Ensure is a nutritional drink made by Abbott Laboratories that is designed to provide complete, balanced nutrition for either general health or for specific conditions like recovering from an illness. It comes in both liquid and powder forms. Ensure is marketed in many countries around the world, but there are some challenges to selling it in certain markets like Vietnam and Mexico.
Here are some quick answers to key questions on why Ensure may face challenges in markets like Vietnam and Mexico:
- Import restrictions – Some countries may have restrictions on importing foreign nutritional supplements and drinks like Ensure.
- Regulatory approval – Ensure may not have undergone the proper regulatory approval process required to sell nutritional supplements and foods in that market.
- Competition – Local brands may already dominate the nutritional drink market in that country.
- Affordability – Ensure is a premium-priced product, which may make it unaffordable to much of the population in developing markets.
- Consumer preferences – Consumers may prefer traditional whole foods and beverages over fortified nutritional drinks.
- Limited infrastructure – Lack of infrastructure may make distributing and storing a refrigerated product like Ensure difficult.
One key factor that can affect Ensure’s availability is whether a country has import restrictions on nutritional supplements and drinks. Both Vietnam and Mexico have complex regulations and standards for imported foods and supplements:
- Vietnam requires imported nutritional supplements to be certified and registered through a lengthy regulatory process. The supplements must demonstrate quality, safety and nutritional value.
- Mexico also requires all supplements to go through a registration process with COFEPRIS, the regulatory agency for foods and health products. The requirements focus on safety, quality and proven health benefits.
These types of import rules are intended to protect consumers, but can also create barriers for foreign nutritional products like Ensure if they are unable to meet the requirements or do not go through the proper approval process. The restrictions can effectively block Ensure from those markets.
Vietnam’s Supplement Import Regulations
Here are some more details on Vietnam’s import regulations for nutritional supplements and drinks:
- Must obtain import license from Ministry of Health
- Products must go through testing by National Institute for Control of Vaccines and Biologicals
- Manufacturing facilities must meet GMP standards and be inspected
- Lengthy registration process can take 6-12 months for approval
These types of regulations make it difficult for Ensure to enter the Vietnamese market unless Abbott goes through the full registration process. The costs and time involved can be prohibitive.
Mexico’s COFEPRIS Supplement Regulations
Mexico also has stringent regulations for supplements enforced by COFEPRIS:
- Plant and facilities must be registered and approved
- Require information on ingredients, GMP compliance, manufacturing process, packaging, etc.
- Evidence of safety and efficacy through clinical studies required
- Ongoing audits and reporting required
Navigating COFEPRIS requirements can be difficult for foreign supplement brands. Approval can take 2 years. The costs and requirements create big barriers for products like Ensure.
Regulatory Approval Process
In addition to import regulations, Ensure would also need to go through the full regulatory approval process for nutritional supplements and foods for each country it wants to be sold in. This includes:
- Safety studies and clinical trials
- Health claims verification
- Ingredient approvals
- Label registration
- GMP and facility certification
This extensive approval process takes significant time and resources. It can be a major hurdle for gaining market access, especially for nutritional drinks like Ensure targeting health benefits.
Safety and Health Claim Verification
To sell Ensure, Abbott would need to verify the safety and back up the product’s health claims with clinical studies specific to each market. This may require conducting local clinical trials, which takes additional time and investment.
Some ingredients used in Ensure may not be approved for use in supplements and foods in some markets. For example, Vietnam has prohibited the use of certain amino acids like L-tryptophan in supplements. Ensure would need to reformulate products for each country.
Facility and Manufacturing Approvals
Abbott would need to get its manufacturing facilities certified and audited to meet GMP and other quality standards in each country. For example, COFEPRIS in Mexico requires on-site inspections of plants.
Competition from Local Brands
A key challenge Ensure faces in many markets is strong competition from established local nutritional drink brands that already dominate the landscape:
- Vietnam – Brands like Vinamit, Nutriplus and Nattozime have a significant portion of the supplement drink market share.
- Mexico – Herbalife, Amway and GNC nutritional shakes have widespread availability and popularity.
Ensure is not just competing for market share but would need to displace popular products that consumers are already familiar with. This can take extensive marketing and establishing Ensure’s value over existing options.
Vietnam – Competitor Market Share Data
This table shows examples of some major competitor brands Ensure would need to overcome in Vietnam. Local options make up over 50% of market share.
Mexico – Popular Competitor Brands
- Amway Nutrilite
- Herdez Vive100
These major brands have a strong hold on the Mexican nutritional supplement drink market. Ensure would need to differentiate itself and invest heavily in marketing to gain share.
Another factor that can impact Ensure’s success in developing markets like Vietnam and Mexico is affordability. With a premium brand and pricing, Ensure targets middle and upper-middle class consumers in many countries. However, a large percentage of the population in markets like Vietnam and Mexico lives in poverty or belongs to lower income classes. With an average monthly income of around $150 in Vietnam, most people cannot afford premium-priced nutritional supplements on a regular basis. Ensure would need to consider more affordable product options and pricing for these markets.
Vietnam Average Monthly Income
|Average Monthly Income
This income data shows why Ensure may be unaffordable for many Vietnamese consumers, limiting its market potential.
Mexico Poverty Levels
- 43.6% of population under the national poverty line
- 7.4% live in extreme poverty
With high poverty levels like this, the majority of Mexicans also cannot afford higher-end imported nutritional supplements regularly.
Consumer Preferences for Traditional Foods
In addition to affordability issues, consumer preferences and habits related to food and nutrition sources present another challenge for Ensure in some developing markets. Consumers may have a bias toward fresh, whole, traditional foods and beverages over fortified, supplemental options like Ensure:
- Vietnam – Diets center around white rice, vegetables, broths, herbs, fish sauce and fresh fruits like mangoes and dragonfruit.
- Mexico – Beans, corn, chilies, tortillas, tomatoes, avocados and squash are nutrition staples.
These populations’ preferences for traditional, affordable nutrition sources can make it difficult for a product like Ensure to gain traction. Consumers may need education on benefits.
Vietnamese Reliance on Traditional Nutrition Sources
Here are some key facts on typical Vietnamese diet and nutrition:
- Get majority of calories from white rice
- Fish sauce, soy sauce and broths are common
- Vegetables like bok choy, bitter melon and Napa cabbage
- Fruit like dragonfruit, mangoes, lychees and rambutans
With such strong cultural reliance on these traditional food sources, Vietnamese consumers may not see the need for a supplement like Ensure.
Mexican Traditional Food Preferences
Mexican diets also center heavily around a few staple foods:
- Corn – in tortillas, tamales, etc.
- Beans – pinto, black, kidney
- Chilies and tomatoes
These whole food sources provide baseline nutrition. Ensure would need to complement, not replace, these preferences.
Infrastructure and Distribution Hurdles
Limited infrastructure for storing and transporting imported goods can also hamper distribution and sales of Ensure. Key issues include:
- Lack of cold chain infrastructure – Ensure needs refrigerated storage and transport.
- Underdeveloped transportation systems – makes physical distribution challenging.
- High costs – import duties, taxes and high margins required by distributors.
- Remote rural areas – hard to reach with distribution networks.
These infrastructure issues make it difficult and costly to get Ensure to consumers, reducing profitability and feasibility especially in developing areas. Targeting major cities may be most viable route.
Vietnam’s Infrastructure Challenges
In Vietnam specifically, poor infrastructure poses distribution hurdles:
- Only 13% of roads are paved nationally
- Limited cold storage and refrigerated trucks
- High import taxes up to 30%
These factors drive up costs and make distribution to broader markets difficult.
Mexico’s Infrastructure Issues
In Mexico, infrastructure issues include:
- Fuel costs are high which increases transport expenses
- Many areas lack reliable electricity and refrigeration
- Gravel and dirt roads in rural areas
These types of issues can hamper Ensure from accessing large portions of the Mexican population.
Options for Addressing Market Entry Barriers
Despite the barriers to entering developing markets like Vietnam and Mexico, there are strategies Ensure could consider to improve market potential including:
- Introducing smaller single-serve packs at lower price points to improve affordability.
- Partnering with local manufacturers to make products domestically and avoid import issues.
- Adjusting formulas to use local ingredient preferences while maintaining nutritional benefits.
- Marketing campaigns promoting nutritional benefits over supplements for medical conditions to align with local regulations.
- Focusing distribution on major cities first while building out rural infrastructure over time.
With the right strategies tailored to each market, Ensure may be able to overcome some of the key barriers to adoption. But it requires commitment, investment and patience to build up new consumer bases from scratch.
Potential Vietnam Market Entry Strategies
Some specific ideas for how Ensure could address Vietnam’s market challenges include:
- Partner with major domestic brands like Vinamit or Nutriplus
- Leverage affiliates and distributors with existing infrastructure
- Use locally popular fruits like dragonfruit and lychee for flavors
Gradual market entry built on local partnerships could help Ensure gain an initial foothold in Vietnam.
Potential Mexico Market Entry Strategies
In Mexico, Ensure may consider approaches like:
- Offering smaller single-serve packets at lower price points through OXXO convenience stores.
- Formulating products using local crops like corn, avocados, chilies.
- Partnering with large retailers like Soriana for distribution to urban areas.
Lower prices and local formulation could make Ensure more appealing and accessible to Mexican consumers.
In summary, regulatory barriers, strong local competition, pricing challenges, consumer preferences, and infrastructure limitations make introducing Ensure into developing markets like Vietnam and Mexico difficult. Ensure was developed for and targeted to Western consumers in mature healthcare markets. Adapting it to developing world conditions would require reformulating products for local tastes, adjusting pricing and pack sizes for affordability, navigating complex regulatory hurdles, building distribution systems from scratch, and significant marketing investment to raise awareness and shift consumer behaviors away from traditional nutrition sources. While not impossible, Ensure would have major barriers to overcome that Abbott may determine make other emerging markets a higher priority for international expansion of its nutritional supplement lines.