Health and Wellness 2017: The Gut Health Mega-Trend

Health and Wellness:
The Gut Health
Mega-Trend
SCHIEBER
RESEARCH

The Gut Health Mega-Trend | July 2017 2
Introduction
From "low-carb" to "smart carb", through "high- protein" and "plant-based protein",
to "allergen-free" lifestyles: US consumers have been utilizing different strategies,
in an attempt to manage their health through a more calculated consumption of
food and beverage.
Today,theemergenceofscientificevidenceontheroleofthehumanmicrobiome,
and the importance of a healthy gut, meets a consumer who is thirsty for weight
management and a bloat-free life. As a result, gut health is fast becoming a new
lifestyle approach that will affect food and beverages, vitamins and supplements,
and beauty.

Growth Engines:
From Obesity and Allergies to Digestion Problems
According to the most recent data by the World Health Organization, in 2014
more than 1.9 billion adults, 18 years and older, were overweight. Overall,
39% of adults aged 18 years and over were overweight and 13% of the world
population were obese (11% of men and 15% of women). 41 million children
under the age of 5 were overweight or obese.
If rates of obesity continue to rise, it is estimated that by 2025 18% of men
and 21% of women worldwide will be obese (Source: WHO 2016, The Lancet
Journal 2016)
In 2016 in the US, 174.11 million people say that they “watch their diet”, compared
to 147.82 million who said they don’t (Statista, based on the U.S. Census data and
Simmons National Consumer Survey (NHCS)).
When asked why they are watching their diets (multiple answers allowed), 81%
of consumers who are watching their diets said they were trying to lose weight
(55% of consumers) or maintain weight (a further 26%).

Source: Experian (2016 Simmons Profile Report), 323,996 respondents
* Number of consumers in millions
U.S. population*: What are the reasons for watching your diet?
Maintain
weight
44.67
Blood sugar
level
48.27
Cholesterol
level
56.15
Lose
weight
95.77
Food
allergy
7.12
Heart disease
16.35
Calcium
intake
10.59
Lactose
intolerance
8.58
Fat
intake
35.87
Diabetes
29.81
Salt
intake
25.37
Hypertension
33.76
Other
13.77
Gluten
intolerance
5.37
Gain
weight
4.16

“Leaky Gut” and Food Sensitivities
According to a survey performed by Digestive Health in July 2016, 83% of
consumers agreed they had experienced a digestive health ailment. Pew
Research Center (Dec., 2016) found that 32% of US adults say they have mild,
moderate or severe allergies (15%) or sensitivities (17%) to one or more foods.
In addition to gluten free, which boomed in the past 5 years, and lactose/dairy
free, glucose free is starting to gain interest due to the rising interest in FODMAP
(an acronym that stands for Fermentable, Oligosaccharides, Disaccharides,
Monosaccharides and Polyols). Some people experience gastro-intestinal
symptoms (similar to IBS) after consuming FODMAPs.
Increasingly, lactose is perceived as hampering digestion and causing flatulence.
Lactose-free milk grew 10% in 2015 (Euromonitor, 2016), with the U.S. being
the biggest market (29% of global revenues). Plant-based milk is experiencing
an even bigger growth (see our Plant Based Milk report for elaboration of May,
2017).
This Google Trends analysis (June 2017) demonstrates that “gut health” and
“bloating” are amongst the most growing search terms when it comes to
managing health through food (US, last 5 years). Search terms that indicate
consumers’ rising awareness to gut health, such as “leaky gut”, are growing too.
best foods for gut health + 350%
best foods for inflammation + 250%
best foods for bloating + 200%

Indeed, consumers, suffering from gastrointestinal symptoms, are turning to
allergen-free diets in an attempt to decrease digestion discomfort, even if they
were not diagnosed by a professional as intolerant or allergic.
This demonstrates that (1) nutrition is widely accepted as a powerful tool for
managing lifestyle symptoms and that (2) gastric discomfort is a rather common
problem.
Atthesametime,scientistsareuncoveringthesignificantrolethatthemicrobiome
plays in human health, finding that our bacteria (or lack thereof) can be linked to
or associated with: obesity, malnutrition, heart disease, diabetes, celiac disease,
eczema, asthma, multiple sclerosis, colitis, some cancers, and even autism
(source: The American Microbiome Institute, Inc.). The human microbiome
refers to the assemblage of microbes that live in the human body. While these
microbes inhabit all parts of our body that are exposed to the environment, most
reside in the gut where they have a constant supply of nutrients.
The intersection between weight loss and digestion, combined with the latest
discoveries in microbiome research and personal nutrition, is therefore the next
big trend to happen in F&B health and wellness.
“Leaky Gut” and Food Sensitivities

Gut Microbiome:
the Intersection between Science and Consumer Trends
According to a study by Israel’s Weizmann Institute of Science, published in the
Cell journal in December 2016, when gut microbiota are healthy, they maintain
regular daily cycles of activities such as congregating in different parts of the
intestine and producing molecules that help the body function properly. A
disruption of the gut’s rhythms upsets many of the body’s other circadian clocks,
especially in the liver, one of the main metabolic organs, and can lead to a
number of diseases.
Gut health in general, and the gut-mind connection in particular, are gaining
huge interest with books, magazines and TV shows discussing the subject. As
scientists discover more about the role of gut microbiome in weight management
and general health, start-ups are beginning to utilize those discoveries and offer
tools for self monitoring and diet decision making. These start-ups are attracting
a lot of attention from investors, as demonstrated in the following graph from
the Wall-Street Journal.
VC Investment in Microbiome Companies
* Year to date (Sep. 2016)
Sources: WSJ.com, based on Dow Jones Venture Source, Securities and Exchange Commission; the companies
Venturecapitalinvestment,inmillions
2011 2012 2013 2014 2015 2016*
$ 700
600
500
400
300
200
100
0
1,200%
1,000
800
600
400
200
0
-200
Total amount raised by year (left scale) Change (right scale)

The Result: a Gut-Health Mega Trend
We believe that gut health will become a number 1 priority for health-conscious
consumers, and diet plans that promise to re-build healthy microbiota, as well as
products that help replenish friendly bacteria, will flourish. As presented by our
industry-analysis Diamond Model:
Bestin
class:
com
panies
are
starting
to
reposition
products
around
the
guthealth
claim
M
acro
trends:
obesity,using
food
as
m
edicine
Innovatorsand
D
isruptors:
m
icrobiom
e
startups
offernew
applications
“allergen
free”/“free
from
”,
w
eightm
anagem
ent,holistic
approach
on
the
rise,interestin
personalized
nutrition
C
onsum
ertrends:
GUT
HEALTH

Popular books on gut health differ greatly in terms of eating recommendations.
Some encourage a vegan-oriented diet, while others look at Paleo-style diets,
as a gut health strategy. It seems, however, that gluten and fluid milk might
continue to suffer from a negative image.
New opportunities arise in dairy, legumes, raw, and fermented foods:
Fermented - kefir, kombucha, pickles, and kimchi - as well as cuisines that
encourage the consumption of these components (e.g., Korean restaurants) –
will rise.
Probiotics – after years of decline in the perception of probiotics, supplements
and products rich in pro- and pre-biotic fiber will be on trend again. In addition
to yogurt and dairy-free fermented products, ingredients such as artichokes and
beans will benefit from the trend.
Fiber will be the next nutrient in focus, after protein. Since gluten-free is
recommended by many gut-health popular books, we believe that legumes can
benefit from this trend, as can chia and flax seeds.

Clorox launched a Burt’s Bees protein and gut
health shake mix, to benefit from both trends.
Pepsico responded to the gut health trend
through Tropicana Essentials’ Probiotics line,
as well as the Nov. 2016 acquisition of KeVita.
Beverage Marketing Corporation reported that
the kombucha market increased nearly 41% to $534 million in
2016, led by GT’s Kombucha (Millennum Products Inc.). In the
52 weeks ending August, 2016, the company’s Organic Raw
Kombucha experienced a 37.5% growth in dollar sales to $ 20.2
million, according to IRI.
Activated by Living intentions:
The company offers “activated foods” describing it as “a merge between
sprouted, plant based super-foods, with live probiotics and healing herbs.”
Products range: popcorn, cereals, nut blends and seeds

GanedenBC30, developed by Ganeden, is a spore-forming probiotic – which
means that, similar to a seed, its genetic material is protected by a hard shell.
The company claims that the spore safeguards the probiotic from the heat,
cold and pressure of manufacturing, allows for stability during the product shelf
life and protects the cells from the acid and bile they are exposed to during
transit through the digestive system. Once it is safely inside the small intestine,
the probiotic germinates and colonizes to provide benefits.
MELT Organic has teamed with Ganeden to
launch Probiotic MELT Buttery Spread, a butter
substitute with a digestive health claim.
NuGo Free Dark Chocolate Crunch bar is
enhanced with GanedenBC 30 probiotic, to
support a healthy digestive and immune system.
Lifeway, the leading US kefir brand, recorded
4.5% growth in 2016 to $ 123.9 million. The
company has launched innovations that are
based on growth trends such as protein and
kids – but we believe the company has to
defend its positioning in the probiotic field
amidst new competitors.
Purely Elizabeth, a growing ancient grain
granola brand, has launched a probiotic version
combining GanedenBC30.

From Microbiome to Personalized Nutrition
The concept of personalized nutrition creating new options for consumers
looking for a customized approach to managing their health. The start ups in this
field usually utilize digital technology, most prominently through mobile apps.
Habit – a new startup company “positioned at the intersection of health,
technology and food”, aims to lead the personalized nutrition revolution. Habit is
currently being tested in the Greater San Francisco area and was recently funded
by Campbell Soup Company.

In December 2016, Mayo’s Center for Individualized Medicine revealed it is
participating in a Series A financing round for DayTwo Ltd., of Tel Aviv, Israel.
The amount of the investment wasn’t specified. The goal of the collaboration
and venture investment is to move the DayTwo Personalized Nutrition Solution
through clinical trials and into the U.S. market.
The startup’s tech platform taps medical and machine-learning research
performed at the Weizmann Institute of Science in Israel, developed nan
algorithm for predicting individualized blood glucose response to different foods
based on gut microbiome information and other personal parameters.
Ubiota:“Manypeopleeatprobiotics,includingyogurt,tokeeptheirgutmicrobiota
healthy and in balance. Now, uBiota's Personal Metagenomics Kit (PMK) can
help you track if your diet and probiotic regime are having the effect you want.
You can order a PMK now and start your exploration.”

The algorithm was further refined by DayTwo and the Weizmann Institute, and
the company asserts it can now predict blood sugar response to thousands of
different foods and meals. Once it gains market clearance, it will be marketed
as a “significant health benefit” for those seeking to balance their levels of blood
sugar, which is linked to energy dips, excessive hunger, weight gain, and increased
risk for diseases like obesity, diabetes and hypertension.
“DayTwo analyzes your microbiome to predict blood sugar responses to thousands of different foods.”

The gut health mega-trend will create new opportunities for food and beverage
companies. The trend pertains to restoring the microbiome, reducing ongoing
damage, and building a better microbiome.
To learn more about how a specific industry stands to benefit – or lose – from
this trend, please contact us.
In Conclusion
Thryve will send “High-quality and affordable probiotics & non invasive
microbiome testing kits delivered monthly to your door.”

How can we help?
Schieber Research is a market research and competitive intelligence firm that helps companies
recognize new opportunities, innovate, and grow.
Founded in 2009, and with offices in New York and Tel Aviv, Schieber Research has served
hundreds of companies worldwide, from startups to private equity firms to major consumer
goods manufacturers. We provide tailor-made research, ongoing competitive intelligence and
reports on industry and consumer trends.
We developed a special methodology to monitor, analyze and facilitate market trends, and
our worldwide network of field analysts monitors developments in retail and consumer goods
on site.
Wehaveworkedwithclientsfromdiverseindustries,including:foodandbeverages,automotive,
finance, pharma, retail, beauty and personal care, hospitality, home appliances and digital.
Founder and CEO Hamutal Schieber is an expert on consumer goods and innovation, and
frequently writes for major business publications and lectures at business schools. She is a
graduate of the Hebrew University Faculty of Law and has over 16 years of experience in
market research.
CEO Hamutal Schieber founded the company in 2009.
Our offices are in New York and Tel Aviv.
Visit us at www.researchci.com

Health and Wellness 2017: The Gut Health Mega-Trend

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