F4) influenced investments in the nutraceutical industry and F6:
resource mobilization was lagging behind as well, which also negatively influenced entrepreneurial
activity (F1). In the US the opposite happens; in 1994 the Dietary Supplements Health and Education
Act (DSHEA) came into force which permitted the use of health claims on nutraceuticals in the US.
Accordingly F4 was fulfilled. As a result a market for nutraceuticals was created (F5) which stimulated
entrepreneurial activities (F1).
Another weakness of the European IS, and also the US nutraceuticals IS, was the lack of scientific
substantiation (F2) of many nutraceutical products, which encouraged consumer skepticism. In
Europe this was the result of the lack of a European Union inspection agency that could effectively
ban scientifically unsubstantiated products off the market. In the US this was the result of the DSHEA,
under which little scientific substantiation was required for the use of health claims on
nutraceuticals.
In 2006 Regulation (EC) 1924/2006 on the use of health claims changed the European nutraceuticals
market significantly. At first this new regulation created uncertainty in the industry, but when the
4

impact of this new regulation became clear uncertainty decreased and entrepreneurial activities (F1)
rose again. This regulation positively influenced F2: knowledge development and F5: market
formation by assuring a high level of scientific substantiation and creating one European market for
nutraceuticals. The high level of scientific substantiation reduced consumer skepticism regarding
nutraceuticals and positively influenced F7: creation of legitimacy / counteract resistance to change.
Therefore the new Regulation (EC) 1924/2006 can be regarded as the main strength of the European
nutraceuticals IS: it has opened the door to a scientifically grounded nutraceuticals market with
nutraceutical products that truly benefit consumers. However for this new regulation to be
successful it is necessary for the European Union to establish an inspection agency that can
effectively ban scientifically unsubstantiated nutraceutical products of the market. Furthermore the
individual European countries should have public relations agencies that provide consumers with
complete and unbiased information about nutraceuticals and their potential health benefits. This can
decrease consumer skepticism and increase consumer acceptance of nutraceuticals in Europe.

List of abbreviations and definitions

Abbreviations
ACE
ANA
CRN
DSHEA
EFSA
EHPM
ENA
ERNA
FDA
FIM
IADSA
IS
PCB
NIS
NPN
NREA
PASSCLAIM
PAHs
SIS
TIS

Angiotensin-Converting-Enzyme
American Nutraceutical Association
Council for Responsible Nutrition
Dietary Supplement Health and Education Act
European Food Safety Authority
European federation of associations of Health Product Manufacturers
European Nutraceutical Association
European Responsible Nutrition Alliance
Food and Drug Administration (United States)
Foundation for Innovation in Medicine
International Alliance of Dietary/Food Supplement Associations
Innovation System
Polychlorinated Biphenyl
National Innovation System
Natuur- & gezondheids Producten Nederland
Nutraceutical Research & Education Act
Process for the Assessment of Scientific Support for Claims on Foods
Polycyclic aromatic hydrocarbons
Sectoral Innovation System
Technological Innovation System

Definitions
Actor

Actors can be individuals but are more often organizations such as

firms, governmental organizations, non-governmental organizations,
venture capitalists, universities, research institutes, etc. (Markard and
Truffer, 2008; Edquist, 2005).

Borderline products

In the 1990s, nutraceuticals, and other new products arriving on the

market accompanied by health claims for which no regulatory
framework was established, were being referred to by the British
government as borderline products.

Dietary supplement

A dietary supplement is a product taken by mouth that contains a

"dietary ingredient" intended to supplement the diet (FDA.gov, 2012).
In the United States, nutraceuticals belong to the category dietary
supplements.

Food supplement

Concentrated sources of nutrients or other substances with a

nutritional or physiological effect whose purpose is to supplement the
normal diet (EU, 2012). In the European Union, nutraceuticals belong
to the category food supplements.

Infomercial

Infomercials are direct response informational television programs in

which information about a product is given and consumers have the
possibility to directly buy the product.

Innovation system

The network of institutions in the public and private sectors, whose

activities and interactions initiate, import, modify, and diffuse new
technologies (Freeman, 1987).

Institution

Institutions are the rules (regulations, legislations social, cultural and

technical norms, shared expectations etc.) that make up the rules of
the game (Markard and Truffer, 2008; Edquist, 2005).

Network

Networks link the actors and facilitate the transfer of tacit and explicit
knowledge, and other resources (Jacobsson and Johnson, 2000).

Nutraceutical

A nutraceutical is a food or a part of a food for oral administration

with demonstrated safety and health benefits beyond the basic
nutritional functions to supplement diet, presented in a nonfood
matrix or nonconventional food formats, in such a quantity that
exceeds those that could be obtained from normal foods and with
such frequency as required to realize such properties, and is labeled as
a nutraceutical.

Precautionary principle

The precautionary principle states that in case of absence of scientific

consensus whether an action or a policy might harm the public or
environment, the burden of proof that the action is not harmful falls
on those taking the action.

Structure/function claims

Structure/function claims describe the role of a nutrient or dietary

ingredient intended to affect the structure or function of the body.

Technological innovation
system

A technological innovation system is a set of networks of actors and

institutions that jointly interact in a specific technological field and
contribute to the generation, diffusion and utilization of variants of a
new technology and/or a new product (Markard and Truffer, 2008
p611).

Contents
Acknowledgements ............................................................................................................................. 2
Summary ............................................................................................................................................. 4
List of abbreviations and definitions ................................................................................................... 6
1.

Introduction............................................................................................................................... 10
1.1 Problem definition................................................................................................................... 10
1.2 Aim........................................................................................................................................... 11
1.3 Delineation .............................................................................................................................. 11
1.4 Research questions.................................................................................................................. 12
1.5 Scientific relevance .................................................................................................................. 12
1.6 Societal relevance.................................................................................................................... 12
1.7 Outline ..................................................................................................................................... 13

2.

Theory........................................................................................................................................ 14
2.1 Nutraceuticals an introduction ............................................................................................. 14
2.2 Innovation Systems ................................................................................................................. 15
2.3 Technological Innovation Systems .......................................................................................... 16
2.4 Functions of Innovation Systems ............................................................................................ 18

3.

Methodology ............................................................................................................................. 20
3.1 Research design ....................................................................................................................... 20
3.2 Operationalization ................................................................................................................... 20
3.3 Data collection ......................................................................................................................... 23
3.4 Data analysis ............................................................................................................................ 25
3.5 Validity and reliability .............................................................................................................. 26

4.

Results European nutraceuticals innovation system ................................................................ 28

4.1 European nutraceuticals innovation system ........................................................................... 28
4.2 Narrative European nutraceuticals innovation system 1990 2011 ...................................... 29
4.3 Results European nutraceuticals innovation system analysis per System Function ............... 34

5.

Results United States nutraceuticals innovation system .......................................................... 50

5.1 United States nutraceuticals innovation system ..................................................................... 50
5.2 Narrative United States nutraceuticals innovation system 1990 2011 ................................ 51
5.3 Results United States nutraceuticals innovation system analysis per System Function......... 55

6.

Case comparison EU and US nutraceuticals innovation system ............................................... 66

8

6.1 1990 1999: The early onset and the lack of regulations regarding nutraceuticals .............. 66
6.2 2000 2005: Optimism is taken over by uncertainty ............................................................. 68
6.3 2006 Present: Regulations ensure scientifically substantiated nutraceutical products ...... 71
7.

Conclusions................................................................................................................................ 76
7.1 Conclusions European and US nutraceutical innovation system analyses ............................. 76
7.2 Policy recommendations ......................................................................................................... 79

8.

Discussion .................................................................................................................................. 82

References ......................................................................................................................................... 88
List of tables and figures ................................................................................................................... 92
Appendix A: Interview questions European nutraceutical innovation system analysis ................... 93
Appendix B: References European nutraceuticals innovation system analysis (1990 2011) ......... 95
Appendix C: References United States nutraceuticals innovation system analysis (1990 2011)... 99
Appendix D: References comparison European nutraceuticals IS United States nutraceuticals IS
(1990 2011) .................................................................................................................................. 103
Appendix E: Historical event databases European nutraceuticals innovation system and US
nutraceuticals innovation system ................................................................................................... 104

1. Introduction
1.1 Problem definition
Last decades the role of dietary active components in human nutrition has become an important
focus of research and has increased the awareness of consumers about diet and proper nutrition. An
important product category that has emerged from this focus on dietary active components in
human nutrition is nutraceuticals. The term nutraceuticals was first introduced by DeFelice in 1989
and in 1994 DeFelice defined nutraceuticals as any substance that may be considered a food or part
of a food and provides medical or health benefits, including the prevention and treatment of
disease (DeFelice, 1994, p1). Since DeFelice has introduced the term nutraceuticals many different
definitions have followed. A recent study of Palthur et al. (2010, p25) has reviewed 25 different
definitions, took their central concepts, and has suggested one working definition:
A nutraceutical is a food or a part of a food for oral administration with demonstrated safety and
health benefits beyond the basic nutritional functions to supplement diet, presented in a nonfood
matrix or nonconventional food formats, in such a quantity that exceeds those that could be obtained
from normal foods and with such frequency as required to realize such properties, and is labeled as a
nutraceutical.

Coinciding with the emergence of nutraceuticals consumer demands have change considerably
towards food products that contribute directly to their health, with correspondingly high
expectations of consumers and the food industry as a result (Tewfik and Tewfik, 2008; Hsieh and
Ofori, 2007; Menrad, 2003; Mollet and Rowland, 2002). In the last twenty years the emerging
nutraceuticals technology has created a global market with impressive growth rates estimated
between 15% and 20% annually (Verbeke, 2005; Hilliam, 2000), with Japan, the United States (US),
and the European Union (EU) as major markets (global market share 39%, 31%, and 28% respectively,
Nutraingredients-usa.com, 2010). The global nutraceuticals market was estimated to be worth over
US $80 billion in 2008 and is estimated to be US $176,6 billion in 2013 (Ahmad et al., 2011; EU,
2008). Other estimations of the global market size of nutraceuticals range from US $70 billion to US
$250 billion annually, depending on the definitions of nutraceuticals used (Yeung et al., 2007).
Despite the global nutraceuticals market is expected to keep growing strongly (Ahmad et al., 2011;
Nutraingredients-usa.com, 2010; Ridinger, 2007), the European nutraceuticals market is lagging
behind in this growth (Nutraingredients-usa.com, 2010; Basu et al., 2007; Bech-Larsen and
Scholderer, 2007). Where the global market for nutraceuticals grew more than tenfold from US $5.7
billion to US $75.5 billion over the period 1999 2006, the European market for nutraceuticals grew
less than fivefold from US $1.8 billion to US $8 billion over the same period (Basu et al., 2007).
Extrapolating this data to the US market shows an estimated growth of the US nutraceuticals market
from US $2 billion to US $20 billion over the period 1999 2006. So the diffusion of nutraceuticals in
Europe is still low with market shares of less than 1% of the total foods and drinks market (Sir et al.
2008). An assessment by the European nutraceuticals industry even predicts a decrease of the size
European nutraceuticals market in Euros of 25% the coming two years due to the strict European
regulations on health claims (European Health Claims Alliance, 2010). The US market on the contrary
is the largest and most rapidly expanding nutraceuticals market in the world with an annual growth
rate of over 7% (nutritionaloutlook.com, 2011, Basu et al., 2007). In the US about two-thirds of the
population takes at least one type of nutraceutical health product (Ahmad et al., 2011).
10

The lagging behind in size and growth of the European nutraceuticals market has been studied
before by focusing on the influence of EU regulations on the European nutraceuticals market. These
studies found that firms that attempt enter the European nutraceuticals market encounter several
problems due to the lack of harmonized regulations that might hamper market access and/or their
innovation process (Gilsenan, 2011; Bech-Larsen and Scholderer, 2007; Yeung et al., 2007; Coppens
et al., 2006; Kwak and Jukes, 2001). Other studies have focused on consumer acceptance as a
possible explanation of the lagging behind in size and growth of the European nutraceuticals market
(Granato et al., 2010; Lhteenmki et al., 2010; Ares and Gmbaro, 2007; Verbeke, 2005; Menrad,
2003; Urala and Lhteenmki, 2003; Weststrate et al., 2002, among others). These studies linked the
acceptance of a specific functional ingredient of a nutraceutical to the consumers knowledge of the
health effects of the specific functional ingredients. Thus, functional ingredients that are on the
market for a longer period of time (e.g. vitamins, fiber, minerals like calcium, iron) achieve
considerably higher rates of consumer acceptance than ingredients which are used for a short period
of time (e.g. flavonoid, carotinoids, Omega-3 fatty acids) (Verbeke et al., 2009; Menrad, 2003).
Besides these studies highlighting specific problems of the European nutraceuticals industry, the
inadequate regulatory regime and the ambiguity regarding consumer acceptance also demonstrate
the emerging character of the European nutraceuticals industry; where existing technologies
generally have a set of institutions and regulations to support them (Hekkert et al., 2007), no
regulations have yet been established to support the emerging nutraceuticals technology. Also, in
order to develop well, a new technology has to become part of an incumbent regime, or it even has
to overthrow it (Hekkert et al., 2007). Therefore emerging technologies often encounter the
resistance to change from the incumbent regime. The lack of consumer acceptance illustrates such
resistance to change.
This emerging character is supported by the relative short time nutraceutical products have been on
the European market: the first nutraceutical products have only entered the European market in the
mid 90s (Menrad, 2003). Thus, previous studies have found specific problems (e.g. the regulatory
system, acceptance problems) and have made progress on the understanding of the lagging behind
in size and growth of the European nutraceuticals market. However, these problems have been
studied in isolation while they are part of a so-called emerging European nutraceuticals technology
specific innovation system. By taking the entire nutraceuticals innovation system into account, this
study creates a more comprehensive understanding of the development of the European
nutraceuticals Innovation System (IS) and its strengths and weaknesses.
1.2 Aim
The aim of this research is comparing the emerging European nutraceuticals innovation system with
the emerging US nutraceuticals innovation system to better understand the strengths and
weaknesses of the European nutraceuticals innovation system, as the US is the largest and most
rapidly expanding nutraceuticals market. This is done by mapping the development of the emerging
European and US nutraceuticals IS over time using the Technological Innovation System (TIS)
approach (Hekkert et al., 2007). Furthermore policy recommendations are given to overcome the
weaknesses of the European nutraceuticals IS.
1.3 Delineation
The European nutraceuticals market lags behind in size and growth compared to the US
nutraceuticals market. Since important aspects regarding this problem such as consumer acceptance

11

and regulations are characteristics of the European nutraceuticals IS, this study focuses on the
European nutraceuticals IS and compares it with the US nutraceuticals IS.
The term nutraceutical was coined in 1989, and in 1992 DeFelice noted that at that moment there
were no corporate structures that were capitalizing the new nutraceuticals market in the US
(DeFelice, 1992). In Europe, the first nutraceutical products have been launched in the mid 90s
(Menrad, 2003). Furthermore the term nutraceuticals first appears in the scientific database Scopus
in 1991 (Journal of Pharmacy Technology, 1991). Therefore the chosen timeframe of over which the
TIS analyses are performed is 1990 2011.
1.4 Research questions
The following research questions are used to study the strengths and weaknesses of the European
nutraceuticals IS and give policy recommendations to overcome the weaknesses of the European
nutraceuticals IS.
Research question 1:
What are the strengths and weaknesses of the emerging nutraceuticals innovation
system in the European Union compared to the emerging nutraceuticals innovation
system in the United States over the period 1990 2011?
Research question 2:
What recommendations can be given to policy makers in the European Union to
overcome the weaknesses of the emerging European nutraceuticals innovation system?
1.5 Scientific relevance
The main part of this study focuses on comparing the European and the US nutraceuticals IS with
each other in order to determine the strengths and weaknesses of the European nutraceuticals IS.
While these studies have made progress on the understanding of the low diffusion of nutraceuticals
in the EU on particular aspects (e.g. the regulatory system, acceptance problems), none of these
studies have taken an innovation systemic approach to study these problems. By mapping the
development of the emerging European nutraceuticals IS over time, this study creates a more
comprehensive understanding of the performance of the nutraceuticals TIS and its strengths and
weaknesses. More importantly, by applying the TIS approach this study contributes to innovation
theory by introducing the TIS approach in the life-sciences field. The life-sciences field is a specific
field with different characteristics compared to the energy sector, in which the TIS approach has
become an accepted tool for studying an emerging TIS (Van Alphen et al., 2009; Suurs, 2009; Negro
and Hekkert, 2008; Negro et al., 2008; Hekkert et al., 2007; Negro et al., 2007). Life-science industries
such as the nutraceuticals industry are often characterized by long development times, rigid
patenting laws, strict regulations and ethical issues. By taking this into account when applying the TIS
approach an example is set for future studies to apply the TIS approach in the life-sciences field.
1.6 Societal relevance
In its health strategy the European Union is committed to promoting healthy lifestyles by stimulating
healthy food choices (EU, 2011). By comparing the European nutraceuticals IS with the emerging US
nutraceuticals IS lessons can be learned that help to design recommendations to EU policy makers to
overcome the weaknesses of the European nutraceuticals innovation system. A better performing
European nutraceuticals IS can increase the health benefits of nutraceuticals to the European
citizens, for example by a higher diffusion of nutraceuticals in the EU or higher quality products.
12

Also, a better performing European nutraceuticals IS contributes to the competitiveness of European

nutraceutical firms. This will have a positive influence on economic activity within the EU and will
promote competitiveness of European nutraceutical firms on the global market.
1.7 Outline
Chapter 2 discusses the theoretical foundation of the study. The methodology is discussed in chapter
3. It represents the research design and the operationalization of the conceptual model. Next the
data collection, data analysis, and the validity and reliability of the study are discussed. Chapter 4
discusses the results of the analysis of the European nutraceuticals innovation system. Chapter 5
gives the results of the analysis of the US nutraceuticals innovation system. After these results have
been discussed the European and US nutraceuticals innovation systems are compared with each
other in chapter 6. Chapter 7: Conclusions gives the answers to the research questions and in chapter
8: Discussion gives a critical review of the study.

13

2. Theory
This study starts with analyses of the European and US nutraceuticals innovation systems. These
analyses are performed by applying a technology specific innovation system (TIS) approach. This
approach originated from innovation systems (IS) theory, which is discussed first. But before theory is
discussed, a general introduction in nutraceuticals is given to get a better understanding of what
nutraceuticals actually are.
2.1 Nutraceuticals an introduction
The increased knowledge on the relationship between nutrients and health has resulted in several
new products categories, such as Nutraceuticals. The word nutraceutical is a portmanteau of the
words nutrient and pharmaceutical, and the product category represents a unique intersection of the
pharmaceutical and food industries. The term was introduced in 1989 by Dr. DeFelice (DeFelice,
1994) and since then many different definitions have followed (Palthur et al., 2010). Due to their
overlap with foods and pharmaceuticals, nutraceuticals operate in a grey area. This is reflected in EU
and US regulations since both regions have no official definition of a nutraceutical. Especially in
Europe nutraceuticals have led to regulatory difficulties as authorities did not know whether to label
nutraceuticals as food or as pharmaceuticals (Menrad, 2003). Nowadays in the EU nutraceuticals fall
within the product category food supplements which are defined as concentrated sources of
nutrients or other substances with a nutritional or physiological effect whose purpose is to
supplement the normal diet (EU, 2012). In the US nutraceuticals fall within the product category
dietary supplements, which are defined as a product taken by mouth that contains a "dietary
ingredient" intended to supplement the diet (FDA.gov, 2012).
The definition of a nutraceutical used in this study in short: A nutraceutical is a food or a part of a
food with demonstrated safety and health benefits that go beyond the basic dietary needs and is
presented in a nonfood matrix or nonconventional food format. (for complete definition see
introduction). This definition clearly differentiates nutraceuticals from functional foods, another
product category that has emerged from the increased knowledge on the relationship between
nutrients and health. Where functional foods are considered products in a conventional food format
with added substances to promote a healthy state in an individual, a nutraceutical needs to be
presented in a nonfood matrix or nonconventional food formats (Palthur et al., 2010). The
relationship between food, functional food, nutraceuticals, and pharmaceuticals is represented in
Figure 2.1 (Dharti et al., 2010).

Figure 2.1 Relationship between food, functional food, nutraceuticals, and pharmaceuticals (Dharti et al., 2010, p34)

14

Since the early 1990s, the world has witnessed the explosive growth of a multimillion dollar
nutraceutical industry with a global growth from $5.7 billion to $75.5 billion over the period 1999
2006 (Verbeke, 2005). In the dynamic and evolving nutraceutical industry opportunities emerge from
various scientific disciplines, including genomics, proteomics, and metabolomics (Dureja et al., 2003).
The opportunities emerging from the new developments in these disciplines provide an interesting
growth market for companies from the food and pharmaceutical industry (Dureja et al., 2003).
Many nutraceuticals are being used as alternatives for both nutrition and medicine and seem
attractive because they do not require an appointment with a health care provider and are easily
available without a prescription (Dharti et al., 2010; Hilliam, 2000). Some examples of nutraceutical
products are fish oil capsules containing omega-3 fatty acids for their benefits against heart disease,
and antioxidant capsules and probiotic capsules to support the immune system. By providing such
nutrients, nutraceuticals can provide essential substances needed for a healthy diet, and can
supplement the diet with important nutrients in case of disease or the prevention of disease, thus
adding to a healthier life (Dharti et al., 2010). However, since they are not regulated as
pharmaceuticals and often do not undergo substantial scientific evaluation, their health benefits are
often questioned (Dharti et al., 2010; Espn et al., 2007).
Thus because of their position between food and pharmaceuticals, nutraceuticals have witnessed
regulatory difficulties and the EU and the US both have no definition for nutraceuticals. Also, despite
the explosive market growth, the health benefits of nutraceuticals are often questioned, and
nutraceuticals encounter problems regarding consumer acceptance (Granato et al., 2010;
Lhteenmki et al., 2010, among others). These issues are properties of the emerging nutraceuticals
innovation system. Accordingly, the theory of innovation systems is discussed in the next section.
2.2 Innovation Systems
The process through which technological innovations emerge are complex and characterized by
complicated feedback mechanisms and mutual interactions involving science, technology, learning,
production, policy, and demand (Edquist, 1997; Lundvall et al., 2002; Negro, 2007). Because of this
complexity, firms interact with other organizations in order to gain, develop, and exchange various
kinds of knowledge, information, and other resources (Negro, 2007). Thus, innovation is not an
isolated process but an interplay of actors in a certain context. This context is labeled as an
Innovation System (IS).
Freeman (1987) was the first to introduce the concept of innovation systems, which he defined as
the network of institutions in the public and private sectors, whose activities and interactions
initiate, import, modify, and diffuse new technologies. Later IS have been defined on different levels
of aggregation such as National Innovation Systems (NIS) (Lundvall, 1992), Sectoral Innovation
Systems (SIS) (Breschi and Malerba, 1997), and Technological Innovation Systems (TIS) (Nelson and
Nelson, 2002). Thus, the NIS focuses on the national level, the SIS on the sectoral level, whereas the
TIS uses a technology as a starting point and is not necessary limited to national boundaries or one
particular industrial branch.
A model of a NIS is represented in Figure 2.2 (Kuhlmann and Arnold, 2001). The NIS represents a
structural model of an IS and is used in this study to describe the current state of the European and
US nutraceuticals innovation system. Figure 2.2 shows several blocks that build up the innovation
system. The demand side is where demand for a product, technology, or innovation emerges. The
framework conditions of an IS contains the financial environment, taxation and incentives (subsidies),
15

propensity to innovation and entrepreneurship, and mobility (Kuhlmann and Arnold, 2001). These
make up the framework in which the actors within the IS have to operate. The political system
consists of the national and regional governments, the governance, and the research and
technological development policies. These have a profound influence on the framework conditions.
The political system also affects the education and research side since many of these institutes are
controlled by the government, such as universities and national research institutes. Furthermore, the
political system affects the infrastructure of the IS through research and technological development
policies that create intellectual property rights (IPR), standards and norms, and institutes that
support innovation. The infrastructures in its turn support the education and research side and the
industrial system in the development of technology and innovation. The industrial system consists of
the firms that operate within the IS and links with the Education and Research side, sometimes
supported by intermediary organizations.

Figure 2.2 A national innovation system model (Kuhlmann and Arnold, 2001)

2.3 Technological Innovation Systems

The theory on Technological Innovation Systems (TIS) is rooted in evolutionary economic theorizing
on socio-technical change and is part of the broader family of IS approaches such as NIS and SIS, as
described above (Markard and Worch, 2009). Since TIS theory uses a technology as a starting point, a
TIS can be national, regional, and international. Figure 2.3 shows the potential overlap of a
technological innovation system with national innovation systems and sectoral innovation systems
(Negro, 2007).

16

Figure 2.3 Potential overlap of technological innovation system within national and sectoral innovation systems (Negro,
2007, p27)

To study the nutraceuticals innovation system, the following definition of a technological innovation
system is adopted from Markard and Truffer (2008, p611):
A technological innovation system is a set of networks of actors and institutions that jointly interact in a
specific technological field and contribute to the generation, diffusion and utilization of variants of a
new technology and/or a new product.

Actors can be individuals but are more often organizations such as firms, governmental
organizations, non-governmental organizations, venture capitalists, universities, research institutes,
etc. (Markard and Truffer, 2008; Edquist, 2005).
Networks link the actors and facilitate the transfer of tacit and explicit knowledge, and other
resources (Jacobsson and Johnson, 2000).
Institutions are the rules (regulations, legislations social, cultural and technical norms, shared
expectations etc.) that make up the rules of the game (Markard and Truffer, 2008; Edquist, 2005).
Therefore institutions are said to be passive and actors active; institutions evolve and change as a
result of the effects of actors and the activities of actors (Markard and Worch, 2009).
A structural analysis according Figure 2.2 creates the first insight in the relevant actors, networks,
and institutions of the European and US nutraceuticals IS. However, insight in the present structure
of the nutraceuticals IS is not sufficient to understand the process of change and determine the TIS
strengths and weaknesses. To understand such process the dynamics of the IS need to be taken into
account. The dynamics are understood as the interaction between the activities that influence the
goal of the innovation system, where the goal is to contribute to the development and diffusion of
innovations (Hekkert and Negro, 2009; Hekkert et al., 2007). Because in a TIS the number of actors,
networks, and institutions is generally much smaller than in a NIS, complexity is reduced which
makes a dynamic analysis possible (Hekkert et al., 2007). The activities that contribute to the goal of
the innovation system (both positive and negative), are called functions of innovation systems.

17

2.4 Functions of Innovation Systems

In order to understand the dynamics of a TIS, the activities that take place within the system are
mapped, since the process of change is the result of many interrelated activities (Hekkert et al.,
2007). For this goal the TIS approach has been developed; it enables to study the dynamics and the
emergence of a new technology over time and enables to identify general patterns responsible for
the course of the emergence of a new technology, including success and failure of the innovation
system (Markard and Worch, 2009; Negro and Hekkert, 2008; Hekkert et al., 2007; Negro et al.,
2007). The strength of the TIS approach lies in the focus on the system level as the core unit of
analysis (Suurs and Hekkert, 2009; Hekkert et al., 2007). Since a TIS is not restricted by geographical
and sectoral dimensions, the advantages of using the system level (meso-level) and a specific
technology as a starting point are that it cuts through both the geographical and the sectoral
dimensions (Hekkert et al., 2007, p416). Furthermore the TIS approach differentiates from other
innovation system approaches by analyzing an emerging TIS rather than a mature TIS (Negro, 2007).
The TIS approach uses the central concept of System Functions of which seven are discerned. These
System Functions are emergent properties of the interplay between actors and institutions (Hekkert
et al., 2007; Negro et al., 2007). The more the seven System Functions are fulfilled, the better the
performance of the TIS is expected to be, and the higher the chances for successful development,
diffusion, and implementation of the new technology (Negro et al., 2008). Ultimately, TIS
performance is measured by the market size of nutraceuticals. The seven System Functions are
described below.
Function 1: entrepreneurial activities
Entrepreneurial activities are essential for an IS because without entrepreneurs there would be no
innovation and the innovation system would simply not exist (Negro, 2007). These are activities in
which the potential of new knowledge, networks and markets is converted into actions which will
generate new business opportunities (Hekkert et al., 2007). These activities are most commonly
performed by new entrants or already existing firms that diversify their business strategy to take
advantage of new developments in knowledge, networks, and markets (Hekkert et al., 2007).
Uncertainty is inherent with entrepreneurial activities and many forms of learning take place.
According to their essential role in innovation and the IS, entrepreneurial activities are the most
important indicator for the performance of an IS. When entrepreneurial activities lag behind, causes
may be found in the other six functions (Hekkert et al., 2007).
Function 2: knowledge development
The development of knowledge is essential for any innovation process. Therefore R&D and
knowledge development are essential within the innovation system (Hekkert et al., 2007). R&D
activities are often performed by researchers but other actors can also be responsible for knowledge
development (Suurs, 2009).
Function 3: knowledge diffusion
The role of networks is the exchange of information (Suurs, 2009). Adequate knowledge diffusion
helps policy decisions to be consistent with the latest technological insights and R&D agendas to be
affected by changing norms and values (Hekkert et al., 2007).

18

Function 4: guidance of the search

Guidance of the search is an important activity and represents the process of selection. It can be
seen as the activities that positively affect the visibility and the clarity of the specific needs among
technology users (Hekkert and Negro, 2009). Guidance of the search involves numerous actors, such
as governments, technology users, and technology producers, in which the technology itself is a
variable instead of a constant (Hekkert et al., 2007).
Function 5: market formation
New technologies often struggle to compete with existing technologies because the new technology
is still in the development phase and not yet well adapted to existing standards and the functions it
has to perform. Therefore diffusion will be slow (Hekkert et al., 2007). A protected space for new
technologies can overcome this, and can be created by temporary niche markets, favorable tax
regimes or minimal consumption quotes, and activities in the sphere of public policies (Hekkert and
Negro, 2007).
Function 6: resources mobilization
The input of resources, both financial and human capital, is necessary for all activities within the
innovation system and for a specific technology. For a specific technology, the input of resources is
necessary to create knowledge (Hekkert et al., 2007).
Function 7: creation of legitimacy / counteract resistance to change
For a technology to develop well, it is necessary to fit into existing regimes or to replace existing
regimes. Because of opposition from existing regimes, replacement of existing regimes can be
catalyzed by advocacy coalitions (Hekkert et al., 2007).
It can be stated that Functions 2 to 7 support Function 1: entrepreneurial activity; Functions 2 to 7
create the right climate for entrepreneurial activities to flourish (Negro, 2007). However the
combination of all System Functions leads to system performance, and thus the fulfillment of all
System Functions is essential for system performance.
To summarize, a structural analysis of the nutraceuticals IS according the NIS model and a dynamic
analysis of the nutraceuticals IS according the TIS approach for both Europe and the US is made. The
structural analysis enables an overview of the current state of the nutraceuticals IS and the dynamic
analysis enables to study the dynamics and the emergence of the nutraceuticals IS. By comparing the
results of the analyses of the European and the US nutraceuticals IS, it is possible to determine the
strengths and weaknesses of the European nutraceuticals IS.

19

3. Methodology
This chapter will discuss the methods used to determine the strengths and weaknesses of the
European nutraceuticals innovation system (IS) and to answer the two research questions. First the
research design is discussed. It gives a general outline of the performed research methods. Next the
operationalization of the System Functions is given. After the operationalization, the data collection
methods are discussed, and next the data analysis is discussed. Lastly the validity and reliability of
the used methods is discussed.
3.1 Research design
To answer the two research questions, first a structural and then a functional analysis of the
European and the US nutraceuticals IS is carried out. The structural analysis gives a static description
of the European and the US nutraceuticals IS according Figure 2.2 (p. 12). The TIS approach gives a
dynamic description of the European and US nutraceuticals IS by performing a functional analysis by
mapping the System Functions over time using a database of events (Hekkert et al., 2007). Also,
semi-structured interviews are conducted to gain in depth information in the European
nutraceuticals IS and to verify results of the historical event database analysis. By applying the TIS
approach on the case of the European nutraceuticals IS the regulatory and acceptance problems
regarding nutraceuticals in Europe are studied not in isolation but in relation to the entire TIS.
This study is an explorative research that uses a comparative case study to answer the research
questions. Studying more than one case helps to establish relationships within the IS and creates
more insight into the strength and weaknesses of the European nutraceuticals IS. For this comparison
a qualitative research design is used; the TIS approach (Hekkert et al., 2007).
The analyses are meso-level analyses where the European and US nutraceuticals IS are the unit of
analysis. The cases of the European and US nutraceuticals IS are being compared with each other.
Although the US nutraceuticals IS is analyzed as well, the majority of the research is focused on the
European nutraceuticals IS; the aim is to better understand the strengths and weaknesses of the
European nutraceuticals IS. The case of the US nutraceuticals IS has been chosen as comparison with
the European nutraceuticals IS because both are the most important world markets, next to Japan
(Nutraingredients-usa.com, 2010). Because data on the US nutraceuticals IS is more accessible, using
the US as comparative case gives an advantage over Japan. Also the US market is the largest and
most rapidly expanding market of the world, in contrast to the European nutraceuticals market
which lags behind in size and growth compared to the US and world nutraceuticals market
(nutritionaloutlook.com, 2011, Basu et al., 2007).
3.2 Operationalization
The main part of this study consists of the analyses of the European and the US nutraceuticals IS
according the TIS approach. Each of the System Functions is operationalized in various indicators
based on the work of Hekkert et al. (2007) and Negro et al. (2008). Each of these indicators is
represented by an event category. An indicator can either have a positive (+1) or negative (-1)
contribution to the fulfillment of the System Function. Every single event from the event database is
assigned to one event category and will get a +1 or -1 score. The scores are not weighted because
their influence on the innovation system is unknown beforehand. The scores of all indicators within a
System Function combined lead to an end score per year for each System Function. The results of the
operationalization of the System Functions are given in Table 2.

20

Function 1: entrepreneurial activities

The essence of entrepreneurial activities is to convert knowledge into business. Indicators to
measure entrepreneurial activities are the number of new entrants, the number of diversification
activities of incumbent actors (Hekkert et al., 2007). Accordingly the number of nutraceutical
development projects started by new entrant and the number of projects started by incumbent
actors are counted. Additionally the number of projects terminated regarding the development of
nutraceuticals is counted.
Function 2: knowledge development
Knowledge development is essential for any innovation process (Hekkert and Negro, 2009).
Accompanying activities include investments in R&D projects, the number of patents on
nutraceuticals, and scientific research papers written on the subject of nutraceuticals (Suurs, 2009).
Investments in R&D on nutraceuticals are assigned to Function 6: resources mobilization since
initially this is the investment of a resource; no knowledge has been developed yet. The
measurement of this System Function is therefore limited to the number of patents regarding to
nutraceuticals and the number of scientific research papers published on the subject of
nutraceuticals.
Function 3: knowledge diffusion
The role of this System Function is the exchange of information. The exchange of information occurs
when actors in the nutraceuticals IS interact with each other. But not all interactions between the
actors can be measured and not all of the interactions are relevant. The most relevant interactions
between actors are meetings of professionals such as workshops, conferences or annual meetings,
and coalitions between actors within the TIS (Suurs, 2009). Furthermore knowledge spillover occurs
when mergers and acquisitions take place. Accordingly mergers and acquisitions are included as well.
Function 4: guidance of the search
Guidance of the search provides clarity about consumer needs and technological possibilities
(Hekkert and Negro, 2009). Expectations expressed in scientific literature and newspapers are used
as an indicator to map the state of the debate and measure the positive and negative expectations.
Also expressed positive expectations and expressed negative expectations towards regulations are
used as an indicator of Function 4.
Function 5: market formation
Market formation is about creating a protected space for the emerging technology in which it can
develop (Hekkert and Negro, 2009). Niche markets provide such a protected space and are used as
an indicator of market formation. An important factor to influence the creation of a market for
nutraceuticals is market approval or ban of nutraceuticals by governments and the approval or ban
of health claims by governments. Accordingly market approval and ban of nutraceuticals will be used
as an indicator, and the approval or restriction on health claims on nutraceutical products will be
used as an indicator of Function 5.
Function 6: resources mobilization
Resources are an essential input for all activities within the IS (Hekkert and Negro, 2009). Indicators
for the fulfillment of Function 6 are (R&D) investments and subsidy programs in nutraceutical
technology by governments, companies, and other organizations. Firms also collect money by the
21

issue of shares. Accordingly this is used as an indicator as well. Also an indicator is the expression of a
lack of financial support by actors in the nutraceuticals IS.
Function 7: creation of legitimacy / counteract resistance to change
New technologies often encounter resistance from existing technologies or lobbying groups.
Therefore legitimacy for the technology needs to be created. Indicators to measure the resistance
and the creation of legitimacy are lobbying activities in favor of, and against nutraceuticals, and
expressed positive and expressed negative sentiment towards nutraceuticals. Furthermore, since
previous studies found that the European nutraceuticals industry encountered acceptance problems
of consumers (Granato et al., 2010; Lhteenmki et al., 2010; Ares and Gmbaro, 2007; Verbeke,
2005), this study includes consumer skepticism as an indicator of Function 7. Expressed negative
sentiment towards nutraceuticals will not take positive or negative expectations towards regulations
into account since this is an indicator of Function 4: guidance of the search.
Performance of nutraceuticals innovation system
The development of the performance of the nutraceuticals innovation system is measured according
the market size of nutraceuticals in Euros or US $ per year. The size of the nutraceuticals market
reflects the extent to which consumers adopt and use nutraceutical technology. Accordingly size of
the nutraceuticals market reflects the performance of the nutraceuticals IS.
Table 3.1: Operationalization of the system functions (based on Negro et al., 2008)
Function
Function 1:
Entrepreneurial activities
Function 2:
Knowledge development
Function 3:
Knowledge diffusion
Function 4:
Guidance of the search

Function 5:
Market formation

Function 6:
Resources mobilization

Function 7:
Creation of legitimacy /
counteract resistance to
change
Performance of the
innovation system

Activity
Nutraceutical projects started by new entrants
Nutraceutical projects started by existing firms
Nutraceutical projects /firm stopped, not completed
Patents for nutraceuticals
Scientific research articles
Workshops, Conferences, meetings
Mergers
Coalitions, network formation
Sources raising positive expectations about nutraceuticals
Positive expectations towards regulations
Sources raising negative expectations about nutraceuticals
Negative expectations towards regulations
Creation of niche markets for nutraceuticals
Market approval
Lack of niche incentives
Restriction on claims/ban on nutraceuticals
(R&D) investments by companies
(R&D) investments by governments
(R&D) subsidies by organizations
Firm collects money by the issue of shares
Expressed lack of financial support
Lobbying actions in favor of nutraceuticals
Positive sentiment towards nutraceuticals
Lobbying actions against nutraceuticals
Negative sentiment towards nutraceutical industry
Consumer skepticism
Market size in Euros of nutraceuticals per year

22

Sign
+1
+1
-1
+1
+1
+1
+1
+1
+1
+1
-1
-1
+1
+1
-1
-1
+1
+1
+1
+1
-1
+1
+1
-1
-1
-1

3.3 Data collection

For the structural and TIS analysis of the European and the US nutraceuticals IS are two
corresponding historical event databases were built. This method was developed Poole et al. (2000)
and Van de Ven et al. (2000), and was refined by Negro et al. (2008) to be applied on a technological
system level. The aim was to retrieve as many historical events relating to each nutraceuticals IS as
possible. The retrieved events are listed chronologically in the database and receive a corresponding
event number. Each event is listed with a reference to the original document and a description of the
event. The events in the database can then be assigned to an event category within one of the
System Functions in order to analyze the development of the nutraceuticals IS over time.
Before performing the structural and TIS analyses one exploratory interview was conducted with a
manager/scientist with over 10 years of experience in the European nutraceuticals industry. This
interview helped to create first insights in the European nutraceuticals industry, added to the
understanding of the problems in the European nutraceuticals industry and helped to refine the
operationalization.
Data for the historical event databases was collected by searching the LexisNexis database over the
period 1990 2011 for events related to the nutraceutical sector. For the European nutraceuticals IS
the search term used was nutraceutical, the geographical location was set on the European Union.
The same procedure was followed for collecting data on the US nutraceuticals IS. The search term
used was nutraceutical and the geographical location was set on the United States. This resulted in
over 7.000 articles for the European nutraceuticals historical event database and over 10.000 articles
that needed to be analyzed for the US nutraceuticals historical event database. Due to time
constraints it was needed to narrow down the amount of data to be analyzed. To keep the amount of
data manageable but reduce the chance to miss out on important events the sources searched were
limited to European news. The results were then narrowed down by selecting nutraceuticals under
the header markets. For the US the sources searched were limited to US news. Also for the US the
results were narrowed down by selecting nutraceuticals under the header markets. This yielded
4855 newspaper articles and press releases relating to the European nutraceuticals IS and 3799
newspaper articles and press releases relating to the US nutraceuticals IS. Thus, a more manageable
amount of a total of about 9000 articles was retrieved for the European and US nutraceuticals IS
together. All data retrieved was then going to be screened for events that were going to be assigned
to an event category within one of the System Functions and to be added to the historical event
database. The effect of narrowing down the results to the nutraceuticals market was that the domain
of the study was narrowed down nutraceuticals market as well.
The scores for the event categories patents and scientific research articles within Function 2:
knowledge development, have been obtained differently. For Europe the score for patents have
been obtained by searching the Scopus database for patents registered at the European Patent
Office (EPO) over the period 1990 2011 containing the word nutraceutical. For each year the
number of patents published at the EPO has been counted and a score per year for the number of
patents has been given. This score has been included in the historical event database. The same has
been done to obtain the score for patents in the US nutraceuticals IS, only then the patents published
at the US patent office were counted.
The score for scientific research articles has been obtained by searching the Scopus database for
articles containing the word nutraceutical over the period 1990 2011. These results have been
refined by selecting either the European countries or by selecting US under the header Country.
23

For each year the number of scientific research papers available at the Scopus database has been
counted which gave a score per year for the number of scientific research papers published. This
score has been included in the historical event database.
The performance of the European nutraceuticals IS and the US nutraceuticals IS has been measured
according the market size of nutraceuticals per year ( or US $). Little data on both the European and
the US nutraceuticals market size was publicly available. This data has been retrieved from press
releases that reported data from Datamonitor and Euromonitor, and from scientific research papers
that mentioned data on the market size of nutraceuticals in Europe and the US. Datamonitor and
Euromonitor are independent research institutes and do not publish results; their data is only
available on payment.
Furthermore, semi-structured interviews were conducted with experts in the field. Semi-structured
interviews have the advantage that they can evoke answers that are unanticipated by the researcher
and rich and explanatory in nature (FHI260.org, 2012). The interviews were conducted because these
play an important role in gaining in-depth information from the actors and in verifying the results of
the analysis of the European nutraceuticals IS. The interviews created insights in the perspectives of
the different actor groups and unravel their underlying assumptions and motives regarding to
nutraceutical technology. Furthermore, by discussing the results of the structural and dynamic
analyses the interviews allowed to verify whether the interpretations of the data and the
interpretations of the dynamics between the System Functions were sound. Altogether the
interviews allowed to triangulate the date and played an important role in the understanding of the
development of the European nutraceuticals IS.
The experts have been selected in such a way that, according to the structural representation of the
innovation system (Figure 2.2), the demand, industrial system, education and research,
intermediaries, and political system are all represented in the interviews. A total of 19 interview
invitations had been sent to actors within the European nutraceuticals IS. 10 invitations had been
sent to actors in the industrial system, 4 to actors from education and research, 3 to actors from the
government, 1 to an intermediary organization, and 1 to an actor on the demand side. 8 European
actors responded and were willing to be interviewed. To verify the results of the US nutraceuticals IS
analysis a total of 15 interview invitations had been sent to actors in the US nutraceuticals IS.
Unfortunately none of these US actors was willing to be interviewed. Table 3.2 shows the role of the
interviewed experts in the European nutraceuticals IS. On request the interview data has been
anonymized.
The interviews have been conducted face to face and have been recorded. The subjects that have
been discussed during the interviews are: the role and responsibility of the interviewee in the
nutraceuticals IS, the structural description of the nutraceuticals IS (its actors, relations, missing
blocks), and each System Function. During the discussion of each System Function ambiguities from
the dynamic analysis were discussed as well as important properties of the System Function. For
example, for Function 1 the business climate was discussed and for Function 4 the relevant
regulations and their impact on the industry were discussed. At the end of the interview the
interviewee was asked for his opinion on the strong points and the weak points of the innovation
system, and the future opportunities of the industry. The complete list of interview questions can be
found in Appendix A.

24

Table 3.2: Interviews European nutraceuticals IS

Interview
Date interview
Role within the European nutraceuticals IS
number
IV 1
22-11-2011
Secretary at Dutch Nutraceutical Association
IV 2
25-1-2012
General director at food and nutrition innovation support program
IV 3
26-1-2012
President at pro-biotic food supplement manufacturer
Board president at food and nutrition innovation support program
Board member at Dutch industry organization for nature and
health products
IV 4
30-1-2012
Director at Dutch industry organization for nature and health
products
IV 5
6-2-2012
Scientist food safety at Dutch inspection agency
IV 6
15-3-2012
Manager science and quality, specialist food safety, nutrition and
health at the Netherlands Nutrition Center
IV 7
23-2-2012
Professor food science in the Netherlands
IV 8
21-3-2012
Professor/director at Utrecht University + Danone-research
3.4 Data analysis
The following analysis has been performed on the European and US historical event database
separately. All the gathered data from the LexisNexis database has been scanned for events. Every
event found has been assigned to one event category of the operationalization of the System
Function and has been given a +1 (positive) or a 1 (negative) score, according to the positive or
negative contribution of the event category to the IS. The single events were not weighted since the
importance of an event was not known beforehand. Several events, such as endorsement practices,
were difficult to assign to one of the event categories because of ambiguity; there was overlap with
more than one event category. After assigning all events to one of the event categories, the
ambiguous events were reviewed and assigned to the most appropriate System Function. In case of
endorsement practices this was Function 7: creation of legitimacy / counteract resistance to change.
The assigning of the events to the event categories resulted in an end score for every event category.
All scores of the event categories within a System Function together resulted in a final score for each
System Function per year. For each of the seven System Functions a graph has been plotted in that
showed how the fulfillment of the System Function developed over time. The results on performance
of the IS system for EU and the US respectively were given in a table instead of in a graph.
Next the interviews were conducted and analyzed by writing down the entire interview using the
recording. The interview was then sent to the interviewee to determine whether the answers had
been interpreted correctly and to correct possible errors.
After the interviews were conducted the results could be written. First the results of the structural
analyses of the nutraceuticals IS were writing by using the interview data and the data of the
historical event database. This gave an overview of the current state of the nutraceuticals IS.
Second, a narrative was created of the development of the nutraceuticals IS over the period 1990
2011. The interview data and the descriptions of the events in the historical event database enabled
to create a detailed reconstruction of the development of the nutraceuticals IS from 1990 2011.
Additionally to give a graphical representation of how the nutraceuticals IS had developed over the
period 1990 2011, a graphical timeline of the most important events in the development of the
nutraceuticals IS was created.

25

Third, the scores of the fulfillment of each System Function per year, the interview data, and the
descriptions of the events in the historical event database enabled to create a detailed description of
the fulfillment of each of the System Functions.
And lastly, to compare the European nutraceuticals IS and the US nutraceuticals IS, the results of the
structural analysis, the narrative, and the fulfillment of the System Functions have been used. These
results have created insights in what the important events in each TIS were that have shaped the TIS.
These insights made it possible to compare the development of both TIS and identify the strengths
and weaknesses of each TIS.
3.5 Validity and reliability
In order to ensure research quality it is important to meet certain requirements from a
methodological point of view. Four criteria are commonly used to assess the quality of field research:
construct validity, internal validity, external validity, and reliability.
Construct validity refers to the quality of the operational measures of the concepts being studied (Yin
2003). Two ways of increasing construct validity are using multiple source of evidence (source
triangulation), and adopting different angles from which to look at the phenomenon at hand
(investigator triangulation) (Yin, 2003; Eisenhardt, 1989). First, an exploratory interview helped to
refine the operationalization, which increases the construct validity. Second, by using multiple
sources of evidence such as press releases and expert interviews, the data has been triangulated,
which also increases the construct validity. And last, by analyzing the results of the structural
analysis, the narrative, and the fulfillment of the System Functions, different angles on the data are
created, which also increases the construct validity.
Internal validity refers to whether causal relationships can be established between variables and
results (Yin, 2009). The internal validity in case studies is often problematic but can be increased by a
clear research framework, pattern matching techniques, and rival explanations (theory triangulation)
(Yin, 2003; Eisenhardt, 1989). Conducting an exploratory interview increases the internal validity by
facilitating the designing of the research and refining the operationalization. Also validating the data
by conducting expert interviews increases the internal validity. Furthermore, by mapping events over
time, the fulfillment of each System Function over time can be verified over time. Since events
between the different System functions are related to each other in time, event sequences can be
observed and thereby the interactions between System Function (Suurs, 2009)
External validity or generalizability refers to the domain to which the results of this study can be
generalized (Yin, 2009). Because this research uses a case study design and applies to a specific
technological innovation system, the external validity is difficult to establish (Yin, 2009). By
comparing the cases of the European and US nutraceuticals IS with each other the generalizability is
increased.
Reliability refers to demonstrating that the operations of a study can be repeated with the same
results (Yin, 2009). Transparency through good documentation and clarification of research
procedures and replication through a case study database ensure sufficient reliability (Eisenhardt
1989). By carefully documenting the process of data collection and data analysis this study is assured
of a high level of reliability. Additionally, all data has been saved and the interviews have been
recorded in order for other researchers to be able to view the data.
26

27

4. Results European nutraceuticals innovation system

This chapter provides the results of the analysis of the European nutraceuticals innovation system
(IS) over the period 1990 2011. A total of 555 events were found and 8 interviews have been
conducted. The results start with a structural analysis of the current European nutraceuticals IS
according the innovation system framework of Kuhlman and Arnold (2001). Second a narrative is
given showing the development of the European nutraceuticals IS. Third the fulfillment of each
System Function is discussed separately. The references of the narrative of the European
nutraceuticals IS and the references of the fulfillment of the System Functions of the European
nutraceuticals IS can be found in Appendix B. This is done because adding the vast amount of
references of the European nutraceuticals IS analysis amongst the general references would strongly
decrease the searchability of all the references of the research. The historical event database can be
found in an enclosed CD-ROM in Appendix E.
4.1 European nutraceuticals innovation system
Figure 4.1 (based on Kuhlmann and Arnold, 2001) gives a graphical representation of the European
nutraceuticals innovation system. The several blocks within the picture describe the components of
the European nutraceuticals IS. It needs to be noted that it is a simplified model that does not take
the differences between the national nutraceutical innovation systems of the European Union
member states into account. In the past the European nutraceuticals IS was fragmented consisting of
different national nutraceuticals IS with their own political system, market, and demand. With the
introduction of Regulation (EC) 1924/2006 on nutrition and health claims made on foods this
significantly changed and one European market for nutraceuticals was created (IV4, Eurlex.europa.eu (2), 2012).

Figure 4.1 A structural framework of the European nutraceutical innovation system model (based on Kuhlmann and Arnold,
2001)

28

In the current European nutraceuticals IS the main actors in the industrial system are small firms that
only produce nutraceutical products. The largest product categories are fish oil supplements and
probiotics (European Health Claims Alliance, 2010). Besides the generally small life-science firms,
larger firms originating from pharmaceutical and food industries are getting more involved in the
nutraceuticals industry. Pharmaceutical companies are being attracted to the nutraceutical sector by
the shorter development times and lower product development costs, and having expertise in
organizing clinical trials to scientifically substantiate health claims. Food companies are being
attracted to the nutraceuticals sector by having expertise in developing and marketing high quality
food products (Menrad, 2000; Menrad, 2003). Some large players in the field are Nestl, Danone,
and Novartis.
On the demand side the main actors are end users. Another actor group on the demand side is health
stores that buy nutraceuticals from producers and sell these products under their private label.
On the education and research side the main actors are Universities such as Wageningen University
(WU) in the Netherlands. WU has a large influence on the knowledge on the relation between
nutrition and health. Research departments of large companies also conduct research on
nutraceuticals and the relation between nutrition and health in order to develop nutraceutical
products. Smaller companies conduct little research because of the high costs involved.
The main actors in the political system in the past have been national governments. Nowadays
however the EU has become increasingly important by building the institutions through regulations
that influence the framework conditions and infrastructure. On the European level The European
Food Safety Authority (EFSA) assesses whether and how national authorities comply with the
regulations set by the European Commission, and intervenes when necessary. National inspection
agencies monitor the national markets.
The framework conditions are largely set on European level. In European law nutraceuticals are
labeled as food supplements. The most important regulations on European level that control
nutraceuticals are Directive 2002/46/EC, which establishes harmonized rules for the labeling of food
supplements and introduces specific rules on vitamins and minerals in food supplements (Eurlex.europa.eu, 2012), Regulation (EC) 1924/2006 on nutrition and health claims made on foods (Eurlex.europa.eu (2), 2012) and Regulation (EC) 258/97 on novel foods (Ec.europa.eu, 2012).
4.2 Narrative European nutraceuticals innovation system 1990 2011
The first proposal for a Directive on claims on food and food supplements circulated in the European
Union in 1980 (Nutraceuticals International, 1-8-2002). Because agreement could not be reached the
proposal was dropped and food and food supplements (including nutraceuticals) became subject to
national regulations. In 1992, after several revisions, the proposal was resurrected but again it was
dropped because the European Commission (EC) could not agree on its content (Nutraceuticals
International, 1-8-2002). In 1993 Sweden was one of the first countries with regulations to control
nutraceuticals (Nutraceuticals International, 1-7-1993).
In 1995 the first studies and patents regarding nutraceuticals showed up. The first research
publication related to the role of omega-3 and omega-6 fatty acids in proper nervous system and
visual functions, and the possible use of omega-3 and omega-6 fatty acids in nutraceuticals. A year
later in 1996 the first entrepreneurial activities regarding nutraceuticals started to occur such as the
German Sandoz Nutrition GmbH installing a new plant for nutraceutical purposes (Nutraceuticals
International, 1-7-1996), and US company Nutrition For Life International Inc extending its operations
to the UK (Nutraceuticals International, 1-9-1996). Also the first conferences and meetings were held
29

in 1996, such as a seminar organized by a consultancy and advisory grouping within the French drug
industry called Industrie Sante (English: Health Industry). Besides scientific progress, the regulatory
challenges for the nutraceuticals industry were also being discussed (Nutraceuticals International, 18-1996).
In 1996 the discussion of these regulatory challenges was the first sign that the nutraceuticals
industry was going to encounter difficulties regarding to regulations. Because there was no European
regulatory framework for nutraceuticals, nutraceuticals were subject to national regulations. Even in
national regulations within EU countries there was no definition of a nutraceutical, and countries
were very reluctant in providing a marketplace for nutraceuticals. To illustrate, according to
Nutraceuticals International (1-8-1996), the German health authorities appeared to have launched a
virtual assault on dietary supplements and nutraceuticals. German health authorities accused
manufacturers of dietary supplements and nutraceuticals of bringing pharmacologically-active
products onto the market as dietary supplements and nutraceuticals to avoid a costly approval
process. Another example of this reluctance is when in 1996 the UK Department of Health's Advisory
Committee on Borderline Substances recommended the removal from National Health Service
prescribing of more than 200 unlicensed vitamins, minerals and supplements, as well as other
products (Nutraceuticals International, 1-12-1996).
Besides national governments being reluctant towards nutraceuticals, the general public was also
suspicious towards nutraceuticals. Consumers were especially skeptical about health claims on
nutraceuticals as appears from several studies: one study performed in 1997 by the UK National
Consumer Council People found that health claims were often confusing and misleading and thus
meaningless to most people (Nutraceuticals International, 26-2-1997). Additionally, a UK Advertising
Standards Authority research report from August 1997 found that 35% of advertisements for
vitamins, dietary supplements, and nutraceuticals were considered unacceptable and had broken the
British Codes of Advertising and Sales Promotion.
Also in 1997 the first European regulation was designed which was going to have an impact on the
nutraceuticals industry: Regulation (EC) 258/97 on novel food and novel food ingredients. According
to Regulation (EC) 258/97, foods and food ingredients that had not been on the European market in
the EU before 15 May 1997 are considered novel foods and novel food ingredients (Ec.europa.eu,
1997). To market a novel food or novel food ingredient, companies must apply to an EU country
authority for authorization, presenting a scientific information and safety assessment report. Since
the nutraceuticals industry sometimes works with new substances this was the first EU regulation
with which the industry had to comply.
Regulations to control nutraceuticals were differing widely throughout the EU, which had a blocking
effect on the marketing of nutraceuticals in Europe. During the period 1996 2000 all over the EU it
was being acknowledged that current legislation was not equipped to deal with nutraceuticals. For
example: in 1996 Paul Britten criticized the legislative framework in the UK, which he called outdated
because it was never designed to deal with nutraceutical products (Nutraceuticals International, 1-11997). Also, in 1996 Green Party European Parliamentarian Paul Lannoye of Belgium sent a report to
the European Parliament in which he highlighted the bureaucratic and legal obstacles which confront
the European nutraceuticals industry (Nutraceuticals International, 1-1-1997).

30

The borderline products1, as nutraceuticals and functional foods were called by the British
government, were a source of frustration for both companies and the regulatory authorities because
there was no regulatory framework for these products. Each EU member state was applying either
national food or pharmaceutical regulations. As a result national regulations in the different EU
countries were completely different from each other (Nutraceuticals International, 1-7-1996).
Conferences and meetings were organized on a regularly basis (mainly in the UK) to discuss these
regulatory challenges (Nutraceuticals International, 12-9-1996; 1-1-1997; 1-10-1997).
In a response to these problems several European nutraceutical and nutritional industry associations
start lobbying in 1998 for the harmonization of European regulations (Nutraceuticals International, 17-1998). At the end of 1998 lobbying activities were getting more widespread with Lord Donoughue,
a UK government's spokesman in the upper chamber of parliament, pleading for harmonization of
regulations on nutraceuticals on a European level (Nutraceuticals International, 1-12-1998). Also, the
Proprietary Association of Great Britain2 established a working party to oversee its new public
relations program related to vitamins, minerals and supplements (Nutraceuticals International, 1-111998).
Despite the lack of harmonization of regulations there was confidence in a growing nutraceuticals
market in Europe in 1998, endorsed by large investments in nutraceuticals by Danone and Nestl
(Nutraceuticals International, 1-5-1998). Following Danone and Nestl, Novartis and Numico also
directed their strategy towards nutraceuticals (Extel Examiner, 27-8-1998; 27-8-1998). By the year
2000 there was still an ongoing uncertainty about European regulations, a lack of harmonization of
European regulations, and investments in the European nutraceutical industry were declining. Most
large companies that had entered the European nutraceuticals market at the end of the 1990s were
exiting the industry again after 2003 because they could not obtain significant market shares.
In 2002 new EU regulations were designed that influenced the marketing of nutraceuticals. Directive
2002/46/EC relating to food supplements established harmonized rules for the labeling of food
supplements and introduced specific rules on vitamins and minerals in food supplements. Also in
2002 the European Commission published a draft proposal for a regulation on nutrition, functional,
and health claims made on foods (Nutraceuticals International, 1-8-2002). The European
nutraceuticals industry was optimistic and was expecting improvements in the complex regulatory
systems by which it was controlled. The proposed European directive on food supplements was
expected to result in a market with adequate freedom for the industry to operate in (Nutraceuticals
International, 1-12-2001). However, when the new Food Supplement Directive proposal was
published it forbade non-specific claims, which proved to be most efficient in marketing (Bech-Larsen
and Scholderer, 2007). After consultation with EU member states, consumer groups, and the food
industry, the European Commission withdrew the draft for further revision.
After several revisions the Food Supplements Directive 2002/46/EC came fully into effect on August
1, 2005. The Directive however was only half finished with important aspects such as the upper limits
for vitamins and minerals in food supplements being significantly delayed. As a result of the gaps in
the legislation many of the individual member states of the EU were reverting back to their original
legislation (Nutraceuticals International, 1-12-2004).

Nutraceuticals and other new products arriving on the market accompanied by health claims for which no regulatory
framework was established were being referred to by the British government as borderline products.
2
Proprietary Association of Great Britain is the UK trade association for manufacturers of over-the-counter medicines and
food supplements

31

In 2006 new regulations on nutrition and health claims made on foods were introduced. Regulation
(EC) 1924/2006 was initially embraced by the nutraceuticals industry. Finally there were uniform
regulations throughout the EU which would aid the marketing of nutraceuticals on a European level.
As a result firms start to invest in nutraceutical projects again. However this positive sentiment did
not last for long. Soon the industry became aware that the criteria of scientific substantiation would
be similar to those set out in 2003 by PASSCLAIM (Process for assessment of scientific support for
claims on foods), a European Commission Concerted Action Project (Nutraceuticals International, 110-2006). PASSCLAIM had established guidance on the criteria that should be used when assessing
the scientific credibility of a proposed claim. These criteria were very stringent and cover the number
of subjects in the study, subject compliance, the validity of relevant bio-markers, the duration of the
study and a number of other parameters (Nutraceuticals International, 1-10-2006). The required
level of scientific substantiation for the approval of health claims was similar to the requirements
pharmaceutical products needed to meet (IV1). Peter Berry Ottaway3, an important nutraceuticals
industry insider, foresaw the industry would encounter many problems to meet the criteria set out
by PASSCLAIM and emphasized that 2007 would be a challenging year for the nutraceuticals industry
(Nutraceuticals International, 20-10-2006). Because mainly small firms are active in the European
nutraceutical industry (IV3,4,6), very few nutraceutical firms have access to the funds needed to pay
for clinical studies. Additionally, demonstrating the relationship between a nutraceutical product
(which often consists of many active components) and human health (there is no objective reference
of what health is) is very difficult (IV1,2).
Coinciding with these negative expectations the entrepreneurial activities, market approval for new
nutraceutical products, and the number of patents filed at the European Patent Office strongly
declined in 2007.
After three years of less activity within the European nutraceuticals industry the number of patents
regarding nutraceuticals filed at the EPO strongly increased in 2009, and the year thereafter the
number of new nutraceutical product launches also started to increase again. These new
nutraceutical products entering the European market were mostly products containing omega-3 fish
oils. Despite this increase in entrepreneurial activity in the European nutraceuticals industry, the
uncertainty concerning regulations persisted and the number of approved new health claims on
nutraceutical products was still limited (Ec.europa.eu, 2011). In 2010 The Guardian (10-6-2010)
reported that 80% of the health claims applied for under Regulation (EC) 1924/2006 was rejected by
the European Commission and that the regulation was killing the nutraceuticals industry and the job
losses were already being felt.
At the moment there is a list of 19 approved health claims and a bill has been designed in which
about 200 new health claims are approved under Regulation (EC) 1924/2006 (IV7). The EFSA had
received over 44.000 applications on health claims, and had reduced these to 2800 health claims that
have been evaluated (IV5, IV6). Of the 2800 health claims about 200 health claims have been
approved by the EFSA, which means that about 95% of the evaluated health claims have been
rejected (IV7). These EFSA approved health claims still need to be approved by the European
Parliament. The European Parliament is expected to vote on the bill in which the health claims are
formulated mid 2012 (IV4,6,7). The European food supplement industry is heavily concerned about
these developments and is expecting the market size in Europe for non-vitamin and non-mineral
3

Peter Berry Ottaway is a food scientist and technologist with considerable experience in food law. As a consultant Peter
Berry Ottaway specializes in the scientific, technological and legal aspects of dietetic foods, functional foods, food
supplements and micronutrients.

32

containing food supplements, to which also nutraceuticals belong, to decrease with 25% from 2010
till 2013 (European Health Claims Alliance, 2010).
It can be concluded that European nutraceutical innovations have suffered from the uncertainty
about regulations and the lack of one uniform market, both associated with lack of harmonized
regulations in the EU. A timeline of the most important events that have influenced the development
of the European nutraceuticals IS is represented in Figure 4.2.

Figure 4.2 Timeline of important events in the European nutraceuticals IS

33

4.3 Results European nutraceuticals innovation system analysis per System Function
The following part discusses the results of the fulfillment of each System Function of the European
nutraceuticals IS separately.
4.3.1 Function 1: entrepreneurial activities
The first nutraceutical related entrepreneurial activities in the Europe started to occur in 1996 with
the German Sandoz Nutrition GmbH installing a new plant for nutraceutical purposes (Nutraceuticals
International, 1-7-1996). The next couple of years till the end of 1999 several other small
nutraceutical manufacturers entered the European nutraceuticals market. In 1999 the first large
companies such as Novartis and Numico entered the European nutraceuticals market. They pursued
an acquisition strategy in which small nutraceutical and food supplement companies were acquired
in order to get a stake of the growing European nutraceuticals market.
After these large companies had entered the European nutraceuticals market a period of little
entrepreneurial activity followed. No entrepreneurial activities were observed in the European
nutraceuticals IS between 2000 and the end of 2002. This is graphically represented in Figure 4.3.
70
60
50
F1 +

40

F1 -

30

F1 + cum

20

F1 - cum

10
0
2010

2008

2006

2004

2002

2000

1998

1996

1994

1992

1990

-10

Figure 4.3 Score development Function 1: Entrepreneurial activities EU 1990-2011

At the end of 2002 entrepreneurial activities started to rise again. During the following years until
2006 a gradual rise of entrepreneurial activity was observed. These entrepreneurial activities
generally came from small firms with different geographical backgrounds. Some were US or Canadian
based firms starting entrepreneurial activities in Europe, but most were UK or Scandinavian based
firms. For example, the Danish Nordic Phytopharma Group introduced Immulina, a natural immunestimulatory nutraceutical, and the US nutraceutical firm Natrol expanded its operations to the UK
(Nutraceuticals International, 1-5-2006; 1-6-2006). At the same time the large companies were
struggling to obtain significant market shares. As a result most large companies exit the European
nutraceuticals market for consumer products after 2003. Some large companies such as DSM and
BASF however remained active in the nutraceuticals industry as a supplier of raw materials. A
problem encountered by these large companies was their unfamiliarity with the patenting strategies
in the nutraceuticals industry (IV3). Large companies (mainly pharmaceutical or nutritional based
companies) were used at patenting their inventions, as this is common in their core business. In the

34

nutraceuticals industry however, patenting is far less common and small and medium sized
companies (SMEs) in the nutraceuticals industry relied to a large extent on trade secrets (IV3).
After new regulations on nutritional and health claims made on foods had been formulated in 2006
(EC 1924/2006) a strong decline in entrepreneurial activities and the number of patents granted at
the European Patent Office (EPO) was observed. This was anticipated by Peter Berry Ottaway who
noted in October 2006 that the industry would encounter many problems because of the new
regulations (Nutraceuticals International, 20-10-2006). Ottaway realized Regulation (EC) 1924/2006
was going to have a profound impact on the marketing of nutraceuticals, functional foods, and
supplements, and the use of health claims would require significant investments by suppliers of
nutraceuticals (Nutraceuticals International, 10-2006).
In 2010 the entrepreneurial activities started to rise again, with several new products being launched
on the UK market. Nowadays the business environment of the European nutraceuticals industry is
considered difficult (IV3,4). Firms have difficulties bringing innovative products on the market, which
is characterized by a high level of me-too products (IV3,5). Also, more and more firms pursue a
business model similar to the pharmaceutical industry, in which one illness is treated by one
substance (IV2,8). However, the strength of nutraceuticals should be fighting illness with a natural
product that contains several active ingredients instead of just one (IV2,8). Also the industry has
been focusing on making products with higher concentrations. Because many nutraceutical products
come from natural resources, this poses a risk of active ingredients losing their natural context and
becoming ineffective (IV3). Thus, entrepreneurial activities in the European nutraceuticals industry
are imitating business models of the pharmaceutical industry instead of focusing on the core
strengths of the nutraceuticals industry (IV3).
At the moment still mainly SMEs operate in the European nutraceutical industry (IV4,5,7). Large
companies had tried to enter the European nutraceuticals industry but encountered problems
regarding patenting and scientific substantiation of health claims. Where small companies generally
undertake less research, large companies have higher reputations at stake and therefore give more
importance to the value scientific substantiation of their products.
However a growing number of large food and pharmaceutical firms is investing in the area between
food and pharma and see opportunities in products such as nutraceuticals (IV8). These firms are
aware that illness often is caused by a combination of factors and that food related products can
address multiple targets (IV8). Industry entrepreneurs have especially high expectations of the
increased acceptance and use of nutraceuticals in (preventive) healthcare and personalized nutrition
(IV2,3,4,8). Nowadays medical practitioners are still unfamiliar with personalized medicine. However,
due to the rising healthcare costs and the decreasing number of new products brought to the market
by pharmaceutical companies, personalized nutrition an nutraceuticals provide new opportunities
since these are relative unexploited areas in healthcare, (IV2,3,4,8).
Developments in personalized nutrition are expected to be driven by improved methods of fast and
accurately screening individuals on their dietary needs/shortcomings (IV2,3). This will allow providing
patients with a tailored nutraceutical product. Critics expect products to become too expensive.
Supporters, however, think that people are willing to pay a premium price since products serve their
individual needs.
4.3.2 Function 2: knowledge development
The first research publications in Europe mentioning the term nutraceuticals showed up mid 1990.
One of these studies discussed the possible use of omega-3 and omega-6 fatty acids in
35

nutraceuticals, which could benefit proper nervous system and visual functions. Two other
publications related to the angiotensin-converting-enzyme (ACE) inhibiting properties of lactalbumin and -lactoglobulin. ACE is related to the regulation of blood pressure, and ACEinhibitors are used to treat high blood pressure. Even though these were the first research
publications mentioning the term nutraceuticals, studies relating to active ingredients were already
in progress before mid 1990. Researchers were only starting to use the term nutraceutical mid 1990
(IV2,3,4,7). Especially research on the relationship between health and certain plants, such as the
blood cholesterol lowering properties of plant sterol esters, was subject of several studies before the
1990s.
It took until 1999 for a real onset in research publications and patents applications using the term
nutraceutical to occur. From 2001 till 2005 the number of patents per year outnumbered the number
of studies per year (see: Figure 4.4). Despite very little investments in nutraceutical research projects
were observed during this period, there is a relative high amount of patents. About a quarter of the
patents issued during this period are property of large companies such as DSM, BASF, and Novartis.
These companies were focused on patenting their inventions, whereas SMEs in the European
nutraceuticals industry relied to a large extent on trade secrets (IV3). When some of these companies
exit the European nutraceuticals industry after 2003 because they could not obtain significant market
shares, the number of new patents started to decline. However the number of research publications
on nutraceuticals in scientific journals tripled (see: Figure 4.4).
140
120
100
80
research
60

patents

40
20
0
2010

2008

2006

2004

2002

2000

1998

1996

1994

1992

1990

Figure 4.4 Score development Function 2: Knowledge development EU 1990-2011

The increase in research publications on nutraceuticals after 2004 in scientific journals might be
related to the increasing popularity of the term nutraceuticals among scientists (IV2). After 2008
something remarkable happens; the number of granted patents tripled to 93 new patents registered
at the EPO in 2009, the reason for this is left unexplained.
Nowadays the European nutraceuticals industry relies on existing knowledge regarding the influence
of compounds in food on human health, and little investments are being made in the development of
new knowledge (IV4,5,7). This results in a homogenous marketplace with little differentiation
between the products. Also the industry follows a paradigm where one illness can be cured with one
active ingredient that acts on one target (IV2). In this respect a shift in focus where a variety of active
36

ingredients leads to a desired effect will create more opportunities to innovate. This development
should correspond with improved methods accurately screening individuals on their dietary
needs/shortcomings and can lead to personalized nutrition (IV2,3).
Despite the significant amount of patents, industry experts state that patents play a minor role in the
nutraceuticals industry and are expected remain so in the future. Because many products in the
nutraceutical industry are naturally based (plants, bacteria) it is difficult to obtain a patent on a
nutraceutical (IV2,3,6). Relationships between the active substances and human health are being
discussed for longer periods of time, therefore putting such an active substance in a pill is not
sufficient enough to obtain a patent (IV3). Furthermore, a patent requires revealing the invention,
including the production process. The exclusivity obtained by the patent often does not compensate
the revealing of the invention (IV3).
4.3.3 Function 3: knowledge diffusion
The first observed activity in the European nutraceuticals IS within Function 3: knowledge diffusion
was in 1996. A seminar was organized by the French drug industry in which the roles of the different
players involved in the development and regulation of health food products was discussed
(Nutraceuticals International, 1-5-1996). All over Europe, but mostly in the UK, conferences and
meetings were organized like Functional food, nutraceutical or pharmaceutical; technical
developments and the regulatory challenge (Nutraceuticals International, 12-9-1996). Many of
these meetings focused on the opportunities and the regulatory issues regarding nutraceuticals
(Nutraceuticals International, 13-3-1997; 17-5-1999).
The first network was formed in 1975: The European Federation of Associations of Health Product
Manufacturers (EHMP). The EHPM represents health products manufacturers in Europe, including
manufacturers of herbal preparations, functional foods, nutraceuticals, and food supplements. The
EHPM has national member associations throughout the EU. Some of the most active members
within the EHPM are the French, English and Dutch member associations (IV4). In 1998 the European
Responsible Nutritional Alliance (ERNA) was founded to represent major food supplement
manufacturers and suppliers such as BASF, Bayer, DSM, and Herbalife (Nutraceuticals International,
1-7-1998). The International Alliance of Dietary/Food Supplement Associations (IADSA) was also
established in 1998 to face up to the increasing globalization of markets and global regulatory
challenges in the vitamins and supplements sector (Nutraceuticals International, 20-3-1998).
In 1999 the first alliances between companies were observed in the European nutraceuticals IS. UK
drug wholesaler AAH Pharmaceuticals has joined forces with Roche to study trends in the UK
vitamins, minerals and supplements sector (Nutraceuticals International, 1-2-1999), and the French
based company Thallia Pharmaceuticals entered into a research agreement with the UK based
Rowett Research Institute for the development of nutraceutical products (Nutraceuticals
International, 1-4-1999).
Also in 1999 the Dutch Koninklijke Numico NV started its acquisition strategy with the acquisitions of
the German nutraceutical companies Viva GMBH and Pharma Burger GMBH & Co, and the
acquisition of the UK based company Larkhall Natural Health (AFX news, 7-1-1999; Extel Examiner,
15-1-1999). Thus, Numico illustrated that large companies have tried to obtain a stake in the
European nutraceuticals market. Numico CEO Hans van der Wielen set the company's target in
increasing nutraceuticals and health food sales to 1 billion Dutch guilders by the end of 2003 from
the 261 million Dutch guilders in 1999, mainly through acquisitions (Extel Examiner, 12-3-1999). This
strategy failed however and in 2003 Royal Numico was almost bankrupt and finally admitted defeat
37

in its battle to carve out a successful and significant niche in the vitamins and supplements sector by
selling off its nutraceutical units (Nutraceuticals International, 1-11-2003). In 2007 Numico went back
to its core business (baby food), performing well again and was acquired by the French Groupe
Danone (sync.nl, 2007).
Another large player in the field of nutraceuticals was Merck KGaA which in 1996 acquired the British
company Seven Seas (Nutraceuticals international, 1-6-1996). In 2000 Merck KGaA officially stated
that it was firmly committed to its activities in the nutraceuticals arena, and was expecting revenues
from this business to double by the end of 2002 (Nutraceuticals International, 1-10-2000). Currently
Merck S.A. C.V., a subsidiary of Merck KGaA is still active in the nutraceuticals industry (Fero
industries, 1-7-2011).
In the meantime many conferences and meetings were being held and a steady amount of event was
observed every year within Function 3 (see Figure 4.5).
180
160
140
120
100
F3+

80

F3+ cum

60
40
20
0
2010

2008

2006

2004

2002

2000

1998

1996

1994

1992

1990

Figure 4.5 Score development Function 3: Knowledge diffusion EU 1990-2011

Most of these conferences focused on the consequences of the European regulations on

nutraceuticals and food supplements, and how the European nutraceuticals market would look like
in the future (Nutraceuticals International, 26-5-2004; 1-2-2004; 19-11-2003). Not only the industry
was holding conferences and meetings on European regulations on nutraceuticals and food
supplements, also national and European governmental institutions had difficulties with the unclear
regulations and were holding conferences on the topic (Nutraceuticals International, 1-12-2006; 2110-2005; 1-5-2004). Therefore, in an attempt for clarity and transparency, the European Commission
had issued a "questions and answers" statement on the proposed European Union Nutrition and
Health Claims Regulation in 2007 (Nutraceuticals International, 1-7-2007). Later that year, in
response to all uncertainties regarding European regulations, the EFSA had published a guidance on
how to request approval of health claims under Regulation (EC) 1924/2006 (Nutraceuticals
International, 1-8-2007). While mergers, acquisitions, and network formation were still taking place
from 2006 to 2009, the ambiguity and concerns regarding the European regulatory framework
remained (IV3,4). At the end of 2008 regulators, scientists, and industry representatives came
together in Prague to discuss the food supplement industry's top four regulatory concerns
(Nutraceuticals International, 1-11-2008). These concerns were the setting of maximum levels for
38

vitamins and minerals, the approval of health claims, the future of botanical ingredients in food
supplements, and the recently adopted regulation on free movement of goods (EU Regulation No
764/2008).
These industrys concerns were being confirmed when in July 2009 80% of submitted claims had
been rejected by the EFSA (Nutraceutical Business & Technology, 2009). The industry assumed that
95% of all submitted health claims will be rejected after all applications have been reviewed by the
EFSA (European Health Claims Alliance, 2010).
Besides the EHPM, ERNA and IADSA another international industry organization is the European
Nutraceutical Association (ENA). As a partner of the American Nutraceutical Association (ANA) the
ENA is a relatively new organization founded in 2005 that provides a scientific platform for
nutraceuticals. From the industry, concerns are expressed about the gap between scientific institutes
and the nutraceutical industry. There is a lack of conferences where universities and industry meet
and knowledge development is not in line with market needs. More effort should be devoted to
open collaborations between universities and the industry in which needs and knowledge are being
freely exchanged (IV3).
4.3.4 Function 4: guidance of the search
Especially regulatory issues, and to a lesser degree scandals such as the questioning of efficacy and
the contamination of fish oil supplements with dioxin have played an important role in the
development of the European nutraceuticals IS (IV1). Regulatory issues have caused a lot of
uncertainty about how the industry would develop and what was allowed, especially regarding to
health claims made on nutraceuticals (IV1,3,4).
In 1993 the first Act on natural remedies, which included nutraceuticals, came into force in Sweden
(Nutraceuticals International, 1-7-1993). Then in 1996 the first concerns relating to regulations were
expressed by Paul Britten of the UK Medicines Control Agency Borderline Section. Paul Britten said
legislation was outdated and nutraceutical products were technically outside the law. The borderline
products were a source of frustration both for companies and the regulatory authorities because
there was no clarity about regulations and regulations between different countries were often in
conflict with one other (Nutraceuticals International, 1-7-1996). Each member state was free to apply
national legislation. As a result a product could be considered a food or a pharmaceutical depending
on which country the product was being sold (Nutraceuticals International, 1-7-1996). Many negative
comments were placed against regulatory issues throughout EU countries from 1996 till 2000. For
example, Peter Berry Ottaway called for a definition of the term food supplement, which didnt
exist in 1998 (Nutraceuticals International, 1-6-1998). Also, a joint venture between the UK's
consumer organizations, enforcement authorities (including the Medicines Control Agency), and
industry bodies, named the Joint Health Claims Initiative, was calling the regulations regarding health
claims both incomplete and inflexible (Nutraceuticals International (2), 1-6-1998).
However during the same period many positive expectations about a growing nutraceuticals industry
in Europe were expressed as well: Jean-Christian Kipp, general director of management consultancy
firm Arthur D Little in France, expected the attitudes of Europeans towards nutraceuticals were
about to change (Nutraceuticals International, 1-8-1999). Also Euromonitor, a world leader in
strategy research for consumer markets, was expecting a strong growth of the nutraceuticals market
fostered by a wider acceptance of self-medication and increasing health awareness (Nutraceuticals
International, 1-2-1999).

39

Nevertheless, the diversity of regulations between countries made it very difficult for companies to
internationally market their products (IV3,4). For instance, in The Netherlands there was a very
liberal policy, probably the most liberal in Europe, in which products could be accompanied with
health claims as long as they were not misleading (IV5). The burden of proof lied with the
government. German law on the other hand was much stricter on nutraceuticals and more liberal on
pharmaceuticals. As a result products that would be considered food supplements4 in the
Netherlands could be considered pharmaceutical products in Germany (IV3,4). Even within the
different Bundeslnder in Germany different regulations were applied (IV5). Even though since
January 1993 controls on the movement of goods within the internal market of the EU had been
abolished, nutraceuticals could not freely be transported across countries within the EU (Europa.eu,
2012).
In 1996 it was being acknowledged that current legislation was not equipped to deal with
nutraceuticals. The European Commission had been attempting to introduce legislation on health
claims made on food products for over 20 years, with the first proposal for a directive being
circulated in 1980 (Nutraceuticals International, 1-8-2002). Since agreement could not be reached on
how stringent and far-reaching legislation should be, the proposal was dropped and was resurrected
in 1992. Again agreement could not be reached and the proposal was officially dropped again in 1995
with no prospect on developments in the near future. In 1997 Regulation EC 258/97 on novel food
and novel food ingredients came into effect in Europe. The Commission considered foods and food
ingredients that had not been used for human consumption to a significant degree in the EU before
15 May 1997 novel foods and novel food ingredients (Ec.europa.eu, 2012). To market a novel food or
ingredient, companies must apply to an EU country authority for authorization, presenting the
scientific information and safety assessment report. Five years later in June 2002, the Commission
published a draft proposal for a regulation on nutrition, functional, and health claims made on foods
(Nutraceuticals International, 1-8-2002). This was the first time a proposal spoke about health claims
and it was the antecedent of regulations on health claims that would be established in 2006
The Directive 2002/46/EC relating to food supplements established harmonized rules for the labeling
of food supplements and introduced specific rules on vitamins and minerals in food supplements.
The aim was to harmonize the legislation and to ensure that these products were safe and
appropriately labeled so that consumers could make informed choices. The European nutraceuticals
industry was optimistically, expecting improvements in the complex regulatory systems by which it
was controlled (IV1,4). The proposed European Directive on food supplements was expected to
result in a market with adequate freedom for the industry to operate (Nutraceuticals International,
1-12-2001). However, the new Directive forbade non-specific claims, which proved to be most
efficient in marketing. After consultation with member states, consumer groups and the food
industry, the EC withdrew the draft for further revision. The food supplements Directive, which was
adopted by the European Parliament in mid-2002, came fully into effect after several revisions on
August 1, 2005. However important aspects such as the upper limits for vitamins and minerals were
still absent in the new directive (Nutraceuticals International, 1-12-2004). The gaps in the legislation
had led to many of the individual member states of the EU reverting to their original legislation
(Nutraceuticals International, 1-12-2004).
Despite these difficulties regarding regulations, also a rise in positive expectations about a growing
European nutraceuticals market was observed during this period. For example, the British newspaper
4

official definition of nutraceutical products in The Netherlands and the EU

40

The Independent was calling the European nutraceuticals market a booming market, and Britons
were one of the largest consumers of nutraceuticals in Europe (The Independent, 2005). Figure 4.6
shows this rise in positive events within Function 4 after 2004
120
100
80
60
40

F4 +

20

F4 -

0
2010

2008

2006

2004

2002

2000

1998

1996

1994

1992

1990

-20
-40

F4 + cum
F4 - cum

-60
-80
-100
-120

Figure 4.6 Score development Function 4: Guidance of the search EU 1990-2011

When in 2006 Regulation (EC) 1924/2006 on nutrition and health claims made on foods was finally
adopted, concerns were being raised by companies because the conditions of the use of health
claims were very strict. Regulation (EC) 1924/2006 was based on the precautionary principle. The
precautionary principle states that in case of absence of scientific consensus whether an action or a
policy might harm the public or environment, the burden of proof that the action is not harmful falls
on those taking the action. In this case; claims would only be added to the permitted list after a full
review of the scientific evidence by the European Food Safety Authority (EFSA). Accordingly it was
expected that Regulation (EC) 1924/2006 would have a profound impact on the marketing of
nutraceuticals, functional foods, and food supplements since many substances might not pass this
evaluation. It would require a significant investments in clinical trials by suppliers of nutraceuticals in
order to stay on the market because the current level of scientific evidence supporting the claims
used by the industry was expected not to be strong enough (Nutraceuticals International, October
2006). As a consequence a number of health claims needed to be drastically modified or removed
(Nutraceuticals International, October 2006).
The procedure in selecting whether a claim was going to be approved was as follows. Health claims
could be submitted at national government bodies. Each EU member state then had to submit a list
of claims submitted health claims in their country with scientific evidence to support the claim at the
EFSA. Submissions by the industry, NGOs or trade bodies directly at the EFSA were not permitted.
The national lists had to be submitted no later than January 31, 2008, which were then sent to the
EFSA. The EFSA evaluated the claims on three criteria. First the structure of the active ingredient
needed to be characterized. Second holistic claims in terms of general wellbeing were not allowed,
and third the claim needed a sufficient amount of scientific substantiation (IV6). The EFSA was
required to inform the European Commission of those claims that could be accepted before January
31, 2010. The total of 44.000 health claims that had been submitted at the EFSA was downgraded by
the EFSA to 2.800 health claims which were going to be evaluated (IV7,6). Many complaints were
41

raised by the nutraceuticals industry on the application process (IV6). Neither the European
Commission nor the EFSA had created a set of guidelines for the application procedure. As a result it
was unclear to the nutraceutical industry how to apply for the approval of a health claim which
caused confusion and resentment towards the European Commission (IV6).
The EFSA had a hard job on evaluating the submitted health claims and the evaluation deadline of
31-1-2010 was not met (The Guardian (London), 10-6-2010). On 10-6-2010 The Guardian (London)
reported that 80% of 40.000 submitted health claims were rejected by the EFSA and that Regulation
(EC) 1924/2006 was killing the nutraceuticals industry and job losses were already being felt.
According to an assessment by the nutraceutical and food supplement industries in 2010, 95% of
health claims for other substances (non vitamin and mineral containing) food supplements was
going to be rejected (European Health Claims Alliance, 2010).
However, some companies in the nutraceuticals industry such as Winclove have said to initially
embrace Regulation (EC) 1924/2006 because it could abolish junk products from the market and
increase the trustworthiness of the nutraceuticals industry (IV3,4). Nevertheless the implementation
of Regulation (EC) 1924/2006 has been criticized by the industry, such as Winclove and the Natuur- &
gezondheids Producten Nederland5 (NPN). The implementation of Regulation (EC) 1924/2006 was
too rigorous and left little freedom for the nutraceuticals industry to operate: when a claim was not
fully scientifically proven, the claim could not be used in communications to consumers (including
marketing and labeling of products), even when safety was proven and health benefits were likely
(IV3). Suggestions by the industry have been made at the European Union to eliminate the worst
junk products from the market and then slowly increase the level of scientific substantiation needed
for the use of a health claim (IV2,4). This would allow nutraceutical manufacturers in time to
increasingly support the claims made on their products with scientific evidence. Also suggested was
the introduction of a grading system in which products were allowed to use health claims that are
very likely but not fully scientifically proven in combination with an indication to the degree of
uncertainty (IV2,4). This would create an incentive to develop new products since they can be
marketed in an earlier stage. From here on manufacturers could then invest their money to fully
proof the efficacy of their product (IV,4). The European Commission however has not implemented
such a system because it means that customers might be misled by a health claim since in essence it
has not been scientifically proven (IV5). Also the question remained whether companies would invest
in additional research to support their health claims once they were on the market (IV5). Where the
nutraceuticals industry is pressing for a more liberal regulatory regime, scientists and government
employees are stressing the importance of inspection (IV7,8). At the moment there is no European
inspection agency that monitors the European market on the use of scientifically unsubstantiated
health claims, and that can effectively ban products off the market that make scientifically
unsubstantiated claims. These scientifically unsubstantiated products make it very difficult for
companies that do invest in expensive clinical research to bring products on the market for a
competitive price (IV8). In this way innovation in products that are proven to be effective is
hampered and the industry is bringing few quality products to the market (IV8).
Despite these negative opinions of the industry towards the implementation of Regulation (EC)
1924/2006, Simon Pettman, director of international food and nutrition policy consultancy
organization EAS, said that international regulators are closely monitoring developments regarding
regulations in the European Union, as authorities in many countries increasingly look for models on
5

Dutch industry organization for health products such as food supplements and herbal preparations

42

which to base their legislation (Nutraceuticals International, 1-6-2008). Whether Regulation (EC)
1924/2006 really is going to have a severe impact on the nutraceutical industry, nutraceuticals
innovation, and the size of the nutraceuticals market will become clearer in the years to come.
Besides these regulatory issues slowing down the development of a nutraceuticals market, numerous
of events, especially relating to fish oil supplements and probiotics, have raised positive expectations
about a growing market. For example, the southern Welsh producer of fish oil products VeryWise
Nutrition was growing rapidly and doubled its workforce in two years. The first positive signals about
fish oil came from a meeting of a group of obstetricians who highlighted the benefits of fish oil in
reducing high blood pressure during pregnancies (The Herald (Glasgow), 23-5-1994). For probiotics
the first positive signals came in 2005 from reports in UK newspapers about a study published in the
journal Clinical Nutrition which mentioned that the use of probiotic supplements could reduce the
severity of common cold symptoms (Western Mail, 13-9-2005).
However, also negative expectations have been commonly expressed. In this regard the case of fish
oil supplements and its questioning whether these supplements were beneficial to human health are
characteristic to controversies in the nutraceuticals industry: after positive expectations were being
raised about the health benefits of fish oil supplements, these positive expectations were tampered
when fish oil supplements came widespread in the news from February to April 2006 because of
dioxin contamination. (Nutraceuticals International, 1-5-2006; Chemist & Druggist, 22-4-2006).
Elevated levels of dioxins in fish-oil supplements were discovered in first the UK, and afterwards in
rest of Europe (Nutraceuticals International, 1-5-2006). This episode caused reputational damage for
some companies such as Boots, a leading drugstore in the UK, which had to remove its home brand
fish oil products from the market (Nutraceuticals International, 1-5-2006; Chemist & Druggist, 22-42006). Nevertheless, this negative publicity did not stick with the public for long (IV5,6). In 2006 a
study was started in which fish oil supplements were given to school children to improve their
behavior and concentration in the classroom. (Western Mail, 12-6-2006). Also, in 2007 NICE, the UK
National Institute for Health and Clinical Excellence recommends doctors to prescribe fish oil
supplements to patients who have had a heart attack as part of preventive measures (Pulse, 24-52007). The study of fish oil supplements with children and the doctors prescribing fish oil
supplements suggests that the trust in the safety of fish oil supplement had recovered in Europe.
While in 2010 trust in the safety of fish oil supplement seemed to have recovered and newspapers
were talking again about the benefits of fish oil (Daily Mail (London), 13-7-2010), other sources still
questioned the efficacy of fish oils in the period 2009 2011. For example, to contrary belief fish oil
supplements were said to have no benefit to heart patients receiving optimal medical care according
to Dr. Jochen Senges of the Heart Centre in Ludwigshafen and the University of Heidelberg in
Germany (Business Recorder, 4-5-2009). Also, for patients undergoing cancer treatment fish oil could
be harmful according to a study by the University Medical Centre Utrecht (Press Association
Mediapoint, 12-9-2011,).
As with fish oil supplements, other scandals did not stay with the public for a long time. For example,
the contamination of nutraceuticals with the carcinogenic substances called Polycyclic aromatic
hydrocarbons (PAHs) in the Netherlands was hardly picked up by the media and thus did little
damage to the industry (IV5). Also the controversy regarding to the efficacy of fish oil supplements as
described above, can also be seen with other products such as probiotics, of which a study at Utrecht
University found that adverse effects may occur in patients suffering from acute infection in the
pancreas (The Statesman, 2008). Often there is no scientific consensus about the efficacy of
nutraceuticals (IV5). This is the reason why of the 2800 evaluated health claims only about 200 have
43

been approved (IV6,7). All of the health claims relating to botanicals and probiotics have been
rejected because of insufficient characterization of the active substance or bacteria (IV6,7). There are
two ways in how the number of approved health claims can increase in the future. First the bill which
lists the approved health claims still needs to be approved by the European Parliament. The voting
on this bill is expected to take place somewhere mid 2012. If the European Parliament does not
approve the list then a more liberal regime with more approved health claims could be the result
(IV6). The other way how the number of approved health claims could increase, is when the industry
is able to accurately characterize probiotic bacteria stems and the active substances in botanicals
(IV6).
Concluding, many regulatory issues have occurred and also several scandals have occurred. These
both have had a profound impact on the fulfillment of Function 4: guidance of the search in the
European nutraceuticals IS. Also, more negative than positive events have been observed within
Function 4. However since the number of both positive and negative observed events has decreased
the over past 5 years (see Figure 4.6 above), it seems that ambiguity about how the future European
nutraceuticals market would look like has decreased. Regulation (EC) 1924/2006 has eventually
created clear set of rules which the industry has to obey.
4.3.5 Function 5: market formation
Until 1996 no events were observed that created a uniform European market for nutraceuticals. In
1996 a niche market was created for nutraceuticals when European Union's Internal Market Council
installed a special procedure which allowed temporary two-year marketing authorizations to be
issued for foodstuffs coming from research intended for dietary purposes (Nutraceuticals
International, 1-7-1996). It took until 2002 for the next market formation events to take place. These
events in 2002 all related to regulations that created a market for nutraceuticals, such as a request of
the European Commission to lift a ban on distance selling6 of food supplements in Austria
(Nutraceuticals International, 1-8-2002). Also, after hard lobbying by the EHPM and the ERNA, a
proposal to update the EU's body of pharmaceutical legislation which would classify many products
within the scope of Directive 2002/46/EC as medicinal was rejected (Nutraceuticals International, 111-2002).
It was the lack of uniform European regulations on nutraceuticals that has had the most influence on
the formation of a market for nutraceuticals (IV3,4,5). Before 2002 every European country had its
own regulations. As a result there were many national markets in Europe that were very different
from each other. For example, the Dutch and the UK market were relatively liberal, whereas the
German market was very conservative. Due to these regulatory differences between EU countries, it
was very difficult to market nutraceutical products on a European level.
Directive 2002/46/EC relating to food supplements was the first effort to harmonize rules for the
labeling of food supplements and introduced specific rules on vitamins and minerals in food
supplements at the European level. After 2004 the effect of the harmonization becomes visible with
more products getting market access, such as Metafolin7 by Merck (Nutraceuticals World, 1-5-2006).
The first effects of harmonization are also visible in Figure 4.7 which represents the fulfillment of
Function 5.
6

Distance selling is when consumers purchase goods or services through distance communication such as the internet or
mail.
7
Metafolin contains a natural form of folate and plays a key role in central metabolic pathways.

44

20
15
10
F5 +

F5 -

0
2010

2008

2006

2004

2002

2000

1998

1996

1994

1992

1990

-5

F5 + cum
F5 - cum

-10
-15
-20

Figure 4.7 Score development Function 5: Market formation EU 1990-2011

In 2006 Regulation (EC) 1924/2006 on health claims was designed and is expected to come fully into
in effect in 2012. Initially Regulation (EC) 1924/2006 caused uncertainty about the future market of
nutraceuticals in Europe. Because it was unclear what health claims were going to be approved many
companies were cautious with starting new projects in fear of not being able to use health claims on
their newly developed products (IV2,3,4). However, on the long term Regulation (EC) 1924/2006 has
a positive effect on market formation by harmonizing the different national European nutraceuticals
markets. Additionally, if a European inspection agency is able to effectively ban scientifically
unsubstantiated products of the market, another positive contribution to the European
nutraceuticals market of Regulation (EC) 1924/2006 can be the stimulation of competition between
companies (IV6,8). Because the market has long been polluted by nutraceutical products that have
not been scientifically substantiated competition was disturbed competition that did try to validate
their nutraceutical products and made high investments in research such as clinical trials.
At this point in time, early 2012 it only becomes clear how Regulation (EC) 1924/2006 is going to be
implemented, what health claims are going to be allowed. There is still discussion on how to cope
with health claims that are not being approved. Many of these are on hold which means they have
not rejected and the application is still in progress. At the moment there is a list of 19 approved
health claims and a bill has been designed in which a list of about 200 approved health claims is
included (IV7). This bill still needs to go through the European parliament for approval. This is
expected to be due mid 2012 (IV4).
4.3.6 Function 6: resource mobilization
The first investments in the European nutraceuticals industry were observed in 1996. The French
producer of nutraceuticals, dietary supplements, and other health-care-related products,
Arkopharma, collected money by the issue of shares and described its introduction on the Paris stock
exchange as a success (Nutraceuticals International, 1-5-1996). In 1998 there was confidence in a
growing nutraceuticals market in Europe, endorsed by large investments in the development of
nutraceutical products by big food companies such as Danone and Nestl (Nutraceuticals
International, 1-5-1998). Other big companies such as Novartis (pharmaceuticals) and Numico
(medical nutrition, baby food) also saw opportunities in the European nutraceuticals market and
45

directed their strategy towards nutraceuticals (Extel Examiner, 27-8-1998; 12-3-1999). But between
2000 till 2004 a decline of investments was observed, which can be related to the lack of regulations
and thereby the uncertainty about the future of the European nutraceuticals industry (IV4). This
caused the EU market for nutraceuticals to be fragmented and risky for investors. Only two
investments by governments were observed between 1990 2011: in 2005 the Dutch government
invested 1 million in a joint venture between the Netherlands-based Codrico BV and Thailand's
PG&P Group to produce about 3,000 tons of food supplements (Nutraceuticals International, 1-112005a). Also in 2005 the Swedish government unveiled a five-year plan, called Food and Nutrition
Program (in Finish known as ERA), to make the country a global leader in healthy nutrition, providing
funding opportunities for companies involved in the development of functional foods and
nutraceuticals (Nutraceuticals International, 1-11-2005b). From 2007 onwards several investments
made by companies were observed such as an investment in the R&D department of the UK
nutraceutical company R5 (Nottingham Evening Post, 29-3-2007), and an investment by the Swiss
nutritional supplements company Exicho in the start-up of new subsidiary in Dijon (Nutraceuticals
International, 1-3-2008).
With only eleven investments in nutraceutical firms and projects observed during the period 1990
2011, the willingness to invest in the nutraceuticals industry seems rather low (see Figure 4.8).
According to the Dutch industry organization for nature and health products (Natuur- en
gezondheidsproducten Nedeland, NPN) the uncertainty relating to regulations (what claims are going
to be approved?) made it difficult to collect investments for nutraceutical firms (IV4). However firms
themselves said they had no problem in obtaining financial or human capital (IV2,3). The willingness
to invest money in nutraceutical projects is very much dependent on the nature of the particular
project and it is not possible to state the willingness to invest is generally low (IV3).
12
10
8
6

F6 +
F6 + cum

4
2
0
2010

2008

2006

2004

2002

2000

1998

1996

1994

1992

1990

Figure 4.8 Score development Function 6: Resource mobilization EU 1990-2011

4.3.7 Function 7: creation of legitimacy / counteract resistance to change

The credibility of the European nutraceuticals industry has been an important issue in the
development of the European nutraceuticals innovation system; several events have been observed
that question the efficacy of nutraceuticals. The first of these events related to the negative attitude
of governments regarding nutraceuticals and the European nutraceuticals industry, and were
observed in 1996: the journal Nutraceuticals international (1-8-1996) stated that The German health
46

authorities appeared to have launched a virtual assault on dietary supplements and nutraceuticals.
Also in 1996 the UK the Department of Health's Advisory Committee on Borderline Substances
recommended the removal from National Health Service prescribing of more than 200 unlicensed
vitamins, minerals, and supplements because these products had not demonstrated a therapeutic
value or had more economic alternatives (Nutraceuticals International, 1-12-1996).
Also several studies performed on health claims and advertisement by the nutraceuticals industry
were skeptical towards the nutraceutical industry: one study by the UK National Consumer Council
found that health claims were often confusing and misleading and thus meaningless to most people
(Nutraceuticals international, 26-2-1997). Another research report of the UK Advertising Standards
Authority found that 35% of advertisements for vitamins and dietary supplements were considered
unacceptable because they were potentially misleading (Nutraceuticals International, 1-9-1998).
Because of the vague health claims and the distrustful advertising the nutraceuticals industry was
losing credibility rapidly.
The first lobbying activities in favor of nutraceuticals started when European nutraceutical and
nutritional sector associations started lobbying for uniform European regulations in 1998
(Nutraceuticals International, 1-7-1998). At the end of 1998 it seemed that lobbying activities were
getting more widespread with Lord Donoughue, a UK government's spokesman in the upper
chamber of parliament, pleading for harmonization of regulations on food supplements and related
products in the European Union (Nutraceuticals International, 1-12-1998), and the Proprietary
Association of Great Britain establishing a working party to oversee its new public relations program
related to vitamins, minerals and supplements (Nutraceuticals International, 1-11-1998).
The years afterwards no lobbying activities were observed until in 2002 old problems became part of
discussion again (see Figure 4.9). Health claims on nutraceuticals were found confusing
(Nutraceuticals International, 1-12-2002) and in 2005 a study reported that 50% of consumers found
health claims on nutraceuticals untrustworthy (M2, 23-11-2005). Instead of focusing on the
trustworthiness of health claims and getting support of consumers, the nutraceutical industry
focused on legislative issues such as lobbying against the upper limits of active substances set by
Directive 2002/46/EC (Nutraceuticals International, 14-2-2005). No efforts undertaken by the
nutraceuticals industry have been observed that try to influence consumers perspectives on
nutraceuticals and the nutraceuticals industry.
In 2008 news in the UK about two UK based nutraceutical companies, Boots and Superdrug,
pronounced that these companies misled millions of people by putting less active ingredients in their
products than was stated on the label (Nutraceuticals International, 1-9-2008; The Irish Times, 28-72008). These products concerned chondroitin and glucosamine supplements, which are both said to
fight osteoarthritis. Such misleading activities by producers can be damaging for the industry as a
whole. Another big problem of the European nutraceuticals industry is producers putting
pharmaceutical substances in their nutraceutical products without mentioning the substance on the
label (IV5,7). This is potentially very dangerous for consumers and can also be very damaging for the
industry as a whole. Also a typical problem of the European nutraceuticals industry were so called
free-riders, companies that take a substance with expected health benefits and put it in a pill
without doing any research on efficacy (IV3,4,5). New sales channels such as websites, Facebook, and
Ebay created opportunities for free-riders to market scientifically unsubstantiated nutraceutical
products to consumers. These were difficult to trace by national inspection agencies. In this respect
the new regulations on health claims can give a positive boost to the credibility of the nutraceuticals
industry (IV4). It will become more difficult for these free-riders to market their product with
47

harmonized European regulations, and the strict monitoring of compliance with regulations. Also
when consumers know a health claim has been scientifically proven and approved by the EU this can
have a positive effect on the credibility of the nutraceuticals industry.

10
7
4
F7 +

-5

2010

2008

2006

2004

2002

2000

1998

1996

1994

1992

1990

-2

F7 F7 + cum
F7 - cum

-8
-11
-14
-17

Figure 4.9 Score development Function 7: creation of legitimacy / counteract resistance to change EU 1990-2011

Concluding, studies like Research and Market (M2, 23-11-2005) which were claiming that 50% of
consumers find health claims on nutraceuticals untrustworthy, and incidents in the UK with Boots
and Superdrug misleading consumers (Nutraceuticals International, 1-9-2008), suggest that the
industry has a problem with its trustworthiness amongst European consumers. During the interviews
however, industry insiders regarded no problem with the trustworthiness of the industry amongst
consumers (IV3,4,6). There might be a mismatch between the image created by the media and
consumers perception of the industry. The actual perception of consumers on the European
nutraceutical industry might be better than the perception that is given in the media (IV3).
Nowadays lobbying activities by the European nutraceuticals industry primarily focus on Regulation
(EC) 1924/2006. The nutraceutical and food supplement industries are lobbying at the European
Parliament to reject the list of approved health claims composed by the EFSA. The nutraceutical and
food supplement industries would like to see less scientific substantiation for the approval of health
claims to obtain a larger degree of freedom in the use of health claims (IV6,7).
Now the fulfillment of all seven System Functions of the European nutraceuticals IS has been
discussed, the performance of the European nutraceuticals IS will be discussed.
4.3.8 Performance of the European nutraceuticals innovation system
Table 4.1 shows the market size of the European nutraceuticals market in the period 1990 2011.
Data on the market size was very limited and many years are missing; only those years on which data
was available are represented in Table 4.1. Because data is retrieved from different sources that are
using different definitions of the nutraceuticals market, these figures cannot simply be compared
with each other. It can merely be used as an indication of the development of the European
nutraceuticals market over time. Since data on the size of the European nutraceuticals market of
1991 and 1995 from Euromonitor are coming from the same source, and the data of 1999 and 2006
from Basu et al. (2007) are coming from the same source, data of 1991 and 1995 can be compared
48

with each other and data of 1999 and 2005 can be compared with each other. The data from
Euromonitor shows that between 1991 and 1995 the size of the European nutraceuticals market had
decreased with 1 million US $. This indicates that the European nutraceuticals IS was performing
badly. Data from Basu et al. shows that the European nutraceuticals market has grown four and a
half times in size. This is a strong growth, however data on the European nutraceuticals market size
needs to be compared with the data on the US nutraceuticals market to put the size and growth of
the European nutraceuticals market into perspective.
Table 4.1: Market size European nutraceuticals industry
Year
Market size
Comment
nutraceuticals in
billion US $
1991
0.3
1995

0.29

1999

1.8

2006

Source

Euromonitor,
1996
Euromonitor,
1996
Basu et al.,
2007
Basu et al.,
2007

The fulfillment of several Functions of the European nutraceuticals IS were found to be lacking.
Function 1 was mildly lacking, in the years 2000 2002 and 2007 2009 very few events were
observed. Function 2 and Function 3 were well fulfilled with many events observed. Within Function
4 also many events were observed, however this included many negative events as well. Therefore
Function 4 is considered to be not adequately fulfilled. Function 5 is also considered not adequately
fulfilled: there was the lack of the formation of one uniform European market. Within Function 6 no
negative events were observed. However, only eleven events were observed within Function 6.
Therefore Function 6 is considered to be under fulfilled. Within Function 7 nine positive events and
eleven negative events were observed. Because of the limited number of events and the relative
large number of negative events Function 7 is also considered not adequately fulfilled as well.
Thus, only Function 2 and Function 3 have been adequately fulfilled. All the other Functions have
shortcomings in their fulfillment. The next chapter will discuss the results of the analyses of the US
nutraceuticals IS. After these results have been discussed the European and US nutraceuticals IS will
be compared with each other, which will give a better understanding of the effect of the lack of
fulfillment of several of the System Functions of the European nutraceuticals IS.

49

5. Results United States nutraceuticals innovation system

This chapter provides the results of the analysis of the US nutraceuticals innovation system (IS) over
the period 1990 2011, in which a total of 904 events were found. Unfortunately no interview data
could be collected for the US nutraceuticals IS. The results start with a structural analysis of the
current US nutraceuticals IS according the innovation system framework of Kuhlman and Arnold
(2001). Second a narrative is given showing the development of the US nutraceuticals IS. Third the
fulfillment of each System Function will be discussed separately. The references of the narrative of
the US nutraceuticals IS and the references of the fulfillment of the System Functions of the US
nutraceuticals IS can be found in Appendix C. This is done because adding the vast amount of
references of the US nutraceuticals IS analysis amongst the general references would strongly
decrease the readability of the references of the research. The historical event database can be
found in an enclosed CD-ROM in Appendix E.
5.1 United States nutraceuticals innovation system
Figure 5.1 (based on Kuhlmann and Arnold, 2001) shows a graphical representation of the structure
of the US nutraceuticals innovation system. It needs to be taken into account that figure 5.1 is a
simplified model of the US nutraceuticals IS that describes the most important components of the US
nutraceuticals IS. The several blocks shown in the figure 5.1 are explained below.

Figure 5.1 A structural framework of the US nutraceutical innovation system model (based on Kuhlmann and Arnold, 2001)

Both small and large companies are active in the industrial system of the US nutraceuticals IS. Some
examples of large companies are Monsanto, DuPont, Johnson & Johnson, and Abbott laboratories.
These companies respectively originated from the biotech, general life-science, and pharmaceutical
industries. Also many small nutraceutical companies are active in the US nutraceuticals industry such
as Science Based Health, Bio-Therapeutic Inc, and Michelles Miracle. Nutraceutical companies are
spread through the entire US with a higher concentration of companies in Utah (edcUTAH, 2009).
50

Important product categories are herbal preparations, antioxidants, and fish oil supplements
(Nutraceuticalsworld.com, 2012).
The demand side consists of end users, which are consumers, and the intermediary demand, which
are companies that buy nutraceuticals and sell these under their private label. The intermediary
demand consists mainly out of drugstores such as Walgreens.
The education and research side consist largely out of universities and R&D divisions of nutraceutical
companies. US universities conducting research on the relation between nutrition and health are City
University of New York, University of North Carolina, and University of Wisconsin, amongst others
(Education-portal.com, 2012). Small nutraceutical companies use this public knowledge to develop
nutraceutical products and do little scientific research themselves. Large companies active in the US
nutraceuticals industry, such as pharmaceutical companies, are more involved in scientific studies on
nutraceuticals such as clinical trials. The reason for this is that large companies do not want to risk
their reputation with scientifically unsubstantiated nutraceutical products. Furthermore large
companies have the funds to carry out expensive scientific research such as clinical trials.
In the political system the federal US government makes the regulations. However the main actor in
the political system of the US nutraceuticals IS is the US Food and Drug Administration (FDA), which
is the executive department of the federal US government responsible for the regulation and
supervision on nutraceuticals. The main framework condition is the Dietary Supplements Health and
Education Act of 1994 (DSHEA). Under the DSHEA nutraceuticals are considered Dietary
Supplements. The DSHEA states that producers of dietary supplements cannot market a dietary
supplement product as a treatment or cure for a specific disease or condition. However,
manufactures of dietary supplements can make a structure/function8 claim on a dietary supplement
label if this claim is accompanied with a disclaimer stating that the claim has not been evaluated by
the FDA (FDA.gov, 2012). In practice, this means for the US nutraceuticals industry there are is a
great variety of health claims which they can use as long as there is a disclaimer on the label of the
product (FDA.gov, 2012). The infrastructure mainly consists of investment companies such as Finova
Mezzanine Capital and Burrill and Co, which invest in nutraceutical companies and research.
An important intermediary organization in the US nutraceuticals IS is the Office of Dietary
Supplements (ODS). The ODS engages in the following activities: strengthen knowledge and
understanding of dietary supplements by evaluating scientific information, stimulating and
supporting research, disseminating research results, and educating the public to foster an enhanced
quality of life and health for the U.S. population (ODS, 2012)
5.2 Narrative United States nutraceuticals innovation system 1990 2011
Before 1994 there were no specific laws to regulate nutraceuticals. Nutraceuticals fell under the
Federal Food, Drug, and Cosmetic Act (FDA.gov, 2010). Under this law it was for nutraceuticals
virtually impossible to make a medical or health claim, even if a company conducted the necessary
research (PR Newswire, 1-12-1994). Despite it was difficult to use health claims on nutraceutical
products, nutraceutical products such as fish oil capsules were already on the market in 1990. The
problem regarding the use of health claims was discussed in a newspaper article in USA Today (14-51990). This article discussed the benefits of fish oil capsules by mentioning the potential positive
effect of taking fish oil capsules in fighting colon inflammation. Despite the FDA agreed that there
were studies that showed these benefits, the assertion of a health benefit qualified the fish oil
8

Structure/function claims describe the role of a nutrient or dietary ingredient intended to affect the structure or function
of the body.

51

capsules as drugs and was thus forbidden without FDA approval. Accordingly, the FDA had told about
60 manufacturers of fish oil capsules to stop making health claims (USA Today, 14-5-1990). The
manufacturers could only continue selling their capsules as foods without health claims and if they
could convince the FDA that the products had been used as foods in the past and were generally
recognized as safe (The Associated Press, 16-7-1990).
At the end of 1991 and in 1992 several articles showed up in US newspapers that talked about the
promises of nutraceuticals and the nutraceutical revolution with headlines such as Future foods will
be here sooner than we think and A push to label medicinal powers of some foods (The New York
Times 13-9-1992; The Atlanta Journal and Constitution, 2-1-1992; The Associated Press, 5-12-1991).
Americans were becoming more health-conscious and were ever more incorporating nutraceuticals
into their diets (PR Newswire, 23-4-1998).
Because of the growing demand for nutraceutical products and the problem of the use of health
claims on nutraceuticals a group of top food scientists and business leaders held a meeting in January
1993 in New York to discuss the possibilities of the FDA creating a new category for nutraceuticals
and allow special labeling for them (USA Today, 14-1-1993). The FDA was increasingly becoming
aware of the lack of regulation for such products and the problems this was causing the
nutraceuticals industry. Therefore in 1994 the Dietary Supplement Health and Education Act (DSHEA)
came into force (FDA.gov, 2012). Under the DSHEA nutraceuticals were considered dietary
supplements. The Act states that the dietary supplement or dietary ingredient manufacturer is
responsible for ensuring that a dietary supplement or ingredient is safe before it is marketed. The
FDA is responsible for taking action against an unsafe dietary supplement product after it reaches the
market. Generally, manufacturers did not need to register their products with FDA nor get FDA
approval before producing or selling dietary supplements. More importantly, dietary supplement or
dietary ingredient manufacturers were not required to register a health claim before making a
structure/function claim on a nutraceutical (FDA.gov, 2012). Because it was not required to register a
health claim, the manufacturer must state in a disclaimer that FDA has not evaluated the claim
(FDA.gov, 2012).
When the DSHEA came into force a wide range of opportunities regarding the use of health claims
was created for nutraceutical manufacturers in the US. Accordingly, during the period 1995 2000
the entrepreneurial activities increased strongly. For example, the company HealthLink International
alone launched 23 new nutraceutical products in 1998 (Business Wire, 12-1-1998). Also mergers,
acquisitions and firms forming coalitions took place on a regularly basis. These coalitions were
licensing agreements such as one of the many licensing agreements of Nutraceutix for its antioxidant
Calcium D-Glucarate (Business Wire, 1-12-1999). The industry was growing strongly. Growing
investments were witnessed with the largest investment observed before 2000 being an investment
from Morgan Weinstein & Co. of $100 million in HealthSpan, Inc.
In line with the growing nutraceuticals market, the American Nutraceutical Association (ANA) was
established in 1997. The Council for Responsible Nutrition (CRN), established in 1973, already existed
but where the CRN was the leading trade association representing dietary supplement
manufacturers and ingredient suppliers (including nutraceutical manufactures and suppliers), the
ANA only focused on nutraceuticals.
At the end of the 90s voices were being raised that public health could be at stake because
nutraceuticals might interfere with pharmaceutical products people were taking (Daily News (New
York), 27-9-1999; Reuters Health Medical News, 17-9-1999). Experts were also indicating that the
large degree of freedom regarding the use of health claims was hampering scientific substantiation
52

of nutraceutical products and was resulting in a cowboy industry with many misleading products
on the US market (Reuters Health Medical News, 15-5-2000; The Associated Press, 26-1-1993).
Accordingly, relatively few research and patents were observed and knowledge development did not
onset until 2000. According to Dr. DeFelice of the Foundation for Innovation in Medicine9 (FIM), the
DSHEA did not provide incentives for nutraceutical research. For a research-oriented nutraceuticals
industry, Dr. DeFelice urged US Congress to enact The Nutraceutical Research & Education Act
(NREA)10 (Reuters Health Medical News, 12-11-1998). The Act would help "...encourage quality
medical and scientific research on the health benefits of food products," as Stephen H. McNamara,
former FDA Associate Chief Counsel for Food, stated at the 10th Nutraceutical Conference in New
York (Reuters Health Medical News, 12-11-1998). The Bill however was not accepted by the US
Congress and the DSHEA is still in force, accordingly the US nutraceuticals industry still enjoys a large
degree of freedom regarding the use of health claims. Only the FIM and a few physicians were
ascribed a negative opinion towards the large degree of freedom regarding the use of health claims
under the DSHEA, no other negative opinions towards the DSHEA were observed.
The expectations on the development of the US nutraceuticals industry were very positive: a study
carried out by Research and Markets expected the US nutraceuticals industry to grow with 9% per
year until 2010 (Business Wire, 4-5-2004). Furthermore, according to Tyre Lanier and Duane Larick,
two food science professors at N.C. State University, nutraceuticals were the fastest growing
segment of the food industry, fostered by the increased health awareness of American consumers
(Business Wire, 29-8-2000; PR Newswire, 8-5-2000; News and Observer (Raleigh, NC), 5-1-2000;
Capital Times (Madison, WI.), 26-4-1999). Paradoxically however, the nutraceuticals industry had
registered an increase of just 5% in 1999 (Business Wire, 10-12-2001). Furthermore, according to a
study by Nancy Childs, a professor at St. Joseph's University in Philadelphia, nutraceutical companies
were slow to market products because of concerns about high costs and federal regulations (St. Louis
Post-Dispatch (Missouri), 28-2-2000).
From 2000 onwards the amount of research and patents published regarding nutraceuticals was
increasing strongly in the US. From 2002 till 2011 the functional analysis of the US nutraceuticals IS
saw an average of 18 new entrepreneurial projects in the US nutraceuticals IS every year. Often
these were entrepreneurial projects from existing nutraceutical companies. For example, in 2005
Martin Nutraceuticals Inc. extended its distribution channels by placing products in retail outlets,
chain stores, and warehouse distribution centers (PrimeZone Media Network, 29-4-2005). Other
entrepreneurial projects were projects by companies such as Science Based Health, which launched a
new macular health product, MacularProtect Complete-S, which is a nutritional formulation to help
protect macular and full body health. Important segments of the US nutraceuticals market were
herbal preparations, antioxidants, and fish oil supplements (Nutraceuticalsworld.com, 2012).
Regularly negative stories about nutraceutical products came in the news. As a result of the
publication of such stories in the mass media the nutraceuticals industry was subject of controversy
in 2005 with almost 50% of consumers finding the claims on nutraceuticals and other food
supplement products untrustworthy (Business Wire, 15-6-2005; 23-11-2005). Also stories came in
the news questioning the efficacy and safety of fish oils. For example, the prominent cardiologist Dr.
9

The Foundation for Innovation in Medicine (FIM), was established in 1976 by Stephen L. DeFelice, M.D. It is a nonprofit
foundation whose primary purpose is to accelerate medical discovery by creating a more productive clinical research
community
10
The Nutraceutical Research & Education Act (NREA) is to amend the Federal Food, Drug, and Cosmetic Act and aims to
promote clinical research on health benefits of dietary supplements and foods by establishing a new legal classification for
dietary supplements and foods with health benefits.

53

Gruss called 99% of all fish oil supplements on the market completely worthless (Business Wire, 22-42009), and makers and sellers of fish oil supplements were being sued in California for not including
labeling about polychlorinated biphenyl (PCB) contamination (Upi, 2-3-2010; The New York Times,
24-3-2009; St. Louis Post-Dispatch (Missouri), 23-4-2007; Palm Beach Post (Florida), 15-6-2005).
PCBs are carcinogenic and are also being related to liver damage.
Over the period 2005 2009 the US nutraceuticals industry feared a decline in revenue and
nutraceutical companies started lobbying activities. For example, industry expert William T. Shields
was promoting the health benefits of enhanced Omega-3 dietary supplements (PR Newswire, 14-22006). Also regularly public relations activities were carried out by nutraceutical companies such as
Martin Nutraceuticals Inc. which started weekly infomercial about the benefits of nutraceuticals was
broadcasted on The Voice of America, an internet radio station. (Market Wire, 1-6-2006). However
such infomercials11, which were carried out frequently by Martin Nutraceuticals Inc., largely focused
on individual products and were thus more associated with marketing activities. Also from 2006
onwards numerous studies that raised positive expectations about nutraceutical products appeared
in the news. For example, the probiotics from Nutraceutix had shown to enhance immune function in
clinical research (PR Newswire, 1-6-2006), and 5-LOXIN produced by PL Thomas in alliance with Laila
Nutraceuticals had shown to reduce the symptoms of osteoarthritis (Business Wire, 1-8-2008).
No collective lobbying efforts carried out by the US nutraceuticals industry were observed that aimed
to positively influence consumers perception on nutraceuticals. Nevertheless, no more expression
about the untrustworthiness of the US nutraceuticals industry was observed either after 2009. Hence
it seemed the untrustworthiness of the nutraceuticals industry was of temporary nature in the
period 2005 2009. Only a few incidents regarding nutraceutical products were observed, such as
Berkeley Premium Nutraceuticals which was misleading customers with its male enhancement
product Enzyte, which was found to be ineffective (Upi, 16-3-2005). Another incident regarding
nutraceutical products that came widespread in the news in 2009 and 2010 was the contamination
of several fish oil supplements with PCBs, which are carcinogen and could cause liver damage (Upi,
2-3-2010). These companies, CVS Pharmacy Inc., General Nutrition Corp., Now Health Group Inc.,
Omega Protein Inc., Pharmavite LLC, Rite Aid Corp., Solgar Inc. and TwinLab Corp., were refusing to
disclose the level of contamination; a public relations campaign to promote fish oil supplements was
started and the CRN released a press message saying there were no safety issues with fish oil
(Business Wire, 27-4-2010). These incidents regarding fish oil supplements and Enzyte have had little
influence on the US nutraceuticals industry in general: in 2011 the outlook of the US nutraceuticals
industry was prosperous with a forecasted US nutraceuticals market of $207 billion in 2016 (Business
Wire, 9-8-2011).
On the next page Figure 5.2 shows a timeline in which the most important event within the US
nutraceuticals IS are given.

11

Infomercials are direct response informational television programs in which information about a product is given and
consumer have the possibility to directly buy the product

54

Figure 5.2 Timeline of important events in the US nutraceuticals IS

5.3 Results United States nutraceuticals innovation system analysis per System Function
The following part will discuss the results of the fulfillment of each System Function of the US
nutraceuticals IS separately. In the TIS analysis of the US nutraceuticals IS over the period 1990
2011 a total of 904 events have been found. Unfortunately no interview data could be collected.
5.3.1 Function 1: Entrepreneurial activities
The first entrepreneurial activities observed in the US nutraceuticals innovation system were 2
nutraceutical development projects in 1995. A company called Nutraceutical started to harvest algae
as a source of beta carotene for the production of nutraceuticals, and Biomune Systems announced
the formation of Optim Nutrition with which it planned to enter the US nutraceuticals market (PR
newswire, 1-11-1995; Salt Lake Tribune (Utah), 6-9-1995). These nutraceutical development projects
came soon after the introduction of the Dietary Supplement Health and Education Act (DSHEA) at the
end of 1994, which created a market for dietary supplements12 in the US by officially defining the
term dietary supplement and creating a new regulatory framework for the safety and labeling of
dietary supplements (FDA.gov, 2012)
From 1995 until 1998 each year two or three new nutraceutical products entered the US
nutraceuticals market. From 1998 there was a strong increase in the number of new nutraceutical
products that entered the US market with seven new entrepreneurial projects that were started.
These entrepreneurial projects varied from the startup of a new business unit by Photosynthetic
Harvest Inc. to develop new nutraceutical products, to the launch of 23 new nutraceutical products
by HealthLink International (PR Newswire, 24-6-1998; Business Wire, 12-1-1998).
Then in 1999 the number of new entrepreneurial projects in the US nutraceuticals IS strongly rose
from 7 to 17 in one year. Besides chemicals and food producing companies diversifying their
operations towards the nutraceuticals market, also 5 start ups of websites on which nutraceuticals
were sold were observed (PR Newswire, 16-3-1999; Business Wire, 23-2-1999).
In 2000 the first company to sell fish oil nutraceuticals entered the US nutraceuticals market (PR
Newswire, 1-2-2000). The fish oil market would become an important part of the US nutraceuticals
market with a total of 17 fish oil nutraceutical products launched in the US over the period 1990
2011.

12

A dietary supplement is the equivalent to what is called a food supplement in the European Union

55

From 2002 the emergence of the US nutraceuticals industry has been well in progress with an
average of 18 new entrepreneurial projects observed each year. Besides the fish oil supplement
market, other segments of the US nutraceuticals market in which many new nutraceutical product
launches were observed were the antioxidant market, the eye health market, inflammatory market,
and the weight loss market (Market Wire,28-3-2011; U.S. Newswire, 17-10-2008; PR Newswire, 14-42003).
As visible in Figure 5.3, at the end of the first decade of 2000 once a year a nutraceutical project was
terminated in the US, and only seven nutraceutical projects in the US were observed that have been
terminated over the period 1990 2011. A terminated project that received a lot of media attention
was Berkeley Premium Nutraceuticals, which filed for bankruptcy in 2008 (The Associated Press State
& Local Wire, 16-9-2008). Berkeley produced the male enhancement product Enzyte and came
widespread in the news after the company's founder and CEO, Steve Warshak, and his mother,
Harriet Warshak, were found guilty of conspiracy to commit mail fraud, bank fraud, and money
laundering (Associated Press Online, 27-8-2008).
From 2011 onwards the future prospects of the US nutraceuticals industry, and thus entrepreneurial
opportunities, are looking good with an estimated growth rate of 6.5% until the US nutraceuticals
market reaches a value of $207 billion in 2016.
250
200
150

F1 +
F1 -

100

F1 + cum
F1 - cum

50
0
2010

2008

2006

2004

2002

2000

1998

1996

1994

1992

1990
-50

Figure 5.3 Score development Function 1: Entrepreneurial activities US 1990-2011

5.3.2 Function 2: knowledge development

The first time the term nutraceuticals was mentioned in a US scientific journal was in 1993. This
article discussed the synthetic development of novel lipids which could be used for nutraceutical
purposes (Blackburn and Mascioli, 1993).
It took until 1997 for the term nutraceutical to show up in a US scientific journal again. From 1997
onwards publications in US scientific journals on nutraceuticals gradually increased until a steady
state of about 75 publications in US scientific journals per year was reached in 2006 (see Figure 5.3).
The number of patents mentioning nutraceuticals far exceeded the number of publications in US
scientific journals mentioning nutraceuticals between 2003 and 2009 (see Figure 5.3). Over this
period an average of 59 research publications per year regarding nutraceuticals was observed
whereas and average of 403 patents per year was observed. The first patent mentioning the term
nutraceutical was granted in 1994 and discussed the aminosugar and glycosaminoglycan
56

compositions in the use of a nutraceutical for the repair of connective tissue in humans (US Patent
number: 5364845). The number of patents strongly increased till in 2009 555 patents were granted.
In 2010 and 2011 a strong decrease in the number of patents was observed. This decrease could be
explained by patents that have been issued in 2010 and 2011 had not yet been added to the
database.
600
500
400
300

research
patents

200
100
0
2010

2008

2006

2004

2002

2000

1998

1996

1994

1992

1990

Figure 5.4 Score development Function 2: Knowledge development US 1990-2011

5.3.3 Function 3: knowledge diffusion

In 1993 the first acquisition within the US nutraceuticals industry was observed. A company called
Nutraceutical purchased Solaray, which produced herbal nutraceutical products (Salt Lake Tribune
(Utah), 6-9-1995). Also in 1993 the first meeting of the US nutraceuticals industry was observed. A
group of top food scientists and business leaders met in New York. The group pleaded for Congress
to create a new Food and Drug Administration category for nutraceuticals and allowed special
labeling for them (USA Today, 14-1-1993). One and a half year after this meeting, at the end of 1994
these pleadings were heard and the Dietary Supplement Health and Education Act (DSHEA) came
into effect. This new law created a range of opportunities for the US nutraceuticals industry. Before
DSHEA came into effect it was rather impossible to make medical or health claims on a nutraceutical,
even if a company demonstrated benefits by clinical research (PR Newswire, 1-12-1994). With the
DSHEA enacted it became possible to make certain claims regarding structure, function, and
deficiencies without prior FDA approval. Soon afterwards several meetings and conferences were
being held in the US such as "Nutraceutical Research, Development & Marketing: Time to Move
Forward?" organized by the Foundation for Innovation in Medicine (PR Newswire, 1-12-1994). This
and other conferences discussed the possibilities of the use health claims under the DSHEA and
explored the degree and nature of evidence required for making a claim on a nutraceutical (PR
Newswire, 4-5-1995; 1-12-1994). Until 2000 conferences regarding nutraceuticals primarily focused
on regulatory topics, but after 2000 new scientific developments regarding nutraceuticals became
increasingly important on conferences such as the American Association of Pharmaceutical Scientists
Dietary Supplements Forum, which was held in Washington D.C. in 2000 (PR Newswire, 28-6-2000).
Conferences also focused on marketing related topics and showcasing new nutraceutical products
such as the annual Nutracon conference (Business Wire, 17-7-2000).

57

The most important networks in the US nutraceuticals industry were The Council for Responsible
Nutrition (CRN), established in 1973, and The American Nutraceutical Association (ANA) established
in 1997. CRN is the leading trade association representing dietary supplement manufacturers and
ingredient suppliers, and the ANA provides a forum which mission is to develop and provide
educational materials and program on nutraceuticals and nutrition for health care professionals,
consumers and sales associates from nutraceutical companies.
Most knowledge diffusion in the US nutraceuticals IS was observed around the year 2000. Between
1999 and 2001 an average of 30 events per year were observed that related to knowledge diffusion
(see Figure 5.5).
350
300
250
200
F3 +
150

F3 + cum

100
50
0
2010

2008

2006

2004

2002

2000

1998

1996

1994

1992

1990

Figure 5.5 Score development Function 3: Knowledge diffusion US 1990-2011

In total 161 coalitions between companies and/or research institutes were observed in the US
nutraceuticals IS in the period 1990 2011. Often these were licensing agreements such as the many
licensing agreements of Nutraceutix for its antioxidant Calcium D-Glucarate (Business Wire, 1-121999), or distribution agreements such as Kaire Nutraceuticals signing 3200 new distributors in 1999
(PR Newswire, 7-10-1999), but also marketing alliances were observed such as a strategic marketing
alliance between ZYTO Corp. and BioNativus for the sale of software to facilitate decision making for
healthcare practitioners who use BioNativus supplements (Business Wire, 25-7-2007).
Also 104 mergers and acquisitions were observed in the US nutraceuticals IS in the period 1990
2011. These were mainly nutraceutical firms acquiring other nutraceutical firms such as Beneficial
Holdings acquiring Beneficial Health and Beneficial Nutraceuticals (Business Wire, 15-6-2004). After
2004 the number of mergers and acquisitions and the number of coalitions observed per year
declined.
5.3.4 Function 4: guidance of the search
The first positive expectations in a growing market for nutraceuticals in the US were expressed by
Mr. Leveille of Nabisco Foods Group in 1992 (The San Francisco Chronicle, 15-1-1992). ''Future foods
will be here sooner than we think,'' predicted Mr. Leveille at an outlook conference at the United
States Department of Agriculture in 1992. ''Both the market demand and the technological knowhow are well on their way to defining and delivering such a food supply.'' Mr. Leveille said. To speed
up that process, the Foundation for Innovation in Medicine (FIM) had issued a 40-page white paper
58

called The Nutraceutical Initiative: A proposal for economic and regulatory reform. In this paper the
FIM urged the FDA to provide an economic and regulatory base for a more vigorous researchgrounded nutraceuticals industry (The San Francisco Chronicle, 15-1-1992). The FIM was hoping to
get the FDA to grant nutraceuticals a status similar to that of orphan drugs (Foundation for
innovation in medicine, 2012); it argued for a favorable tax regime and hoped that strongly
suggestive data of benefits from clinical trials would be sufficient for a product to obtain market
approval (Foundation for innovation in medicine, 2012). In 1994 there were still some problems
relating to regulations. The absence of a well emerging nutraceutical industry was attributed to the
lack of a research-driven nutraceuticals industry (Foundation for innovation in medicine, 2012).
To fill this gap in regulations and create the possibility to make health claims on nutraceuticals and
other dietary supplements, new regulation was designed. In October 1994, the Dietary Supplement
Health and Education Act (DSHEA) was signed into law by President Clinton (FDA.gov, 2012). This act
created a regulatory framework for dietary supplements13 and cleared the way for a nutraceuticals
market in the US. Experts were expecting a growing market for nutraceutical products and expected
the US nutraceuticals industry would soon be competing with the traditional food, pharmaceutical,
biotechnology and health food industries (PR newswire, 4-5-1995).
The DSHEA provided opportunities for the emerging nutraceuticals industry in the US by allowing
health claims on nutraceutical products. It became possible to make structure/function claims on a
nutraceutical (these claims describe the role of a nutrient or dietary ingredient intended to affect the
structure or function of the body). The manufacturer is responsible for ensuring the accuracy and
truthfulness of these claims; they are not approved by FDA. Therefore, if a nutraceutical includes
such a claim, it must state in a "disclaimer" that FDA has not evaluated this claim. The years after
DSHEA came into force positive expectations were expressed by industry experts such as nutritional
education consultant Nancy Hillen stating in 1996: First among the trends in nutrition is the growth
of nutraceuticals (Charleston Gazette (West Virginia), 9-10-1996). And in 1997 Dr. DeFelice stated
about nutraceuticals: It's going to have a major impact on disease, much more than drugs (Copley
News Service, 16-11-1997). During this period scientific studies on clinical active substances and their
possible use in nutraceuticals were regularly published in the press. For example one publication
discussed a study that showed a selenium yeast supplement significantly reduced human cancer
incidence (PR newswire, 24-12-1996). Another research publication discussed a study that found fish
oil capsules could reduce flare-ups of Crohn's disease (The Associated Press, 12-6-1996).
At the end of the 1990s the first negative opinions towards regulations were expressed: public health
could be at stake because nutraceuticals might interfere with the pharmaceutical products people
were taking (Daily News (New York), 27-9-1999; Reuters Health Medical News, 17-9-1999). Dr.
Steven H. Zeisel, of the University Of North Carolina School Of Public Health, feared possible
interaction with pharmaceuticals when nutraceuticals were administered in large dosages (Reuters
Health Medical News, 17-9-1999). Dr. Zeisel urged the FDA to increase inspection of nutraceuticals
by creating a regulatory category for nutraceuticals that were administered in large dosages to
obtain pharmacological effects (Reuters Health Medical News, 17-9-1999).
Physicians indicated that the large degree of freedom regarding the use of health claims was
hampering scientific substantiation of nutraceutical products and was resulting in a cowboy
industry with many misleading nutraceutical products on the market (The Associated Press, 26-11993; Reuters Health Medical News, 15-5-2000). Since the DSHEA did not provide incentives for
13

official definition of nutraceutical products in the US

59

nutraceutical research, Dr. DeFelice of The Foundation for Innovation in Medicine (FIM) promoted
The Nutraceutical Research & Education Act (NREA) at US Congress to increase scientific
substantiation of nutraceutical products. According to another industry expert, Stephen H.
McNamara, former FDA Associate Chief Counsel for Food, the NREA could increase scientific research
on the health benefits of food products by giving a period of exclusive marketing rights over a health
claim for the person or company that demonstrated such health benefits (Reuters Health Medical
News, 12-11-1998). The Bill however was not accepted by the US Congress and nutraceutical
products in the US are still regulated under the DSHEA (Reuters Health Medical News, 12-11-1998).
However this negative view regarding the large degree of freedom under the DSHEA on health claims
and its effect this on scientific substantiation of nutraceutical products had only been the opinion of
a small group of people, such as the Foundation for Innovation in Medicine and some physicians
(Reuters Health Medical News, 12-11-1998; 15-5-2000). In 2007 the NREA was again promoted at
congressman Pallone of the Energy and Commerce Subcommittee on Health. Pallone however did
not reintroduce the NREA at US congress (The foundation for innovation in medicine, 10-1-2007).
Lastly, several incidents took place relating to fish oil supplements in 2007 and 2009. Contaminations
with mercury had been found and for that reason physicians discouraged women to take fish oil
supplements during pregnancy (The New York Times, 24-3-2009; St. Louis Post-Dispatch (Missouri),
23-4-2007). Fish oils had also been related to the functioning of certain immune cells, which could be
negatively affected by fish oils. Therefore some physicians had also discouraged people with
weakened immune system to take fish oil supplements (Palm Beach Post (Florida), 15-6-2005).
However the general opinion on US regulations on nutraceuticals and the growth of the US
nutraceuticals market remained positive. Few events were observed within Function 4 that
negatively contributed to the US nutraceuticals IS (see Figure 5.6).
160
140
120
100
F4 +

80

F4 -

60

F4 + cum

40

F4 - cum

20
0
2010

2008

2006

2004

2002

2000

1998

1996

1994

1992

1990

-20
-40

Figure 5.6 Score development Function 4: Guidance of the search US 1990-2011

5.3.5 Function 5: market formation

The first observations of FDA approving health claims were made at the end of 1999 and the
beginning of 2001. The FDA approved a health claim correlating the consumption of soy protein with
reducing the risks of heart disease (Business Wire, 21-10-1999), and a health claim for dairy products
that links vitamin B12, as well as B6 and folic acid, to reduction in heart disease risk (Capital Times

60

(Madison, WI.), 29-1-2001). Very little activity was observed within Function 5, as can be seen in
Figure 5.7.
20
15
10

F5 +
F5 -

F5 + cum
F5 - cum

0
2010

2008

2006

2004

2002

2000

1998

1996

1994

1992

1990
-5
-10

Figure 5.7 Score development Function 5: Market formation US 1990-2011

However, market formation had already started in October 1994 with the Dietary Supplement Health
and Education Act (DSHEA) coming into effect. Because nutraceuticals are aimed to have a health
benefit, allowing communicating this health benefit to consumers created a market for
nutraceuticals. A total of 16 health claims were approved by the FDA over the period 1999 2008.
These claims described a relationship between a food, food component, or dietary supplement
ingredient, and reducing risk of a disease or health-related condition. The use of structure/function
claims on a nutraceutical is allowed without prior approval, however the manufacturer is responsible
for ensuring the accuracy and truthfulness of these claims; the claims are not pre-approved by FDA.
Therefore, if a nutraceutical includes such a claim, it must state in a disclaimer that FDA has not
evaluated this claim.
Until 2004 several approvals of health claims by the FDA were observed. In 2008 two approvals by
Consumerlab14 on the quality and manufacturing practices of fish oil supplements had been observed
(Business Wire, 23-6-2008; PR Newswire, 4-8-2008). After 2008 no new health claims had been
approved by the FDA. However, under the DSHEA companies could already use health claims on
nutraceuticals whether the FDA has evaluated the health claim or not (FDA, 2012).
The FDA banned a few health claims that were made by nutraceutical products: in 1990 the first ban
was imposed on claims on fish oil supplements of lowering cholesterol and the chance of heart
attacks (The Associated Press, 16-7-1990). In 2000, after the introduction of the DSHEA, a second ban
on a health claim was imposed on fish oil supplements: manufacturers were claiming omega-3 fatty
acids protected against heart disease. The FDA banned these claims due to the lack of evidence and
only allowed a function claim about the positive relationship between omega-3 fatty acids and
cardiac wellness (Reuters Health Medical News, 2-11-2000).
In addition to these events there has been an ongoing battle on the use of ephedra15 in weight loss
nutraceuticals (The Associated Press State & Local Wire, 14-5-2007; Salt Lake Tribune (Utah), 11-114

Consumerlab is the leading provider of independent test results and information to help consumers and healthcare
professionals identify the best quality health and nutrition products.

61

2004). Ephedra was linked to serious side effects events, such as a number of deaths (Salt Lake
Tribune (Utah), 8-3-2003). Therefore the FDA placed a ban on ephedra in April 2004.
Altogether these negative events have been product specific and have not had a profound influence
on market formation of nutraceuticals in general in the US. Only niche markets of the US
nutraceuticals market have been affected by the bans such as the ban on ephedra supplements and
the ban on health claims on fish oil supplements. In general the US nutraceutical industry enjoyed a
large degree of freedom due to the freedom to use health claims under the DSHEA.
5.3.6 Function 6: resource mobilization
The first financial investments in the US nutraceuticals industry were observed in 1997. Fuisz
Technologies, which is involved in the production of nutraceuticals, received a private investment of
$75 million to enhance current business opportunities and to invest in general corporate purposes
(PR Newswire, 23-10-1997). The following years every year an average of 4 to 5 investments in the
US nutraceutical industry were observed (see Figure 5.8).
60
50
40
30

F6 +
F6 + cum

20
10
0
2010

2008

2006

2004

2002

2000

1998

1996

1994

1992

1990

Figure 5.8 Score development Function 6: Resource mobilization US 1990-2011

The investments were research grants such as Kibow Biotech receiving $1 million for clinical research
from the National Institute of Diabetes, Digestive and Kidney Diseases, (Internet Wire, 1-7-2002).
Furthermore equity and debt financing was observed such as funding from Morgan Weinstein & Co.
in HealthSpan, Inc. (PR newswire, 28-5-1999). These investments were mainly placed by venture
capitalists. A few investments by non-profit organizations were observed too, such as the above
mentioned National Institute of Diabetes, Digestive and Kidney Diseases providing US Kibow Biotech
with a research grant of $1 million (Internet Wire, 1-7-2002). This research grant was to advance the
development of Kibow Biotechs nutraceutical product lines that could augment kidney functions for
pre-dialysis or early stage kidney failure patients (Internet Wire, 1-7-2002). Another investment by a
non-profit organization was the National Alzheimer's Association funding of a three-year study at the
University of Massachusetts Lowell to determine whether the SmartPill, which was developed by

15

Ephedra supplements contain ephedrine compounds that have stimulating and thermogenic effect. These compounds
stimulate the brain, increase heart rate, constrict blood vessels (increasing blood pressure), and expand bronchial tubes
(making breathing easier). Their thermogenic properties cause an increase in metabolism.

62

researchers at the University of Massachusetts Lowell, could also delay the onset of Alzheimer's
(Lowell Sun (Massachusetts), 20-10-2008).
From 2008 to 2011 however, the investments in the US nutraceuticals industry decline, which is left
unexplained. In 2011 3 investments were observed. One of these was an investment in general
business purposes and two were investments in research programs.
5.3.7 Function 7: creation of legitimacy / counteract resistance to change
The first lobbying activities in favor of nutraceuticals were observed in 1999. These were public
relations efforts that focused on one product. For example, Nutrapharm, Inc. and healthcare agency
SCIENS Worldwide Public Relations launching a national campaign in the US educating consumers
and health professionals about the health benefits of Huperzine A16 (PR newswire, 19-7-1999). Also
several public relations efforts were carried out by Martin Nutraceuticals. Mainly through
infomercials Martin Nutraceuticals tried to educate consumers and health professionals about
Martin Nutraceuticals products (Business Wire, 27-8-2007, 11-10-2007).
Also in 1999 the first negative opinions about nutraceutical products were expressed. An article in
the New York Post (8-8-1999) stated that people should take health claims on food supplements with
a grain of salt. Also several negative opinions relating to fish oil supplements were expressed. For
example, Dr. Gruss, a prominent cardiologist, called 99% of all fish oil supplements on the market
completely worthless (Business Wire, 22-4-2009). Also, makers and sellers of fish oil supplements
were sued in California for not including labeling about PCB contamination (Upi, 2-3-2010). The only
observed collective lobbying activity of the US nutraceutical industry was a response to these
allegations by the Council for Responsible Nutrition (CRN). The CRN issued a statement that there
were no safety issues with fish oil (States News Service, 2-3-2010).
In total a few more positive than negative events have been observed within Function 7 (Figure 5.9).
40
30
20
F7 +

10

F7 -

0
2010

2008

2006

2004

2002

2000

1998

1996

1994

1992

1990

-10

F7 + cum
F7 - cum

-20
-30
-40

Figure 5.9 Score development Function 7: creation of legitimacy / counteract resistance to change US 1990-2011

Lastly, several lawsuits have been observed. These lawsuits have not been taken into account in the
operationalization and have therefore not been included in the event count of the fulfillment of one
of the system functions. However the events can still be found in the historical event database. It is
16

Huperzine A is an acetylcholinesterase inhibititor used in the treatment of Alzheimer's disease

63

expected that lawsuits against producers or developers of a technology have a negatively influence
on the perception of a technology by the general public, and thereby exert a negative influence on
the fulfillment of Function 7.
5.3.8 Performance United States nutraceuticals innovation system
The size of the US nutraceuticals market over the period 1990 2011 is given in Table 5.1. Many
years of data are missing, only the years of which data was available are represented in Table 5.1.
Because data is retrieved from different sources which have used different definitions of the
nutraceuticals market, the data cannot easily be compared with each other. It is only an indication of
how the US nutraceuticals market has grown over time.
The first three figures on the market size of nutraceuticals have been based on definitions that
included functional foods. It is not possible to determine how big the share of nutraceuticals is in
these figures. The last three figures show an approximate market growth of the US nutraceuticals
market of 5 billion US $ over the period 2006 2009 and an approximate market growth of 6 billion
US $ from 2009 to 2010. For this last period this means an estimated market growth of over 20% in
one year. However this is just an indication.
Table 5.1: Market size US nutraceuticals industry
Year
Market size
Comment
nutraceuticals
in billion US $
1997
15.4
Functional foods and nutraceuticals
1998
4.5
Functional foods and nutraceuticals
1999
15.8
Functional foods and nutraceuticals
2006
21.3
2009
26.9
2010
33

Source

Nutrition Business Journal

Frost & Sullivan
Kalorama Information
Datamonitor
Nutrition Business Journal
Reportlinker

Concluding, most System Functions of the US nutraceuticals IS have been well fulfilled over the
period 1990 2011. Many entrepreneurial activities have been observed, thus fulfilling Function 1.
Also many published studies on nutraceuticals and patents on nutraceuticals have been observed
within Function 2. Knowledge diffusion showed many mergers and acquisitions, and many
collaborations between companies and/or research institutes. Thereby Function 3 is fulfilled as well.
Function 4 showed a far greater extend of events positively contributing to the US nutraceuticals IS
than events negatively contributing to the IS, accordingly Function 4 is well fulfilled. Function 5
showed little activities and might seem not adequately fulfilled. However since in 1994 the DSHEA
created a market for nutraceuticals in the US little activity was needed within Function 5. Therefore
Function 5 is said to been fulfilled as well. Function 6 shows a fair amount of events. Moreover, no
expression of the lack of resources within the US nutraceuticals IS has been observed, therefore the
fulfillment of Function 6 has been satisfactory. Function 7 shows approximately an equal amount of
positive as negative events. This means there was still a fair amount of resistance against
nutraceuticals. Function 7 is therefore said to be not adequately fulfilled.
Thus the results of the functional analyses of the European and US nutraceuticals IS have been very
different. The next chapter will analyze and discuss these differences in detail.
64

65

6. Case comparison EU and US nutraceuticals innovation system

Over the past twenty years the global market for nutraceuticals has shown impressive growth rates
estimated between 15% and 20% annually (Hilliam, 2000; Verbeke, 2005). Over the period 1999
2006 the global market for nutraceuticals grew more than tenfold from $5.7 billion to $75.5 billion,
whereas the European market for nutraceuticals only grew less than fivefold from $1.8 billion to $8
billion (Basu et al., 2007). The US market is the largest and most rapidly expanding nutraceuticals
market with an expected annual growth rate of 7% from 2012 till 2015. These figures raise the
question why Europe is lagging behind in this growth. Previous studies have explained the lagging
behind in size and growth of the European nutraceuticals industry by the lack of harmonized
European regulations and the lack consumer acceptance regarding nutraceuticals in Europe. This
research does not study these problems in isolation but uses and innovation systemic approach to
create a better understanding of the strengths and weaknesses of the European nutraceuticals IS.
This chapter focuses on the following research question: What are the strengths and weaknesses of
the emerging nutraceuticals innovation system in the European Union compared to the emerging
nutraceuticals innovation system in the United States over the period 1990 2011?
This chapter compares the development of the European nutraceuticals IS with the US nutraceuticals
IS over the period 1990 2011. The fulfillment of the seven System Functions according the
performed TIS analyses will be discussed over three periods: 1990 1999, 2000 2005, 2006
present. The reason to discern these periods is to increase clarity by highlighting the various
properties of these periods in terms of the fulfillment of the System Functions in both innovation
systems. The symbols F1 F7 refer to the seven System Functions. A (-) sign before F1 F7 denotes a
negative contribution to the IS.
The references of the case comparison between EU and US nutraceuticals Innovation System can be
found in Appendix D.
6.1 1990 1999: The early onset and the lack of regulations regarding nutraceuticals
The first period, 1990 1999, was characterized by the lack of a regulatory system (-F4) for
nutraceuticals in both Europe and the US. In July 1993 the Act on natural remedies came into force in
Sweden (F4) (Nutraceuticals International, 1-7-1993). This Act also controlled nutraceuticals and
Sweden was thereby the first country in the EU to enact legislation on nutraceuticals. During the
same period the lack of regulations in the US triggered calls for US legislation on nutraceuticals (-F4)
(PR Newswire, 1-12-1994). In the US, nutraceuticals were controlled by the Federal Food, Drug, and
Cosmetic Act (F4) (FDA.gov, 2010). Likewise, the EU nutraceuticals were controlled by individual
member states medicine and food law. This meant that in both the US and the EU it was nearly
impossible for manufacturers of nutraceuticals to put nutraceutical products with health claims on
the market since this entailed they would be classified as a pharmaceutical.
This gap in legislation was soon acknowledged by the US Food and Drug Administration (FDA). Little
controversy existed on nutraceuticals in the US according the little events within F7: creation of
legitimacy / counteract resistance to change. Quickly after recognition of the problem of the lack of
regulations on nutraceuticals, the Dietary Supplement Health and Education Act (DSHEA) came into
force in the US in 1994 (F4). This fulfillment of F4 was the most important enabling factor for the
development of a market for nutraceuticals (F5) and the fulfillment of entrepreneurial activities (F1)
in the US. Under the DSHEA manufacturers of nutraceuticals enjoyed a large degree of freedom
regarding the use of health claims. In the US the manufacturer of a nutraceutical is responsible for
the accuracy of a health claim. In practical terms this means little scientific substantiation is needed
66

to use a health claim on a nutraceutical. Because of this large degree of freedom regarding the use of
health claims a market was created for nutraceuticals in the US (F5) and the entrepreneurial
activities (F1) grew fast with 17 observed entrepreneurial activities in 1999. In 1998 the sales of the
US nutraceutical industry were estimated to be US $4.5 billion (PR Newswire, 1-3-1999).
Where in the USA the FDA saw the problem of the lack of regulations for nutraceuticals and took
action, in Europe during the period 1990 1999 the nutraceutical industry was still regulated on
national level (-F4). Consequently market formation on a European level did not take place (-F5) and
the European market for nutraceuticals was fragmented and existed of individual member states
markets. As a result in some markets where liberal regulations regarding health claims on
nutraceuticals were enforced such as the Dutch and UK, a market for nutraceuticals was created (F5)
and entrepreneurial activities (F1) took place. While in other markets, such as the German market,
very strict regulations regarding the use of health claims (-F4) kept market formation (-F5) and
entrepreneurial activities low (-F1). Also, more controversy existed in Europe regarding
nutraceuticals according the higher incidence of both positive and negative events within F7:
creation of legitimacy / counteract resistance to change. In 1999 the sales of the emerging
nutraceuticals industry in Europe was estimated to be US $1.8 billion (Basu et al., 2007).
Thus during this first period, 1990 1999, the signing into law of the DSHEA in the US led to the
fulfillment of F4: guidance of the search. As a result this enabled the fulfillment of F5: market
formation and F1: entrepreneurial activities. In Europe the absence of regulations on a European
level caused the lack of fulfillment of F4: guidance of the search. As a result F5: market formation and
F1: entrepreneurial activities were lagging behind too. Only in a few countries such as the UK and The
Netherlands entrepreneurial activities were taking place because of liberal regulations regarding the
use of health claims on nutraceuticals. Table 4.1 gives an overview the key characteristics of the
seven System Functions over the period 1990 1999 in Europe and the US.
Table 4.1: Key characteristics of the System Functions within
innovation system 1990 1999
System functions Europe
F1:
Entrepreneurial activities limited to
entrepreneurial
countries with liberal regulations
activities
F2: knowledge
Limited research and patents
development
mentioning the term nutraceuticals
F3: knowledge
diffusion

F4: guidance of
the search

F5: market
formation

F6: resources
mobilization

the European and US nutraceuticals

US
Entrepreneurial activities grow
strongly after DSHEA is signed
into law
Limited research and patents
mentioning the term
nutraceuticals
Establishment of trade organizations Establishment of trade
ERNA and IADSA
organization ANA,
First mergers and acquisitions in
first mergers and acquisitions in
1999
1993,
Conferences on lack of regulations
Lack of European regulations,
Dietary Supplement Health and
nutraceuticals are controlled on
Education Act (DSHEA) is signed
national level
into law
Lack of one European market
Market for nutraceuticals is
created after DSHEA is signed
into law
Limited and incidental investments
Gradual rise in investments in
in nutraceutical technology
nutraceutical technology from
67

F7: creation of
legitimacy /
counteract
resistance to
change

Mildly controversy about

nutraceuticals

1997
Little controversy about
nutraceuticals

6.2 2000 2005: Optimism is taken over by uncertainty

The entrance of the first large companies such as Novartis, Numico, and Danone on the European
nutraceuticals market in 1999 marked the transition to a new period for the European nutraceuticals
IS. These large companies were engaging in entrepreneurial activities (F1) driven by confidence in a
growing European market for nutraceutical products. These positive expectations (F4) were fueled by
the growing awareness of consumers about the relationship between diet and health, and the
expectations of the formation of a regulatory framework for nutraceuticals in Europe.
Meanwhile in the US the liberal regulatory framework regarding the use of health claims (F4) made it
easier for nutraceutical companies to market their products, which was visible in the growing
number of entrepreneurial activities (F1). From 2002 and onwards an average of 18 new
entrepreneurial projects (F1) was observed every year. This gradual increase of the total number of
entrepreneurial nutraceutical projects in the US suggested that the emergence of the US
nutraceuticals industry was well in progress and the US nutraceuticals industry was a healthy
industry with sufficient opportunities for entrepreneurs to start a business (F1, F5).
Where in the US expectations on the nutraceuticals industry were mainly positive (F4), in Europe the
optimism that was initially visible in F4: guidance of the search, turned into uncertainty because the
large companies that had entered the European nutraceuticals industry could not obtain significant
market shares. One of the reasons they could not obtain significant market shares was that the large
companies were unfamiliar with the patenting strategies in the nutraceuticals industry. Between
2000 and 2002 no new entrepreneurial activities (-F1) were observed in Europe and in 2002 there
was a growing negative sentiment towards the European regulations (-F4): industry expert Peter
Berry Ottaway amongst others was complaining about the time it took to create harmonized
European regulations for the European nutraceuticals industry. The lack of entrepreneurial activity (F4) in Europe coincides with a strong decrease in investments in nutraceutical projects (-F6) between
2000 and 2004. Furthermore individual member states in the EU were banning several health claims
(-F5) that were making on nutraceutical products. Accordingly the large companies in Europe that
engaged in nutraceutical technology experienced problems in bringing new product to the market (F1): they tried to develop nutraceutical products that were validated with scientific research such as
clinical trials but could not get health claims approved at the European Food Safety Authority (EFSA).
The large companies were unable to obtain significant market shares of the European nutraceuticals
market exited the European nutraceuticals industry around 2003 (-F1). Together with the uncertainty
about regulations on health claims this caused negative expectations about the marketing
opportunities for nutraceutical products in Europe (-F4)
Just before the exit of the large companies from the European nutraceuticals industry there were
some positive expectations (F4) in 2002 regarding Directive 2002/46/EC on the labeling of food
supplements. The European nutraceuticals industry was expecting improvements in the complex
regulatory systems by which it was controlled until then. However because individual member states
were free to interpret and to incorporate Directive 2002/46/EC into their own national laws, there
68

were still many regulatory differences between the different EU countries because of different
interpretations of Directive 2002/46/EC.
Not only in the EU there was criticism on the regulatory framework (-F4) by which nutraceuticals
were controlled. Also in the US there was criticism (-F4), be it from a completely different nature. In
the US criticism came from several physicians and from The Foundation for Innovation in Medicine
(FIM), run by Dr. DeFelice, who coined the term nutraceutical in 1989. Their criticism focused on the
large degree of freedom regarding the use of health claims under the DHEA. According to Physicians
and the FIM this large degree of freedom was hampering knowledge development and scientific
substantiation of nutraceutical products (-F2). Many claims used on nutraceutical products were
backed by little scientific evidence and the US nutraceuticals market was called a cowboy industry
with many misleading nutraceutical products on the market (The Associated Press, 26-1-1993;
Reuters Health Medical News, 15-5-2000). This had a negative influence on the credibility of the
nutraceuticals industry (-F7). To increase scientific substantiation of nutraceutical products
Congressman Frank Pallone, supported by Dr. DeFelice and the FIM, introduced in 1999 The
Nutraceutical Research & Education Act (NREA) into US Congress. The aim of the NREA was to
establish a clinically research based nutraceuticals industry by prescribing a period of exclusive
marketing protection over a health claim for the person or company that demonstrated the health
benefits of a dietary supplement, medical food, or other food. The bill however was not accepted by
US congress and nutraceutical products in the US would still be regulated under the DSHEA and
nutraceutical manufacturers in the US still enjoyed the same degree of freedom regarding the use of
health claims.
Despite most countries in Europe were enforcing stricter regulations than in the US, the lack
scientific substantiation of nutraceutical products was also visible in Europe. From the beginning of
the 2000s more and more suspicious products were entering the European market with scientifically
unsubstantiated health claims (IV5,8). This lack of scientific substantiation (-F2) negatively influenced
the credibility (-F7) of the European nutraceuticals industry. Due to different regulations and new
distribution channels, such as websites on the internet and Facebook, the market was getting more
diffuse and it became more difficult to enforce regulations and ban scientifically unsubstantiated
nutraceutical products off the market (IV5).
Thus several relations between the System Functions were visible during the period 2000 2005.
First positive expectations within F4: guidance of the search stimulated large companies to start
entrepreneurial activities (F1) in Europe. In the US the same mechanism as in the foregoing period
was going on: regulations (F4) had created a market for nutraceuticals (F5) and stimulated
entrepreneurial activities (F1). Then in Europe uncertainty about regulations and the future of the
industry (-F4) took over and stopped entrepreneurial activities (-F1) and investments in nutraceutical
projects (-F6). The lack of regulations in Europe, which influence on F5 and F6 persisted until 2009, is
graphically represented in Figure 6.1.

69

Figure 6.1 Effect of the lack of regulations in European nutraceuticals IS

Lastly there was the recognition of the lack of scientific substantiation (-F2) of many nutraceutical
products in both Europe and the US. Despite many activities were observed in Europe and the US
within F2: knowledge development, this knowledge development failed to lead to a high level of
scientific substantiation of nutraceutical products on the market. This negatively affected F7:
creation of legitimacy / counteract resistance to change in Europe and the US. The effect of the lack
of scientific substantiation of nutraceutical products in the Europe and the US over the period 1990
2009 is graphically represented in Figure 6.2.

Figure 6.2 Effect of the lack of scientific substantiation of nutraceutical products on F7

Table 4.2 gives an overview the key characteristics of the seven System Functions over the period
2000 2005 in Europe and the US.
Table 4.2: Key characteristics of the System Functions within the European and US nutraceuticals
innovation system 2000 2005
System functions Europe
US
F1:
Large companies enter
Entrepreneurial activities reach
entrepreneurial
nutraceutical industry around
steady state
activities
1999 and exit around 2003,
No entrepreneurial activity
between 2000-2002
F2: knowledge
Knowledge development does
Knowledge development does not
development
not lead to scientific
lead to scientific substantiation of
substantiation of nutraceutical
nutraceutical products
products
Number of patents far exceeds
research publications
F3: knowledge
Conferences and meeting about Many coalitions between
diffusion
unclear regulations
companies and/or research
institutes
70

F4: guidance of
the search

F5: market
formation
F6: resources
mobilization
F7: creation of
legitimacy /
counteract
resistance to
change

Optimism in growing
nutraceutical industry turns into
uncertainty due to the lack of
clear regulations
Lack of one European market
No investments in nutraceutical
projects between 2000 2004
Lack of scientific substantiation
negatively affects credibility of
nutraceuticals industry

Many mergers/acquisitions
General expectations are positive
Some experts question the large
degree of freedom regarding
health claims
Nutraceuticals market was created
in foregoing period
Investments in nutraceutical
projects reach steady state
Lack of scientific substantiation
negatively affects credibility of
nutraceuticals industry

6.3 2006 Present: Regulations ensure scientifically substantiated nutraceutical products

In 2006 Regulation (EC) 1924/2006 on nutrition and health claims made on foods came into force in
the EU (F4). The goal of this Regulation was to harmonize individual member states regulations on
nutrition and health claims made on foods and to ensure a high level of protection for consumers,
which in its turn could have a positive effect on F7: creation of legitimacy / counteract resistance to
change. Under Regulation (EC) 1924/2006 a list would be created with permitted health claims that
would be allowed to be used. Despite Regulation (EC) 1924/2006 marked the end of the lack of
harmonized regulation regarding nutraceuticals and health claims in the EU (F4), companies were
uncertain about what health claims they could use and were expecting Regulation (EC) 1924/2006
was going to have a profound negative impact on the marketing of nutraceuticals in Europe (-F4).
Industry organizations such as the Dutch NPN had indicated that Regulation (EC) 1924/2006 marked
the start of a period of uncertainty for European nutraceutical companies (-F4) and as a result
entrepreneurial activities decreased (-F1). After a long 5 year process of scientific evaluation by the
EFSA of the health claims submitted by the European nutraceuticals industry, it is expected that
European Parliament will vote on the approval of the list of approved health claims in 2012. The
uncertainty regarding future business opportunities (-F4) especially affects smaller companies within
the European nutraceuticals industry: the high level of scientific substantiation under Regulation (EC)
1924/2006 requires significant funds to carry out research such as clinical trials.
From 2009 a decrease of uncertainty (F4) amongst nutraceutical companies in Europe is visible. This
can be related to the increased clarity about the implementation of Regulation (EC) 1924/2006.
Additionally, due to Regulation (EC) 1924/2006 scientifically unsubstantiated health claims will
become more difficult to use and will make it more difficult for the earlier mentioned free-riders to
market their products. This can create a scientifically substantiated nutraceuticals market (F2, F5)
and can create new entrepreneurial activities (F1). Accordingly larger companies were again seeking
opportunities in the European nutraceuticals industry (F1) after leaving the European nutraceuticals
industry around 2003 (IV8). This is also visible in the increase of investments (F6) in the European
nutraceuticals industry after 2006. These investments include investments by pharmaceutical firms
such as CNS Pharmaceuticals AG (M2 EquityBites, 12-11-1999). These firms have the experience and
funds to carry out clinical trials. In addition, after 2008 the number of granted patents triples to 93
new patents registered at the EPO in 2009 (F2). This also supports the involvement of large
companies in the European nutraceutical industry; large companies are more focused on patenting
71

than small firms (IV2,3). Furthermore the increased clarity about the future of the industry (F4),
which would again attract large companies to the European nutraceutical industry (F1), is also
supported by the strong decline of the occurrence of both positive and negative events within
Function 4: guidance of the search.
Where in the EU an increase of investments (F6) can be observed in the last few years, in the US a
decrease in investments (-F6) is visible. However, the decline in investments does not seem to have
influenced the start of new nutraceutical entrepreneurial activities; Function 1: entrepreneurial
activities did not show any decline in the start of new nutraceutical projects such as product
launches. The liberal nutraceuticals market in the US had grown in 2006 to US $21.3 billion. In Europe
on the other hand where a higher level of scientific substantiation for the use of health claims is
required the market had grown in 2007 to US $8 billion.
Besides these regulatory differences (F4) which have had an important influence on the fulfillment of
F1: entrepreneurial activities and F5: market formation, both nutraceuticals innovation systems have
also known numerous incidents (-F7), often relating to contamination of fish oil supplements or
contra-indications for the use of fish oil supplements. Furthermore in the US much attention has
been paid in the media in 2006 to a law suit regarding fraud against Enzyte, a male enhancement
supplement. Also other law suits had been observed within the US nutraceuticals IS, however no law
suits were observed within the European nutraceuticals IS. Despite the media attention to the fraud
and other lawsuits (-F7), and also the regular negative opinions on fish oil in the media (-F7), the
publicity did not stuck with consumers for a long time and had little effect on sales (IV5,7).
Concluding, during this last period, 2006 present, Regulation (EC) 1924/2006 has had a two-way
influence in Europe: at first negative expectations and uncertainty about the future of the industry
prevailed (-F4) and as a result entrepreneurial activities decreased (-F1). Then in 2009 the number of
events within F4: guidance of the search started to decrease which is a sign of decreased ambiguity
and increased clarity about the future of the industry. Furthermore, Regulation (EC) 1924/2006 also
creates a research driven market, and thus positively influences F2: knowledge development. The
increased scientific substantiation of nutraceutical products in Europe positively affects (reduces)
consumer skepticism. Also, Regulation (EC) 1924/2006 creates a uniform European nutraceuticals
market. As a result F1: entrepreneurial activities started to rise again in Europe in 2010 and 2011 and
the European nutraceuticals IS is at the beginning of a market with scientifically substantiated
nutraceutical products. These influences are graphically represented in Figure 6.3.

Figure 6.3 Effect of Regulation (EC) 1924/2006 on European nutraceuticals IS

72

In the US nutraceuticals IS little has changed; entrepreneurial activities (F1) were widely taking place
and also the other System Functions were fulfilled. F6: resource mobilization did show a decrease of
events after 2006 but this did not affect other System Functions.
Also negative incidents regarding nutraceuticals within F7: creation of legitimacy / counteract
resistance to change did not negatively affect the other System Function in either Europe or the US.
Table 4.3 gives an overview the key characteristics of the seven System Functions over the period
2006 present in Europe and the US.
Table 4.3: Key characteristics of the System Functions within the European and US nutraceutical
innovation system 2006 present
System functions Europe
US
F1:
Uncertainty regarding Regulation
Entrepreneurial activities on
entrepreneurial
(EC) 1924/2006 causes
steady state
activities
entrepreneurial activities to cease
after 2006.
Entrepreneurial activities rise again
in 2010 and large companies reenter nutraceutical industry
F2: knowledge
Number of newly issued patents
Research and patents mentioning
development
drops after 2006
the term nutraceuticals on steady
state
Number of newly issued patents
increases again in 2009
F3: knowledge
After 2008 activity within F3:
Many coalitions between
diffusion
knowledge diffusion strongly
companies and/or research
decreases
institutes and many
mergers/acquisitions
F4: guidance of
Regulation (EC) 1924/2006 comes General expectations are positive
the search
into force and first causes
uncertainty and then clarity
F5: market
One European market is formed by Nutraceuticals market was
formation
Regulation (EC) 1924/2006
created in foregoing period
F6: resources
Few investments
Investments decline after 2006
mobilization
F7: creation of
Moderate controversy about
Moderate controversy about
legitimacy /
nutraceuticals
nutraceuticals
counteract
resistance to
change
The comparison shows the regulatory framework (F4) can be identified as the common influencing
factor in the development of a market (F5) and the development of entrepreneurial activities (F1).
In the US a liberal regulatory framework regarding the use of health claims created a market for
nutraceuticals (F5) and stimulated entrepreneurial activity (F1). In Europe the lack of harmonized
regulations, and after harmonization the strict regulatory framework (-F4) made it more difficult for a
nutraceuticals market to develop (-F5). Consequently entrepreneurial activity (F1) remained low. As a
result the market for nutraceuticals was larger and grew faster in the US than in the EU.
The comparison did not show differences in consumer skepticism regarding nutraceuticals (F7),
which was used to measure acceptance problems with nutraceuticals. In both the European and US
73

nutraceuticals IS consumers had expressed their skepticism regarding health claims made on
nutraceutical products. This expressed skepticism was only observed several times but could not be
related to the fulfillment of other System Functions.
Furthermore the most significant difference between the European and US nutraceutical innovation
system is that as result of the regulatory differences the scientific substantiation of nutraceutical
products will be higher in Europe than in the US. Consequently consumers will be better protected
against misleading products and can expect higher quality nutraceutical products on the European
market.

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7. Conclusions
The problem studied in this research was framed as the lagging behind in size and growth of the
European nutraceuticals market compared to the global nutraceuticals market and US nutraceuticals
market, which is the largest and most rapidly expanding nutraceuticals market in the world. Earlier
studies showed that the regulatory system for nutraceuticals in Europe and consumer acceptance of
nutraceuticals in Europe were the main causes of the lagging behind of the European nutraceuticals
market. The aim of this study was to compare the European and the US nutraceuticals developments
on innovation systems level to better understand the strengths and weaknesses of the European
nutraceuticals innovation system (IS). Also, the aim was to design policy recommendations to
overcome the weaknesses of the European nutraceuticals IS. Because the term nutraceutical was
coined in 1989 and the first nutraceutical products entered the European market mid 90s, the
studied timeframe was the period 1990 2011.
This chapter will provide the answer the two research questions:
RQ1: What are the strengths and weaknesses of the emerging nutraceuticals innovation
system in the European Union compared to the emerging nutraceuticals innovation
system in the United States over the period 1990 2011?
RQ2: What recommendations can be given to policy makers in the European Union to
overcome the weaknesses of the emerging European nutraceuticals innovation system?
Firstly the European and US nutraceuticals IS were analyzed using the technological innovation
system (TIS) approach. This innovation systemic approach enabled to analyze the European and US
nutraceuticals IS over time. Also the TIS approach enabled to study the specific problems of the
European regulatory system and consumer acceptance of nutraceuticals (which was taken into
account by looking at consumer skepticism) as part of the entire European nutraceuticals IS. The TIS
approach discerns seven System Functions with interact with each other. The better the seven
System Functions are fulfilled, the better the performance of the IS is expected to be. Due to vast
amounts of data available, this research has only included data regarding the nutraceuticals market.
Thus, the domain was narrowed down from the entire European nutraceuticals IS to the European
nutraceuticals market.
Secondly, to overcome the weaknesses of the European nutraceuticals IS for the European Union
policy recommendations are given based on the outcomes of RQ1.
7.1 Conclusions European and US nutraceutical innovation system analyses
The section will answer the first research question:
What are the strengths and weaknesses of the emerging nutraceuticals innovation
system in the European Union compared to the emerging nutraceuticals innovation
system in the United States over the period 1990 2011?

According to the comparison between the EU and the US nutraceuticals IS over the period 1990
2011 it can be concluded that regulations regarding the use on health claims on nutraceuticals was
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one of the most important factors influencing the development of both the European and US
nutraceuticals IS.
In the US nutraceuticals IS the main strength over the period 1990 2011 was the rapid development
of regulations to control health claims on nutraceuticals. The fulfillment of F4: guidance of the search
in the form of the Dietary Supplement Health and Education Act (DSHEA) was the most important
enabling factor for the development of a market for nutraceuticals (F5) in the US. Under the DSHEA
nutraceuticals were recognized as dietary supplements and manufactures of nutraceuticals enjoyed
significant freedom regarding the use of health claims on nutraceutical products. By allowing health
claims on nutraceuticals, new marketing opportunities for nutraceutical manufactures arose and a
market for nutraceuticals was created (F5). The creation of a market stimulated the fulfillment of F1:
entrepreneurial activities; after the introduction of the DSHEA in 1994 the US nutraceuticals industry
showed a large number of entrepreneurial activities. Furthermore, a strong growth of the
nutraceuticals market was observed.
In Europe the lack of regulations on health claims between 1990 an 2006, and thus the lack of
fulfillment of F4: guidance of the search was one of the main weaknesses of the European
nutraceuticals IS. It took until 2006 before a regulation regarding the use of health claims was
designed on a European level: Regulation (EC) 1924/2006 on health claims. It took another 6 years
until full implementation of this regulation. Until then the lack of regulations on health claims had as
a result that the development of a market for nutraceuticals in Europe (F5) went problematic. The
individual European countries applied different national regulations and this resulted in the lack of
one uniform European nutraceuticals market. The fragmented European nutraceuticals market made
it difficult for nutraceutical manufactures to market their product internationally. As a result, large
food and pharmaceutical companies which entered the European nutraceuticals industry around the
year 2000 could not obtain significant market shares and most of these companies left the
nutraceuticals industry around 2002/2003. Consequently, besides F5: market formation, F1:
entrepreneurial activity also lagged behind.
Additionally, expert interviews showed that from 2000 onwards the ongoing lack of regulations
caused uncertainty about the future of the European nutraceuticals market (-F4). This uncertainty
made nutraceutical companies hesitant to invest in new nutraceutical projects and thus negatively
affected the fulfillment of F6: resource mobilization in Europe. The negative influence of the lack of
regulations on the European nutraceuticals IS persisted until 2009.
Another weakness of the European and even more for the US nutraceuticals innovation system was
the lack of scientific substantiation (-F2) of many nutraceutical products. This lack of scientific
substantiation was not the result of the lack of fulfillment of F2: knowledge development. In the US
the large degree of freedom under the DSHEA regarding the use of health claims meant the DSHEA
did not provide incentives for nutraceutical research. Thereby the DSHEA was hampering scientific
substantiation of nutraceutical products (-F2). The lack of scientific substantiation of nutraceutical
products encouraged consumer skepticism and had a negative influence on the credibility of the
nutraceuticals industry (-F7). What is notable in this respect is that despite the large number of
activities within F2: knowledge development, this knowledge development failed to lead to a high
level of scientific substantiation of nutraceutical products on the US nutraceuticals market.
In Europe the lack of scientific substantiation (-F2) of many nutraceutical products was the result of
the lack of a European inspection agency that could effectively ban scientifically unsubstantiated
nutraceutical products off the market. New sales channels such as websites, Facebook, and Ebay
created opportunities for companies to market scientifically unsubstantiated nutraceutical products
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to consumers. Because of the new sales channels these nutraceutical companies were difficult to
trace by (national) inspection agencies. Also in Europe the scientifically unsubstantiated nutraceutical
products entering the market encouraged consumer skepticism towards nutraceutical products,
which negatively affected F7: creation of legitimacy / counteract resistance to change.
The so far weak European nutraceutical innovation system changed significantly when in 2006 the
European Commission enacted Regulation (EC) 1924/2006 regarding the use of health claims.
Regulation (EC) 1924/2006 was based on the precautionary principle, in which consumer protection
has a high priority, and had as goal to harmonize different national regulations. It had a two-way
influence on the European nutraceuticals IS: firstly, the nutraceuticals industry was uncertain about
the health claims the industry could use in the future. This uncertainty negatively affected the
fulfillment of F4: guidance of the search and had a negative influence on entrepreneurial activities (F1) in the European nutraceuticals IS. Secondly, when around 2009 it became clear how the
European nutraceuticals market would look like after the full implementation of Regulation (EC)
1924/2006, uncertainty decreased and entrepreneurial activities (F1) started to rise again. By
assuring a high level of consumer protection by demanding a high level of scientific substantiation of
health claims on nutraceuticals, Regulation (EC) 1924/2006 created a research driven market, and
thus positively influenced F2: knowledge development. Also, because Regulation (EC) 1924/2006
harmonized the different national regulations, it created one uniform European nutraceuticals
market and positively influenced F5: market formation. Furthermore, the high level of consumer
protection results in a European market with nutraceutical products with scientifically substantiated
health claims. This reduces consumer skepticism towards nutraceutical products, and accordingly
positively affects F7: creation of legitimacy / counteract resistance to change. Therefore Regulation
(EC) 1924/2006 can be regarded as the main strength of the European nutraceuticals innovation
system: it has created a European market with only scientifically substantiated products. Ergo, these
nutraceutical products can really benefit consumers.
Besides these influences, Regulation (EC) 1924/2006 is expected to have some other consequences
as well. At the moment entrepreneurial activity (F1) in the European nutraceuticals innovation
system mainly comes from small companies. Because the approval of new health claims requires
significant scientific research and evidence such as clinical trials, it is expected that entrepreneurial
activity in the future will to a greater extent come from large companies (mainly originating from
pharmaceutical and food companies) which have sufficient funds to pay for such studies. The small
companies that cannot get health claims on their products approved are not expected to completely
disappear. It is expected that small companies will divert their strategies towards endorsement
practices to promote the health benefits of their products at general practitioners, alternative
medicine doctors, and start public relations activities. In this way the small companies are still able to
inform consumers about the health benefits of their products without expensive research and the
use of health claims.
Concluding, over the period 1990 2006 the main weaknesses of the European nutraceuticals
innovation system was the lack of European regulations regarding the use of health claims on
nutraceuticals, and thus the lack of fulfillment of F4: guidance of the search. This influenced the lack
of fulfillment of F5: market formation and the lagging behind of F1: entrepreneurial activity. The
ongoing lack of regulations created uncertainty about the future of the European nutraceuticals
market (-F4) which had a negative effect on the fulfillment of F6: resource mobilization.

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In the US the opposite happens. The early creation of regulations regarding the use of health claims
(F4) created a market for nutraceuticals (F5). As a result many entrepreneurial activities (F1) take
place which allowed for a strong growth of the US nutraceuticals industry.
Another weakness of the European and also the US nutraceuticals innovation system was the lack of
scientific substantiation (-F2) of many nutraceutical products which lead to consumer skepticism and
thereby negatively affected F7: creation of legitimacy / counteract resistance to change.
The main strength of the European nutraceutical innovation system is Regulation (EC) 1924/2006. At
first it created uncertainty in the European nutraceuticals industry about the health claims the
industry could use in the future. In 2009 this uncertainty reduces. By harmonizing national
regulations on health claims Regulation (EC) 1924/2006 positively influenced F5: market formation.
Market formation in its turn positively influenced F1: entrepreneurial activity. Furthermore, by
demanding a high level of scientific substantiation, Regulation (EC) 1924/2006 stimulates F2:
knowledge development. By assuring a high level of scientific substantiation of nutraceutical
products, consumers will be protected against scientifically unsubstantiated nutraceutical products.
Thereby consumer skepticism is reduced and F7: creation of legitimacy / counteract resistance to
change is positively affected.
Innovative activities in the European and US nutraceuticals industry in the past focused on bringing
new products to the market without scientific substantiation, and were thus more marketing
focused. In the US there are no signs that this will change. In Europe, however, the introduction of
Regulation (EC) 1924/2006 in 2006 created a more research oriented nutraceuticals industry:
innovation could from then on focus on product innovation based on science with scientifically
substantiated nutraceutical products as a result.
The next section discusses the implications of these results and gives recommendations to policy
makers in the European Union.
7.2 Policy recommendations
The policy recommendations to overcome the weaknesses of the European nutraceuticals innovation
system have been dealt with in the second research question:
What recommendations can be given to policy makers in the European Union to
overcome the weaknesses of the emerging European nutraceuticals innovation system?
Regulation (EC) 1924/2006 on health claims is the first big policy measure at European level that has
had a profound influence on the European nutraceuticals industry. It has had a positive effect on F5:
market formation which in its turn will positively affected F1: entrepreneurial activity. However,
Regulation (EC) 1924/2006 has some consequences for the nutraceuticals industry which need to be
taken into account for Regulation (EC) 1924/2006 to be successful. First, Regulation (EC) 1924/2006
threatens small nutraceutical companies in Europe in their existence because it becomes difficult for
them to bring new nutraceutical products with health claims market due to the required scientifically
substantiated of health claims. Because of their limited financial resources they cannot pay for
research to scientifically substantiate the health claims on their products and thus from their
perspective Regulation (EC) 1924/2006 is hampering innovation. Since the current European
nutraceuticals industry mainly consists of small companies, the nutraceuticals industry is pressing for
a more liberal regulatory regime in which a system with gradation in health claims is implemented. A
gradation in health claims would make it possible for nutraceutical manufacturers to also use health
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claims that have not been scientifically proven. A disclaimer, like in the US, would then state the
degree of scientific uncertainty regarding the health claim. The European nutraceuticals industry
argues this would create an incentive to innovate and will stimulate entrepreneurial activity (F1)
because new products can be marketed at an earlier stage with limited scientific substantiation.
However, the first goal of Regulation (EC) 1924/2006 is to assure a high level of consumer protection.
A gradation system in health claims does not correspond with this first goal of consumer protection,
and the implementation of a grading system in health claims is therefore not recommended to policy
makers in the European Union (EU).
The interviews revealed that nutraceutical companies that cannot get health claims approved on
their nutraceutical products are expected to direct their marketing strategies towards endorsement
practices. These endorsement practices will entail the start up of public relations activities to inform
consumers about the health benefits of nutraceutical products. The interviews also revealed that
nutraceutical companies that cannot get health claims approved on their nutraceutical products are
expected to seek contact with natural therapists and other forms of alternative medicine providers
to still be able to communicate with consumers, be it not directly through marketing activities. In
order for consumers to make informed choices about nutraceutical products it is important that
national governments provide consumers with objective information through public relations
activities. Thus, there should be public relations agencies in the individual European countries that
provide consumers with complete and unbiased information about nutraceuticals so consumers can
make informed choices about the use of nutraceuticals and their potential health benefit. This can
decrease consumer skepticism and increase consumer acceptance of nutraceuticals in Europe.
The most important policy measure to be taken for Regulation (EC) 1924/2006 to be successful is the
establishment of a European inspection agency that monitors the nutraceuticals market and can
effectively ban products that make scientifically unsubstantiated health claims off the market.
Because of the current absence of an inspection agency at European level, such products can still
exist and can only be banned from the market when another company presses legal charges.
Manufactures of scientifically unsubstantiated nutraceutical products lack the high investments for
scientific substantiation of health claims. Thereby it becomes very difficult for companies that do
invest in expensive clinical research to bring products on the market for a competitive price. In this
way the European nutraceuticals market is disrupted and innovation in products that are proven to
be effective is hampered. As a result the industry is bringing few quality products to the market.
The presence of a European inspection agency will contribute to entrepreneurial activity (F1) by
ensuring fair competition, and will benefit F7: creation of legitimacy / counteract resistance to
change by increasing consumer thrust in nutraceutical products by assuring a high level of scientific
substantiation of the health claims on nutraceutical products on the European market.
Concluding, Regulation (EC) 1924/2006 is the first step to a European market with scientifically
substantiated nutraceutical products. To achieve a scientifically substantiated European
nutraceuticals market the EU and should establish an inspection agency that monitors the market
and can ban nutraceutical products that make scientifically unsubstantiated health claims off the
European market. Furthermore the individual European countries should have public relations
agencies that provide consumers with complete and unbiased information about nutraceuticals and
their potential health benefits. Lastly, the EU should not implement a grading system in health claims
since this would decrease the scientific substantiation of nutraceutical products on the European
market.

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8. Discussion
This research studied the problem of the lagging behind in size and growth of the European
nutraceuticals market compared to the US and global nutraceuticals market, and more specifically
the problem of the regulatory framework in Europe and the lack of consumer acceptance of
nutraceuticals in Europe. The emerging European and US nutraceuticals innovation systems were
mapped and compared with each other using the TIS approach. The strength of the TIS approach lies
in using a specific technology as a starting point, and focusing on the system level as the core unit of
analysis (Suurs and Hekkert, 2009; Hekkert et al., 2007). Comparing the European and US
nutraceuticals innovation systems created a better understanding of the strengths and weaknesses
of the European nutraceuticals innovation system. This chapter will discuss whether the study was
adequately set up and whether the obtained results were accurate and able to answer the research
questions. Furthermore this chapter will discuss starting points for future research.
Discussion of results in relation to previous studies
Previous studies on the lagging behind in size and growth of the European nutraceuticals market
compared to the US and global nutraceuticals market have assumed that consumer acceptance was
one of the main reasons for the slow growth of the European nutraceuticals industry (Granato et al.,
2010; Lhteenmki et al., 2010; Ares and Gmbaro, 2007; Verbeke, 2005; Menrad 2003; Urala and
Lhteenmki, 2003; Weststrate et al. 2002, among others). This study took consumer acceptance of
nutraceuticals into account by looking at expressed consumer skepticism regarding nutraceuticals in
the dataset. The comparison between the EU and the US nutraceuticals innovation systems showed
little differences regarding consumer skepticism and no strong indications were found that
supported the assumption that consumer acceptance was one of the main reasons for the slow
growth of the European nutraceuticals industry. In the US nutraceuticals innovation system more
lobbying activities (F7) in favor of nutraceuticals were observed. However, most of these lobbying
activities consisted of product specific public relations campaigns and could therefore not directly be
related to a more positive attitude of the American consumer towards nutraceuticals. Both in the EU
and the US nutraceuticals innovation system there were negative opinions (-F7) towards
nutraceutical products and the associated health claims. However, a large difference in the amount
of skepticism towards nutraceuticals products (-F7) had not been observed. Moreover, the
introduction of Regulation (EC) 1924/2006 could increase European consumers thrust in
nutraceutical products and the European nutraceuticals industry (F7) because no scientifically
unsubstantiated health claims on nutraceutical products are allowed anymore on the European
market.
Other studies found that firms encounter several problems due to regulations that might hamper the
nutraceuticals innovation process and market access (Gilsenan, 2011; Bech-Larsen and Scholderer,
2007; Yeung et al., 2007; Coppens et al., 2006; Kwak and Jukes, 2001). This earlier work is in line with
the results of this study which showed that the lack of regulations in Europe regarding the use of
health claims on nutraceuticals caused the lack of fulfillment of F4: guidance of the search, which
created the lack of fulfillment of F5: market formation which in its turn negatively influenced the
fulfillment of F1: entrepreneurial activity, and entrepreneurial activity is necessary for a market to
grow.

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Reflections on method
By framing the problem of the European nutraceuticals innovation system as the lagging behind in
terms of market size and growth (in Euros), with specific the problems of the regulatory framework
and lack of consumer acceptance of nutraceuticals in Europe, the TIS approach was a suitable
method for this research. TIS studies in general are better in describing the enabling and constraining
factors than in explaining why the TIS developed as it did. The emergence of a technological
innovation system is too complex to determine causal relationships by studying the entire system.
Therefore this study was not meant to determine causal relationships; it was designed to study
general patterns of change and interactions within the TIS. By taking the entire nutraceuticals IS into
account, it was possible to study the specific problems regarding regulations and consumer
acceptance not in isolation but as part of the entire nutraceuticals IS, which created a more
comprehensive understanding of origins of these problems and their influence on the European
nutraceuticals innovation system.
However during data collection several difficulties occurred. First, public data on the dependent
variable market size of the European and US nutraceuticals market was limitedly available. The data
that was available came from different sources, which used different definitions of the term
nutraceutical. This made it difficult to compare the data. Only rough estimations of the growth of
the European and US nutraceuticals market could be made. Second, the operationalization made it
difficult to assign several unforeseen events to one of the System Functions. Such events were
people that switched jobs between companies, law suits, and endorsement practices. This problem
was solved by retrospectively adding these events to the most appropriate System Function and see
whether general patterns within System Functions had changed. No major changes of patterns
occurred: it was a limited number of events in relation to the total number of event observed in both
analyses. However it cannot be excluded that data has been biased and therefore in future studies it
is recommended to include these events in the operationalization, which will be discussed later in
this discussion.
Despite these difficulties, the TIS approach has been successful in describing the lagging behind in
size and growth of the European nutraceuticals industry compared to the US nutraceuticals industry.
Because of the differences in market size and growth of the European and US nutraceuticals industry
the comparison between the two created more insights in the European nutraceuticals IS than when
only the European nutraceuticals IS was considered. These insights helped to describe the strengths
and weaknesses of the European nutraceuticals industry. In both cases a common factor, the
regulatory framework, enabled or restrained the growth of the nutraceuticals industry. Thus,
because of the comparison, the regulatory framework can with a larger degree of certainty be
related to the difference in size and growth between the European and US nutraceuticals industry.
The objective was to measure the fulfillment of the System Functions by including all events that
could have had an influence on the nutraceuticals innovation system. Initially, the historical event
database of the European nutraceuticals innovation system consisted about 5000 articles which were
analyzed and resulted in 533 events. For the historical event database of the US nutraceuticals
innovation system over 10.000 press articles were found in the LexisNexis database that contained
the term nutraceutical when searching within the geographical area of the US. Due to time
constraints the results were narrowed down by selecting Nutraceuticals under the header Market,
so only articles that were tagged in the LexisNexis database as relating to the nutraceuticals market
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were analyzed. This resulted in a more manageable amount of 4000 articles that needed to be
analyzed. To make a sound comparison possible between the European and the US nutraceuticals
innovation system, the sources for the European historical event database needed to be narrowed
down to articles in the LexisNexis database regarding the nutraceuticals market too. This meant that
68 out of 533 events needed to be deleted from the European historical event database to make a
sound comparison, since the articles in which they had been found did not belong to the
nutraceuticals market according the LexisNexis database. To increase the construct validity of the
European nutraceuticals innovation system analysis, data was triangulated by including interviews
with experts from the European nutraceuticals industry. This helped to verify whether the observed
results of the European TIS analysis were correct, and to create a better understanding of the
perspectives of the different actor groups and unravel their underlying assumptions and motives
regarding to nutraceutical technology. No interviews could be arranged with people from outside the
Netherlands. Nevertheless, most Dutch interviewees were also closely involved in developments
regarding the European nutraceuticals IS that occurred on a European level. Unfortunately for the US
nutraceuticals IS analysis no interview data could be obtained.
Narrowing down of the European and US historical event databases by only selecting articles in the
LexisNexis database regarding the nutraceuticals market has influenced the construct validity: it was
intended to measure the development of the European and US nutraceuticals innovation systems,
however strictly speaking only the European and US nutraceuticals market has been taken into
account. Accordingly the domain of the study to which the results apply is narrowed from the
European and US nutraceuticals innovation systems to the European and US nutraceuticals market.
Nevertheless it needs to be considered that the European and US nutraceuticals market to a great
extend overlap with European and US nutraceuticals innovation systems and thus the results can to a
great extend be extrapolated to the entire nutraceuticals IS.
It is difficult to determine whether internal validity is met, also, explorative case studies such as this
research are not so much concerned with testing causal relations but more with the broader problem
of making inferences between variables (Yin, 2009). The internal validity of the study has also been
negatively affected by selection bias that occurred while building the historical event databases of
the European and US nutraceuticals IS. This selection bias occurred when the domain of the study
was narrowed down to the nutraceuticals market as described above, and the fact that only English
language news has been analyzed. In the European historical event database there is a chance that
important events have been missed due inability of analyzing news written in languages other than
English or Dutch. However, for events occurring on the European level (such as regulations) this bias
was minor since events that have had a European wide influence on the development of the
European nutraceuticals innovation system, such as EU regulations or European lobbying activities,
are generally published in several languages, including English.
The external validity is the degree to which the results of this study can be generalized and can be
established by comparing the outcomes of the study to similar cases. However, since no similar cases
have been found that apply the TIS approach it is difficult to determine the external validity of the
results. The emerging nutraceuticals industry is a technological specific innovation system and the
results of this study that describe the strengths and weaknesses of the European nutraceuticals
innovation system do not simply apply to other domains too. Therefore this study compared the
cases of the European and the US nutraceuticals IS with each other to take into account the external
validity. In both cases a common factor, the regulatory framework, enabled (US) or restrained
(Europe) the growth of the nutraceuticals industry. Also, the same mechanism was observed; the
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fulfillment of F4: guidance of the search, influenced the fulfillment of F5: market formation, which
influenced the fulfillment of F1: entrepreneurial activity. Since in both cases the same mechanism
has been identified, the external validity is increased. However the generalizability is limited since
only two cases have been compared.
By carefully documenting the process of data collection and data analysis and documenting the data
in the historical event database a high level of reliability of the historical event database is assured.
However the identification and assignment of events to the System Functions is dependent upon the
interpretation of the researcher which makes the TIS approach susceptible to bias. The reliability of
this study could be increased by including an extra researcher in the process of assigning the events
to the System Functions. Furthermore the historical event database is included in the appendix on a
CD-ROM and all interviews have been audio recorded to increase the reliability of the results.
Relevance of the research
The societal relevance of this study lies in the policy recommendations given in the conclusions.
Especially the creation of a European inspection agency that monitors if no illegal health claims are
made can have a large societal impact since this can ensure that only nutraceutical products with
proven health benefits will reach the European market.
Furthermore regarding the theoretical relevance, this study has shown that the TIS approach can be
a valuable tool in analyzing the dynamics in emerging innovation systems in the life-science field. The
TIS approach is a well known tool in the analyses of emerging innovation systems in the energy
sector, but is rather new in analyses of emerging innovation systems in the life-sciences field. The
power of the TIS approach lies within the mapping of events over time, which helps to structure the
vast amount of data and enables a dynamic analysis of an emerging IS.
However, it is important for future studies to take several aspects into account when applying the TIS
approach in the life-science field. First, a fair amount of people had been found that switched jobs
between companies. This activity could be added to Function 3: Knowledge diffusion since the
transfer of an employee to another company entails the transfer of knowledge possessed by that
person as well.
Second, life-science industries are often characterized by strict regulations, which are measured
within Function 4: Guidance of the search, as positive and negative sentiment towards regulations.
This study found that regulations play an important role in the development and diffusion of a
technology in the life-science field. It needs to be ensured that possible enabling or restraining
regulations for the success of a technology are included in the analysis, not only the sentiment
expressed regarding regulations. Therefore all regulations regarding the technology, including their
contents, need to be considered. The aim is to determine the positive or negative contribution of the
regulation on the technological innovation system. Thus, for future studies applying the TIS approach
in the life-science field it is recommended to include a new System Function: Regulations. This
enables to differentiate between expectations, which are guiding and belong to guidance of the
search, and regulations, which are institutional factors that are often compulsory and determine the
framework conditions with which a technology has to comply. Another argument to include a new
System Function: regulations, is that expectations about a technology are not always consistent with
the regulations that are designed by governments. By measuring expectations and regulations within
a separate System Function clarity is increased on how each these Functions (i.e. guidance of the
search and regulations) influences the emerging IS. After all, the essence of F4: guidance of the

85

search is providing clarity about consumer needs and technological possibilities (Hekkert and Negro,
2009).
Function 7: creation of legitimacy / counteract resistance to change, also requires special attention.
This function is about creating legitimacy for a new technological trajectory. Several law suits had
been found against firms in the US nutraceuticals industry. Lawsuits can have a major influence on
the perception of a technology by consumers and other actor groups within an innovation system.
Therefore for future studies applying the TIS approach in the life-science field it is recommended to
include law suits regarding the producers or developers of a technology within Function 7: creation
of legitimacy / counteract resistance to change. Also several activities had been found on the
boundary between providing information and marketing activities. Examples of such activities are
infomercials and the informative websites by the industry. These activities generally aimed at
showing the benefits of nutraceuticals and increasing the sales of nutraceuticals. By providing
information these endorsement practices were more than just merely marketing activities. Because
such activities create legitimacy among actors in the innovation system, endorsement practices are
recommended to be included within Function 7: creation of legitimacy / counteract resistance to
change, in future studies applying the TIS approach in the life-science field.
Concluding, by applying the TIS approach to the case of European and US nutraceuticals innovation
system this study has contributed to innovation literature by adding to the understanding of
emerging technological innovation systems in the life-science field in general. It has demonstrated
that regulations are of high importance and suggested to incorporate regulations in future TIS studies
in the life-science field in a separate System Function. Together with incorporating job switches
within Function 3: Knowledge diffusion, and lawsuits and endorsement practices within Function 7:
creation of legitimacy / counteract resistance to change, these additions should contribute to a more
comprehensive understanding of an emerging life-science technology. Future TIS studies on
emerging life-science technologies can now focus on how to operationalize these new variables and
verify the added value of these new variables for future TIS studies in the life-science field.

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List of tables and figures

Table 3.1: Operationalization of the system functions
Table 3.2: Interviews European nutraceuticals IS
Table 4.1: Market size European nutraceuticals industry
Table 5.1: Market size US nutraceuticals industry
Table 4.1: Key characteristics of the System Functions within the European and US nutraceuticals
innovation system 1990 1999
Table 4.2: Key characteristics of the System Functions within the European and US nutraceuticals
innovation system 2000 2005
Table 4.3: Key characteristics of the System Functions within the European and US nutraceutical
innovation system 2006 present
Figure 2.1 Relationship between food, functional food, nutraceuticals, and pharmaceuticals (Dharti et
al., 2010, p34)
Figure 2.2 A national innovation system model (Kuhlmann and Arnold, 2001)
Figure 2.3 Potential overlap of technological innovation system within national and sectoral
innovation systems (Negro, 2007, p27)
Figure 4.1. A structural framework of the European nutraceutical innovation system model (based on
Kuhlmann and Arnold, 2001)
Figure 4.2 Timeline of important events in the European nutraceuticals IS
Figure 4.3 Score development Function 1: Entrepreneurial activities EU 1990-2011
Figure 4.4 Score development Function 2: Knowledge development EU 1990-2011
Figure 4.5 Score development Function 3: Knowledge diffusion EU 1990-2011
Figure 4.6 Score development Function 4: Guidance of the search EU 1990-2011
Figure 4.7 Score development Function 5: Market formation EU 1990-2011
Figure 4.8 Score development Function 6: Resource mobilization EU 1990-2011
Figure 4.9 Score development Function 7: creation of legitimacy / counteract resistance to change EU
1990-2011
Figure 5.1 A structural framework of the US nutraceutical innovation system model (based on
Kuhlmann and Arnold, 2001)
Figure 5.2 Timeline of important events in the US nutraceuticals IS
Figure 5.3 Score development Function 1: Entrepreneurial activities US 1990-2011
Figure 5.4 Score development Function 2: Knowledge development US 1990-2011
Figure 5.5 Score development Function 3: Knowledge diffusion US 1990-2011
Figure 5.6 Score development Function 4: Guidance of the search US 1990-2011
Figure 5.7 Score development Function 5: Market formation US 1990-2011
Figure 5.8 Score development Function 6: Resource mobilization US 1990-2011
Figure 5.9 Score development Function 7: creation of legitimacy / counteract resistance to change US
1990-2011
Figure 6.1 Effect of the lack of regulations in European nutraceuticals IS
Figure 6.2 Effect of the lack of scientific substantiation of nutraceutical products on F7
Figure 6.3 Effect of Regulation (EC) 1924/2006 on European nutraceuticals IS

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Appendix A: Interview questions European nutraceutical innovation system

analysis
Welkom, voorstellen + korte uitleg studie
-vragen of je gesprek mag opnemen, na uitwerking interviewverslag opgestuurd ter correctie etc
Actor specifiek
- Wat is uw rol in het nutraceutical en voedingssupplementen Innovatie systeem? (wat zijn uw
verrichtingen, doelen, verantwoordelijkheden etc)
- Op welke momenten heeft u een rol gespeeld in nutraceutical en voedingssupplementen
innovatie in EU? (vroege fase, later, op elk moment)
Laat ingevulde Nutra IS systeem plaatje voor EU zien en vraag om voor elk blok wele actoren er actief
zijn. Daarnaast specifiek:
- Zijn er grote bedrijven in het innovatiesysteem actief? Zo ja welke?
- Wat zijn tegenwoordig de belangrijkste nutraceutical producten op de markt?
- Welke reguleringen zijn belangrijk met betrekking tot nutraceuticals?
- Kloppen de verbanden in het plaatje?
- Ontrbreekt er nog iets in het plaatje?
Functie analyse
Vragen mbt Functie 1: Entrepreneurial activities (ondernemingsactiviteit)
Hoe is het gesteld met het ondernemingsklimaat van de nutraceutical industrie?
Welke nieuwe ontwikkelingen/ondernemersactiveiten verwacht u in de toekomst? (andere
producenten, personalized nutrition etc.)
Wat vind u van de innovativiteit van de Europese nutraceutical sector?
Vragen mbt Functie 2: Knowledge development (kennisontwikkeling)
Wanneer is het onderzoek mbt nutraceuticals begonnen?
Waar vind onderzoek mbt tot nutraceuticals vooral plaats? (universiteiten, bedrijven, TNO,
etc)
Spelen patenten een belangrijke rol in de Europese nutraceutical industrie?
In 2009 verdrievoudigd het aantal nieuwe patenten bij de EPO. Heeft u een verklaring voor
deze ontwikkeling?
Welke kennis ontwikkelingen in de afgelopen 20 jaar zijn belangrijk geweest voor de
ontwikkeling van nutraceuticals? (onderzoeksresultaten, technologische ontdekkingen)
Is er een gebrek aan kennis dat het succes van Nutraceuticals innovaties belemmert? Zo ja,
waar zou toekomstig onderzoek zich op moeten richten?
Vragen mbt Functie 3: Knowledge diffusion (kennis verspreiding)
Hoe is het gesteld met de kennisoverdracht mbt nutraceuticals van universiteiten naar
bedrijven?
Welke partijen zijn hoofdzakelijk betrokken bij kennisverspreiding mbt nutraceuticals in EU?
Waar lag in het verleden de nadruk op bij congressen en conferenties mbt nutraceuticals en
waar ligt tegenwoordig de nadruk op?
Op welke manieren denkt u dat het beste kennis over nutra verspreid kan worden naar
gerelateerde partijenen?

Vragen mbt Functie 4: Guidance of the search (regelgeving)

93

Zijn er op Europees niveau projecten die nutraceutical innovaties stimuleren?

Hoe zijn de verwachtingen in het verleden geweest mbt de ontwikkeling van een markt voor
nutraceuticals?
Heeft het verschil in reguleringen tussen de Europese landen in het verleden een remmend
effect gehad op de innovativeit en het ondernemingsklimaat van de sector?
Heeft de langzame ontwikkeling van reguleringen op Europees niveau in het verleden een
remmend effect gehad op de innovativeit en het ondernemingsklimaat van de sector?
Hoe worden de huidige reguleringen ervaren? (met name Regulation (EC) 1924/2006)?
Meer dan 95% van de claims op voedingssupplementen is afgewezen. Wat voor impact heeft
dit gehad op de sector?
Zal 1924/2006 een positieve uiwerking hebben op innovatie?
Wat zouden de EU overheden/overheidsinstanties beter kunnen doen mbt regelgeving in zijn
algemeenheid? Gedaan kunnen hebben?
Wat zouden de EU overheden/overheidsinstanties ter ondersteuning van de industrie
kunnen doen? Gedaan kunnen hebben?

Vragen mbt Functie 5: Market formation

Hoe is het gesteld met de bereidheid tot investeren in nutraceutical bedrijven?
Wat zijn de voornaamste remmende en stimulerende ontwikkelingen geweest op de
ontwikkeling van een markt voor nutraceuticals in Europa? Wat had er anders moeten
gebeuren?
Wat voor effect hebben deze ontwikkelingen gehad op de bereidheid tot investeringen in de
Europese nutraceutical industrie?
Vragen mbt Functie 6: Resources mobilization
Welke resources met name belangrijk? (Financial, human, social etc)
Vragen mbt Functie 7: Creation of legitimacy / counteract resistance to change (lobby activiteiten)
Zijn er veel incidenten geweest mbt tot nutraceuticals? Zo ja wat is de invloed hirevan
geweest op de (Europese) markt? (bv. dioxine visolie)
Hoe staat de consument tegenover nutraceuticals?
hoe is het gesteld met de geloofwaardigheid van de industrie?
Zijn er vanuit de industrie veel activiteiten ondernomen om het imago te verbeteren?
Zijn er mediagebeurtenissen (Tv, krantenberichten) die invloed hebben gehad op het imago
van de nutraceutical industrie?
Wat vindt u van de rol van wetenschappers, media, politiek, etc mbt lobby rondom
nutraceuticals?
Algemene vragen
- Wat zijn de sterke punten van het nutraceutical innovatiesysteem? (zowel technologisch als
beleidsmatig, hoe bedrijven met elkaar omgaan, of op markt opereren, etc.)
- Wat zijn de zwakke punten van het nutraceutical innovatiesysteem?
- Hoe kan de markt voor nutraceuticals succesvoller worden gemaakt?
Overig:
-

heeft u nog vragen of opmerkingen over nutraceuticals innovaties in EU?

heeft nu nog vragen of opmerkingen over mijn onderzoek?
Weet u nog andere partijen/personen die u mij aanraad om te interviewen?
Heeft u gegevens over de grote van de de Europese nutraceutical markt?

94

Appendix B: References European nutraceuticals innovation system

analysis (1990 2011)
References narrative European nutraceuticals innovation system 1990 2011
Nutraceuticals International, 1-8-2002, European Union proposes legislation on all food claims by
Peter Berry Ottaway
Nutraceuticals International, 1-7-1993, Natural remedies market in Sweden - the rules and
regulations
Nutraceuticals International, 1-7-1996, Sandoz expands nutraceutical facility
Nutraceuticals International, 1-9-1996, Nutrition For Life enters UK market
Nutraceuticals International, 1-8-1996, Forthcoming meetings/events
Nutraceuticals International, 1-7-1996, Current legislation "not equipped to deal with nutraceuticals"
ec.europa.eu, 1997, http://ec.europa.eu/food/food/biotechnology/novelfood/index_en.htm
(accessed 19-3-2010)
Nutraceuticals International, 12-9-1996, Forthcoming Meetings/Events
Nutraceuticals International ,1-1-1997, Forthcoming Meetings/Events
Nutraceuticals International, 1-10-1997, Forthcoming Meetings/Events
Nutraceuticals International, 1-5-1998, French food industry takes nutraceuticals on board.
Extel Examiner, 12-3-1999, Amsterdam shares higher in buoyant midday trade on Lafontaine
resignation
Extel Examiner, 27-8-1998, FOCUS: Novartis restructuring may spark buying spree among food
producers
Nutraceuticals International, 1-12-2001, The EU directive on food supplements - an industry
perspective by Peter Berry Ottaway
Nutraceuticals International, 1-12-2004, European supplements legislation during 2004 - a review by Peter Berry Ottaway
Bech-Larsen T., and Scholderer, J., 2007, Functional foods in Europe: consumer research, market
experiences and regulatory aspects, Trends in Food Science & Technology, Vol. 18, Iss. 4, pp. 231
234.
European Health Claims Alliance, 2010, Economic Impact Assessment of the European Union (EU)s
Nutrition & Health Claims Regulation on the EU food supplement sector and market.
www.pgeconomics.co.uk/pdf/Impact-Assessment-health-claims.pdf (accessed 19-7-2011)
Nutraceuticals International, 20-10-2006, 2007 - a challenging year for Europe's supplements
industry by Peter Berry Ottaway
Nutraceuticals International, 1-10-2006 Adoption of EU Health Claims Regulation - immediate
consequences by Peter Berry Ottaway
Nutraceuticals International, 1-8-1996, German authorities query nutraceuticals as market booms
Nutraceuticals International, 1-12-1996, Scrooge comes to UK; bans VMS, other prods on NHS
Nutraceuticals International, 26-2-1997, Food health claims - positive developments in the UK
Nutraceuticals International, 1-12-1998, UK calls for "liberal" attitude on nutritional supplements in
EU
Nutraceuticals International, 1-11-1998, Industry group in UK's VMS PR program
Nutraceuticals International, 1-7-1998, European Union pressure grows for legislation on
supplements
The Guardian, 10-6-2010, Fish oil salesmen find EU in the way
Nutraceuticals International, 1-1-1997, French nutra sector hears from Lannoye on legal position
EC.europa.eu, 2011, http://ec.europa.eu/nuhclaims/
References description F1: entrepreneurial activities 1990 2011 (Europe)
Nutraceuticals International, 1-7-1996, Sandoz expands nutraceutical facility

95

Extel Examiner, 12-3-1999, Amsterdam shares higher in buoyant midday trade on Lafontaine
resignation
Nutraceuticals International, 1-5-2006, Immune booster
Nutraceuticals International, 1-6-2006, Natrol spreads its wings with UK subsidiary
Nutraceuticals International, 20-10-2006, 2007 - a challenging year for Europe's supplements
industry by Peter Berry Ottaway
Nutraceuticals International, 10-2006, Adoption of EU Health Claims Regulation - immediate
consequences by Peter Berry Ottaway
References description 3: knowledge diffusion 1990 2011 (Europe)
Nutraceuticals International, 1-5-1996, Nutrition and food supplements; what should we make of
new health claims?
Nutraceuticals International, 13-3-1997, Forthcoming meetings/events (published 1-1-1997)
Nutraceuticals International, 17-5-1999, Forthcomingmeetings/events
Nutraceuticals International, 12-9-1996, Forthcoming meetings/events.
Nutraceuticals International, 1-7-1998, Chr. Hansen Forms Human Health Group
Nutraceuticals International, 20-3-1998, IADSA prepares strategy for Codex guidelines
Nutraceuticals International, 1-2-1999, AAH/Roche collaboration
Nutraceuticals International, 1-4-1999, Thallia signs deal with Rowett Institute for nutraceutical
"aspirin"
AFX news, 7-1-1999, RPT: Numico acquires 2 German nutraceutical cos
Extel Examiner, 15-1-1999, Numico to acquire UK's Larkhall Natural Health
Sync.nl, 2007, http://sync.nl/jan-bennink-de-man-die-numico-redde-en-verkocht/2 (accessed 10-12012)
Extel Examiner, 12-3-1999, Amsterdam shares higher in buoyant midday trade on Lafontaine
resignation
Nutraceuticals International, 1-11-2003, Numico's interest in supplements comes to an end with sale
of GNC and Vitamex
Nutraceuticals international, 1-6-1996, Merck KGaA strengthens position in nutra/OTC field with
Seven Seas acquisition
Nutraceuticals International, 1-10-2000, Merck KGaA expects nutraceutical sales to double in two
years
Fero industries, 1-7-2011,
http://www.feroindustries.com/pdf/Fero%20Industries%20FROI%20Corporate%20Profile%20July
%202011.pdf
Nutraceuticals International, 19-11-2003, Forthcomingmeetings/events: The UK Health Food
Manufacturers' Association will hold a one-day conference on The Legislation Overload
Nutraceuticals International, 1-2-2004, EU food health claims Regulation: public hearing debates
Articles 4 and 11;
Nutraceuticals International, 26-5-2004, The International Alliance of Dietary Supplement
Associations is holding a conference on The Future of Food Supplements in Europe,
Forthcomingmeetings/events
Nutraceuticals International, 1-5-2004, IADSA meeting will review enlarged Europe impact of food
supplements
Nutraceuticals international, 21-10-2005, Industry/govt meeting reviews challenges for European
food supplements sector
Nutraceuticals International, 1-12-2006, EFSA exchanges views and experience on nutrition and
health claims
Nutraceuticals International, 1-7-2007, European Union health and nutrition claims - questions and
answers
Nutraceuticals International, 1-8-2007, EFSA publishes final guidance on health claims following
useful comment
96

Nutraceuticals International, 1-11-2008, Key EU food supps polices debated

Nutraceutical Business & Technology, 2009, Health claims rejected by EFSA: Naturalpha's opinion:
EFSA has issued a negative opinion for almost 80% of the health claims submitted by agro-food
companies
European Health Claims Alliance, 2010, Economic Impact Assessment of the European Union (EU)s
Nutrition & Health Claims Regulation on the EU food supplement sector and market.
www.pgeconomics.co.uk/pdf/Impact-Assessment-health-claims.pdf (accessed 19-7-2011)
References description F4: guidance of the search 1990 2011 (Europe)
Nutraceuticals International, 1-7-1993, Natural remedies market in Sweden - the rules and
regulations
Nutraceuticals International, 1-7-1996, Current legislation "not equipped to deal with nutraceuticals"
Nutraceuticals International, 1-6-1998, The definition of a food supplement - an urgent need in
Europe - by Peter Berry Ottaway
Nutraceuticals International (2), 1-6-1998, UK health claims consultation paper
Nutraceuticals International, 1-8-1999, European attitudes to nutraceuticals "about to change"
Nutraceuticals International, 1-2-1999, Growing demand for OTC vitamins and supplements
Europa.eu, 2012,
http://europa.eu/legislation_summaries/internal_market/single_market_for_goods/free_movem
ent_goods_general_framework/index_en.htm (accessed 14-3-2012)
Nutraceuticals International, 1-8-2002, European Union proposes legislation on all food claims by
Peter Berry Ottaway
Ec.europa.eu, 2012, http://ec.europa.eu/food/food/biotechnology/novelfood/index_en.htm
(accessed 14-3-2012)
The Guardian (London), 10-6-2010, National: Bad Science: Fish oil salesmen find EU in the way
European Health Claims Alliance, 2010, Economic Impact Assessment of the European Union (EU)s
Nutrition & Health Claims Regulation on the EU food supplement sector and market.
www.pgeconomics.co.uk/pdf/Impact-Assessment-health-claims.pdf (accessed 19-7-2011)
Nutraceuticals International, 1-12-2001, The EU directive on food supplements - an industry
perspective by Peter Berry Ottaway
Nutraceuticals International, 1-12-2004, European supplements legislation during 2004 - a review by Peter Berry Ottaway
The Independent (london) 15-3-2005 Health: Coming Soon: the fat free hot-dog
Nutraceuticals International, October 2006, Adoption of EU Health Claims Regulation - immediate
consequences by Peter Berry Ottaway
Nutraceuticals International, June 2008, EU playing role in international regulatory trends
The Herald (Glasgow), 23-5-1994, Old wives' cure may lead to safer pregnancies
Western Mail, 13-9-2005, How these friendly pills may cut two days of your cold
Nutraceuticals International, 1-5-2006, Chemical contamination of supplements - the IADSA initiate
by Peter Berry Ottaway
Chemist & Druggist, 22-4-2006, Marketwatch: Boots withdraws fish oil products
Western Mail, 12-6-2006, 'Thinking' dose for children sounds fishy
Daily Mail (London), 13-7-2010, Is there something fishy about your omega-3 pills?
Pulse, 24-5-2007, NICE urges mass use of omega-3
The Statesman, 23-3-2008, Not so Safe
Business Recorder, 4-5-2009, Fish oil no help to heart patients after all
Press Association Mediapoint, 12-9-2011, Fish oil hinders cancer treatment
References description F5: market formation 1990 2011 (Europe)
Nutraceuticals International, 1-8-2002, EC to censure Austrian food supplement law
97

Nutraceuticals International, 1-11-2002, EU's drug threat to supplements deflected

Nutraceuticals International, 1-7-1996, EU Council agreement on dietary foods and sweeteners
Nutraceuticals World, 1-5-2006, Metafolin approved in the EU
References description F6: resource mobilization 1990 2011 (Europe)
Nutraceuticals International, 1-5-1998, French food industry takes nutraceuticals on board
Extel Examiner, 12-3-1999, Amsterdam shares higher in buoyant midday trade on Lafontaine
resignation
Extel Examiner, 27-8-1998, FOCUS: Novartis restructuring may spark buying spree among food
producers
Nutraceuticals International, 1-11-2005a, Dutch grant for Thai supplements project
Nutraceuticals International, 1-11-2005b, Finland blends nutrition and business into five-year ERA
program
Nottingham Evening Post, 29-3-2007, Pay-back for venture fund
Nutraceuticals International, 1-3-2008, Exichol sets up in France
References description F7: creation of legitimacy / counteract resistance to change 1990 2011
(Europe)
Nutraceuticals international , 1-8-1999, German authorities query nutraceuticals as market booms
Nutraceuticals International, 1-12-1996, Scrooge comes to UK; bans VMS, other prods on NHS
Nutraceuticals international, 26-2-1997, Food health claims - positive developments in the UK
Nutraceuticals International, 1-9-1998, Over one-third of UK vitamin/supplement advertising found
to be "unacceptable
Nutraceuticals International, 1-7-1998, European Union pressure grows for legislation on
supplements
Nutraceuticals International, 1-12-1998, UK calls for "liberal" attitude on nutritional supplements in
EU
Nutraceuticals International, 1-11-1998, Industry group in UK's VMS PR program
Nutraceuticals International, 1-12-2002, Health claims on food labels confuse consumers, UK FSA
research finds
M2, 23-11-2005, Research and Markets: The Global Nutraceutical Market is Hampered by Consumers
Mistrust of Manufacturers Claims Almost 50% Find them Untrustworthy
Nutraceuticals International, 14-2-2005, UK challenge to food supps directive - the saga continues by Peter Berry Ottaway
Nutraceuticals International, 1-9-2008, UK consumers being misled about joint supplements,
Whatsinit.com study finds
The Irish Times, 28-7-2008, Warning: may contain guff

98

Appendix C: References United States nutraceuticals innovation system

analysis (1990 2011)
References narrative United states nutraceuticals innovation system 1990 2011
FDA.gov, 2010,
http://www.fda.gov/regulatoryinformation/legislation/federalfooddrugandcosmeticactfdcact/def
ault.htm (accessed 6-3-2012).
PR Newswire, 1-12-1994, Experts announce the birth of a new era in medicine and legitimate
nutraceutical health industry
USA Today, 14-5-1990, Fish oil may ease colon inflammation
The Associated Press, 16-7-1990, FDA Tells Manufacturers to Stop Making Health Claims
The Associated Press, 5-12-1991, Foodmaker Predicts More Specially Formulated Foods
The Atlanta Journal and Constitution, 2-1-1992, FOOD, PART 2: WHAT'S HOT IN '92; We'll favor
medicinal foods, simple cuisine, cooking at home
The New York Times 13-9-1992, The Guide
PR Newswire, 23-4-1998, Omega Protein Names Former SVO Executive VP - Oil Marketing; Opens
Chicago Office
USA Today, 14-1-1993, A push to label medicinal powers of some foods
FDA.gov, 2012, http://www.fda.gov/food/dietarysupplements/default.htm (accessed 6-3-2012)
Business Wire, 12-1-1998, ABS Group Inc. Subsidiary Launches HealthLink International Division to
Market 23 New Neutraceutical Products through Medical Offices
Business Wire, 1-12-1999, Nutraceutix, Inc. Licenses Olympian Labs, Inc. to Market Calcium DGlucarate
PR newswire, 28-5-1999, HealthSpan, Inc. Receives Funding Commitment for Debt and Equity
Business Wire, 4-5-2004, Research and Markets: Nutraceuticals: Growth Expected to Remain at 9%
until 2010
Capital Times (Madison, WI.), 26-4-1999, Nutraceutical popularity is on the increase here
Reuters Health Medical News 17-9-1999 FDA urged to increase oversight of nutraceuticals
Daily News (New York), 27-9-1999, Dangerous drug interactions be careful: some supplements dont
mix well with prescription medications.
The Associated Press, 26-1-1993, Regulating Foods That Might Be Good for What Ails You
Reuters Health Medical News, 15-5-2000, Endocrinologists to develop guidelines, physician
education on nutraceuticals
News and Observer (Raleigh, NC), 5-1-2000, Future foods
PR Newswire, 8-5-2000, Food Doctors Seek Cure for the Common Food; PROMAR Study Offers
Prognosis for US Functional Foods Market
Business Wire, 29-8-2000, Frost & Sullivan Identify Nutraceuticals as Growth Opportunity for U.S.
Protein Ingredients Market
Business Wire, 10-12-2001, Nutraceuticals Experts Provide ''How To'' Guide to Increased Profitability;
Consumer Trends Among Key Topics Discussed at Nutritionals Symposium; Nutritionals
Symposium and Exposition
St. Louis Post-Dispatch (Missouri), 28-2-2000, Companies have been slow to market foods with
natural disease preventing substances
The New York Times, 24-3-2009, Fish oil supplements can contain mercury.
St. Louis Post-Dispatch (Missouri), 23-4-2007, Omega-3s in pregnancy are tricky
Palm Beach Post (Florida), 15-6-2005, Weakened immune system? Avoid fish oil
PrimeZone Media Network, 29-4-2005, Martin Nutraceuticals Inc. Announces Retail Expansion
PR Newswire, 11-7-2005, ScienceBased Health Introduces Smoker-Appropriate Nutraceutical to
Preserve Eyesight and Overall Body Health
Business Wire, 15-6-2005 Media's Rising Influence Stresses Need for Better Media Management by
Nutraceutical Manufacturers
99

Business Wire, 23-11-2005, The Global Nutraceutical Market is Hampered by Consumers' Mistrust of
Manufacturers' Claims - Almost 50% Find Them Untrustworthy
States News Service, 2-3-2010, CRN says there are no safety issues with fish oil
PR Newswire, 14-2-2006, LifeGuard Health Names Shields CEO
Market Wire, 1-6-2006, Martin Nutraceuticals Inc. to Have Show Aired on the VoiceAmerica(TM)
Network
PR Newswire, 1-6-2006, Probiotics From Nutraceutix Shown in Clinical Research to Enhance Immune
Function
Business Wire, 1-8-2008, 5-LOXIN Proven to Reduce the Symptoms of Osteoarthritis in New Human
Study Published in Arthritis Research and Therapy
Upi, 16-3-2005, Feds raid Enzyte maker's offices
Upi, 2-3-2010, Fish oil PCB levels subject of lawsuit
Business Wire, 27-4-2010, Most Fish Oil Supplement Companies Refusing to Disclose PCB Levels, Plan
Public Relations Campaign Instead
Business Wire, 9-8-2011, Nutraceuticals Market to Exceed $207 billion in 2016:
companiesandmarkets.com
References description F1: entrepreneurial activities 1990 2011 (United States)
Salt Lake Tribune (Utah), 6-9-1995, Ogden Firm May Put Algae on Dinner Plate Algae May Become
Diet Supplement
PR newswire, 1-11-1995, Biomune Systems, inc. forms subsidiary to enter nutriceutical market.
FDA.gov, 2012,
http://www.fda.gov/Food/DietarySupplements/ConsumerInformation/ucm110417.htm (accessed
20-3-2012)
PR Newswire, 24-6-1998, Photosynthetic Harvest Inc. Establishes Nutraceutical And Functional Food
Business Unit.
Business Wire, 12-1-1998, ABS Group Inc. Subsidiary Launches HealthLink International Division to
Market 23 New Neutraceutical Products through Medical Offices
Business Wire, 23-2-1999, Xechem Announces the Launch of Its XetaPharm Interactive e-commercebased Web Site
PR Newswire, 16-3-1999,Medisys Technologies, Inc. to Enter E-Commerce Market With the Opening
of its Yahoo Shopping Site
PR Newswire, 1-2-2000, First Great Tasting Omega-3 Dietary Supplement Introduced by ERBL, Inc.
Market Wire,28-3-2011, MB Innovations LLC Releases Revolutionary New Weight Loss Product:
Slimple(TM) Made With MaCoca -- a Coca Leaf Derivative
U.S. Newswire, 17-10-2008, New Company to Develop Nutritional Interventions Against Chronic
Inflammatory and Infectious Diseases
PR Newswire, 14-4-2003, ScienceBased Health Introduces All-in-One Nutraceutical to Protect Both
Eyesight and Overall Body Health
The Associated Press State & Local Wire, 16-9-2008, Ohio company seeks bankruptcy protection
Associated Press Online, 27-8-2008, Ohio company owner gets 25 years in fraud case
Business Wire, 9-8-2011, Nutraceuticals Market to Exceed $207 billion in 2016:
companiesandmarkets.com
References description F2: knowledge development 1990 2011 (United States)
Blackburn, G.L., Mascioli, E.A., 1993, Designer lipids as a nutraceutical, Critical care medicine, vol. 21
iss. 11, pp 1632 -1633.
References description F3: knowledge diffusion 1990 2011 (United States)
Salt Lake Tribune (Utah), 6-9-1995, Ogden Firm May Put Algae on Dinner Plate Algae May Become
Diet Supplement
USA Today , 14-1-1993, A push to label medicinal powers of some foods
100

PR Newswire, 1-12-1994, Experts announce the birth of a new era in medicine and legitimate
nutraceutical health industry
PR newswire, 4-5-1995, How to develop, make claims on, and market nutraceuticals
PR Newswire, 28-6-2000, American Association of Pharmaceutical Scientists Dietary Supplements
Forum Examines Science Behind Nutraceuticals
Business Wire, 17-7-2000, Penton Media Acquires Nutracon, Premier Conference Serving
Nutraceutical Market; Event Adds Leading Position in Growing Market Segment to Penton's New
Hope Natural Media Division
PR Newswire, 7-10-1999, Kaire Nutraceuticals Signed on 3200 New Distributors in Second Quarter;
Network Marketer Institutes Innovative Compensation Plan
Business Wire, 1-12-1999, Nutraceutix, Inc. Licenses Olympian Labs, Inc. to Market Calcium DGlucarate
Business Wire, 25-7-2007, ZYTO Corp. Strategic Alliance with BioNativus Improves Sales for Both
Companies
Business Wire, 15-6-2004, Beneficial Holdings Acquires Beneficial Health and Beneficial
Nutraceuticals
References description F4: guidance of the search 1990 2011 (United States)
The San Francisco Chronicle, 15-1-1992, Meals That Heal Mother was right when she said 'eat your
carrots'.
Foundation for innovation in medicine, 2012, http://www.fimdefelice.org/page.asp?id=2463.
PR Newswire, 1-12-1994, Experts announce the birth of a new era in medicine and legitimate
nutraceutical health industry
FDA.gov, 2012,
http://www.fda.gov/Food/DietarySupplements/ConsumerInformation/ucm110417.htm#regulate
(accessed 29-2-2012)
Copley News Service, 16-11-1997, FUNCTIONAL FOODS Can 'nutraceuticals' boost health, help
avert disease?
Charleston Gazette (West Virginia), 9-10-1996, MAN THAT'S COOKING WHAT'S THE LATEST TREND IN
FOOD ? NUTRACEUTICALS
PR newswire, 24-12-1996, New Study Shows That Selenium Yeast Supplement Significantly Reduces
Human Cancer Incidence
The Associated Press, 12-6-1996, Fish Oil Capsules Found Effective Against Crohn's Disease
Reuters Health Medical News, 17-9-1999, FDA urged to increase oversight of nutraceuticals
PR newswire, 4-5-1995, How to develop, make claims on, and market nutraceuticals
Reuters Health Medical News, 12-11-1998, Lack of regulation of "Nutraceuticals" called into question
The Associated Press, 26-1-1993, Regulating Foods That Might Be Good for What Ails You
Reuters Health Medical News 17-9-1999 FDA urged to increase oversight of nutraceuticals
Daily News (New York), 27-9-1999, Dangerous drug interactions be careful: some supplements dont
mix well with prescription medications.
Reuters Health Medical News, 15-5-2000, Endocrinologists to develop guidelines, physician
education on nutraceuticals
The foundation for innovation in medicine, 10-1-2007, DSHEA Versus NREA (The Nutraceutical
Research and Education Act) and the Three Nutraceutical Objectives
The New York Times, 24-3-2009, Fish oil supplements can contain mercury.
St. Louis Post-Dispatch (Missouri), 23-4-2007, Omega-3s in pregnancy are tricky
Palm Beach Post (Florida), 15-6-2005, Weakened immune system? Avoid fish oil
Salt Lake Tribune (Utah), 8-3-2003, FDA Seeks Rules for Dietary Pills, Herbs ; Supplement makers say
they welcome labels; FDA Targets Dietary Supplements
References description F5: market formation 1990 2011 (United States)
Business Wire, 21-10-1999, FDA's Soy Health Claim Gives Galaxy Foods Veggie Products Big Boost
101

Capital Times (Madison, WI.), 29-1-2001, Health studies find more dairy benefits
FDA.gov, 2009, Guidance for Industry: A Food Labeling Guide, Appendix C: Health Claims,
http://www.fda.gov/Food/GuidanceComplianceRegulatoryInformation/GuidanceDocuments/Foo
dLabelingNutrition/FoodLabelingGuide/ucm064919.htm (accessed 26-3-2012)
Business Wire, 23-6-2008, USANA's BiOmega(TM) Fish Oil Supplement Approved by
ConsumerLab.com
PR Newswire, 4-8-2008, Eniva USA Efacor(R) Fish Oil (Non-Fishy Lemon Taste) Receives
ConsumerLab.com Seal of Approval
The Associated Press, 16-7-1990, FDA Tells Manufacturers to Stop Making Health Claims
Reuters Health Medical News, 2-11-2000, FDA says evidence of omega-3 health benefits unclear
Salt Lake Tribune (Utah), 11-1-2004, Utah companies deluged with demand for ephedra
The Associated Press State & Local Wire, 14-5-2007, Supreme Court turns down appeal of ban on
weight-loss supplements
References description F6: resource mobilization 1990 2011 (United States)
PR Newswire, 23-10-1997, Fuisz Technologies Ltd. Announced Private Placement of $75 Million of
Convertible Subordinated Debentures
PR newswire, 28-5-1999, HealthSpan, Inc. Receives Funding Commitment for Debt and Equity
Internet Wire, 1-7-2002, Kibow Biotech, Inc. Awarded $993,826 For Its Second Fast-Track Phase I And
II Small Business Innovative Research (SBIR) Grant
Internet Wire, 1-7-2002, Kibow Biotech, Inc. Awarded $993,826 For Its Second Fast-Track Phase I And
II Small Business Innovative Research (SBIR) Grant
Lowell Sun (Massachusetts), 20-10-2008, UML's SmartPill may delay onset of Alzheimer's
References description F7: creation of legitimacy / counteract resistance to change 1990 2011
(United States)
PR newswire, 19-7-1999, Nutrapharm, Inc. Teams up with Top Healthcare Agency - Sciens Worldwide
Public Relations
States News Service, 2-3-2010, CRN Says there are no safety issues with fish oil
Business Wire, 11-10-2007, Martin Nutraceuticals Begins Airing Infomercial on the WRNN Television
Network
Business Wire, 27-8-2007, Martin Nutraceuticals Expands Media Awareness Campaign in Preparation
of Infomercial into the Multi-Billion Dollar Health and Wellness Marketplace
Business Wire, 22-4-2009, Renaissance Health Sciences Says 99% of All Fish Oil Supplements on the
Market Are Completely Worthless
The New York Post, 8-8-1999, Dont trust what you eat; take health claims with a grain of salt

102

Appendix D: References comparison European nutraceuticals IS United

States nutraceuticals IS (1990 2011)
Nutraceuticals International, 1-7-1993, Natural remedies market in Sweden - the rules and
regulations
PR Newswire, 1-12-1994, Experts announce the birth of a new era in medicine and legitimate
nutraceutical health industry
FDA.gov, 2010,
http://www.fda.gov/regulatoryinformation/legislation/federalfooddrugandcosmeticactfdcact/def
ault.htm
M2 EquityBites, 12-11-1999, CNS Pharmaceuticals AG receives trading sponsorship for Xetra
PR Newswire, 1-3-1999, Frost & Sullivan Healthy Lifestyle Trend Spurs Growth of Nutraceutical
Markets Despite Increasing Industry Regulations

103

Appendix E: Historical event databases European nutraceuticals innovation

system and US nutraceuticals innovation system
In the enclosed CD-ROM the historical event databases of the European nutraceuticals innovation
system and US nutraceuticals innovation system can be found.

104