All you need to know. What – and who – is happening in Canada and around the world.

If you are in the midst of marketing a new or novel ingredient, it is likely that you have been asked, “Is it an NDI?" The uncertainty of the Food and Drug Administration's stance on the issue of New Dietary Ingredients (NDIs) has prompted many nutritional manufacturers to take a second look when considering new ingredients. It's also brought about additional requirements for raw material suppliers in providing greater safety, legal and clinical support when introducing a new ingredient.

An evolving industry – We're growing up

As an industry we're transitioning from the carefree stage of the adolescent to one of adult responsibility. The rules are being defined and companies have to abide or suffer the consequences. This means making adult decisions that involve phrases like "risk management" or "reducing liabilities."  It means adhering to GMPs and providing a deeper level of scientific support for ingredients and for finished products.           

A Brief Perspective
                                    
After the passage of DSHEA in the 1990s, the industry witnessed an immense proliferation of ingredients within an "herb of the year" mentality. These ingredients were introduced based on a broad interpretation of DSHEA, along with unclear requirements for substantiating safety and effectiveness. Throughout the 2000s, the ingredient philosophy converted to a price savings one and supplement manufacturers seemed most interested in saving money, oftentimes with little regard for product quality. Now with GMP implementation and enforcement, as well as the "on-hiatus" draft NDI guidance being issued in 2011, we're experiencing an industry balancing where quality and scientific validation are emerging due to increased regulatory scrutiny and enforcement. It's been a necessary adjustment but also generates hesitation when developing new ingredients or deciding to include one in a finished product formula.  (Remember, "risk management.") To further add to this dilemma is a dynamic and growing nutrition industry outperforming many other industries in spite of an overall weak U.S. economic climate. Within this context, completely new ingredients are becoming less common, and both ingredient suppliers and finished product companies are looking for new avenues of differentiation with existing ingredients. Although completely new ingredient types will be available, the number of completely new ingredients won't equal the numbers that were introduced early in the industry's history.

Alternatively, many of the new opportunities will create better, more effective existing ingredients through more advanced processes, delivery systems or new scientific support. The question then becomes, "When organizing my company, what initiatives should serve as a strategic focal point for growth?"

The Long View for R&D

With a greater emphasis on safety, GMPs and clinical support, the nature of R&D has changed for many ingredient suppliers. Where once a company could have a few people responsible for developing studies or provide technical support for customers, now companies have entire research departments focused on ingredient development, application research and support documentation. Also, the interaction among marketing, sales and R&D has become greater. No longer can R&D conduct a study for the sake of research without consideration for the marketing and sales implications. These studies have to be well thought out to offer optimal outcomes with claims that can be supported and validated.
                                               

The Need for Long-term R&D Planning
With these increased regulatory and market demands, R&D has become a primary function for ingredient suppliers. R&D initiatives require significantly more foresight now then was applied 10 years ago. Today, ingredient lifecycles are longer and plans need to account for this shift. Ingredients such as green tea and turmeric have been around a long time and have renewed interest based on increased media attention, new published studies or a new, unique ingredient form.

One ingredient company that has invested significantly in R&D over the long term is the botanical supplier Indena. Its continued investment in clinical research and ingredient development has maintained relevance for multiple ingredient categories. One such
category example is for turmeric/curcumin with its Meriva Bioavailable Curcumin.  Turmeric/curcumin ingredients and supplements have been on the market for decades.  Even though curcumin had been studied in almost 3,000 pre-clinical trials, the results showed inconsistent clinical effectiveness. Indena scientists attributed this to poor curcumin absorption and developed Meriva as a curcumin/soy lecithin combination significantly improving oral absorption and bioavailability. Indena has confirmed the effectiveness of Meriva with three published clinical studies. These results have contributed to category growth for turmeric products overall as well as for supplements containing Meriva.                       

Finished Supplement Companies Need a Plan, Too

Although we've primarily discussed the growing importance of R&D for ingredient suppliers, it's also becoming vital for finished supplement manufacturers. Within the "on hiatus" draft NDI guidance, the proposed regulations increased requirements for finished product companies to conduct research supporting its products. Currently, numerous finished supplement products rely only on research provided by ingredient suppliers. This research provides support for a specific ingredient but does not take into account the results when an ingredient is combined with multiple other ingredients. There is too little supporting research being done on finished products. Through the NDI draft guidance, we've already been provided with an indication of this forthcoming shift so companies adopting a research strategy today will be ahead of those that don't.
                        
In order to have continued and lasting success, a long-term R&D plan should be in place. The plan needs to account for new product discovery as well as fully understanding how your products work with supporting clinical information. This initiative needs to take a long view understanding that ingredient and product life cycles for the industry are longer than previous and can be more sustained with proper planning.

The Rise of Technology Platforms

As we witness the slowdown of the number of "new" ingredients introduced, the number of technology platforms will increase. A technology platform is a unique (often proprietary) development that can be applied across a number of ingredients, improving an ingredient's effectiveness or allowing it to be utilized in a new delivery format.  Advancements in bioavailability, delivery systems or novel, more sustainable manufacturing processes are representative of these technology platforms. The industry is witnessing new ingredients being introduced touting improved bioavailability or new delivery systems so ingredients can be incorporated in a wide variety of forms such as soft chews, gummies or beverages. This trend will continue and a couple of developing technologies are worth sharing.

Nanotechnology – more with less

One technology receiving attention is nanotechnology. Recently, the USDA provided a grant to the University of Massachusetts Amherst to fund nanoparticle research in food. Although some initial research indicates that some nanoparticles may be harmful, other studies have shown significant benefits. Already the term "nanoceutical" has been created and is utilized in several supplement lines.

Nanotechnology can be defined as engineering at a very small scale. Most of the existing work in nanotechnology for health is in the pharmaceutical industry. It is anticipated that many of those technologies will have crossover applications in supplements and foods. Nanotechnology is utilized to increase the bioavailability of ingredients, remove potential allergens or to impart new physical, visual, or sensory properties.

The potential for innovation through nanotechnology is vast, however the small scale of nanoparticles may react in unpredictable ways with other substances. Since nanotechnology is early on its development, there may be some consumer skepticism associated with it. All questions aside, nanotechnology holds the potential to inject a new burst of ingredients in the not-so-distant future.

Whole-Cell Plant Actives from Plant Cell Culture Technology

Although ingredients produced from plant cell culture are being utilized in the U.S. cosmetic industry and in other country’s supplement markets, their entry into the U.S. supplement industry has only just begun. Plant cell culture technology is the growth and reproduction of plants, plant tissues and/or plant cells in a controlled environment. The process of producing ingredients from plant cell culture technology utilizes methods where the whole plant cell remains intact throughout the process and plant cells are carefully selected to exhibit the best concentration and distribution of targeted actives naturally inherent to the plant. The advantage of producing plant actives through this technology is that it is sustainable, producing an unlimited amount of plant cells without destroying rare and endangered plant species or environments. The technology also allows you to produce targeted actives from plant cells without the unwanted compounds.

The leading company for plant cell culture technology is DianaPlantSciences in Portland, Oregon. DianaPlantSciences is a company of the DIANA Group, a global company based in Europe focused on natural ingredients. Developed from plant cell culture technology, DianaPlantSciences introduced its first ingredient, Cocovanol Cocoa Powder, in November 2012 and is seeking development partners for other ingredient categories.

Technology Platforms Establish Differentiation

The prior examples demonstrate how a particular technology can be utilized across a number of ingredients offering a unique set of attributes along with improved effectiveness. As individual ingredient categories evolve and grow, these technologies will allow an ingredient to become differentiated from its competitors and help sustain category growth.

A Broadened View of Category Marketing

The current perception of category marketing is viewed as the process of capturing a bigger share of an existing market. If you evaluate the fragmented nature of the nutrition industry, this means you have numerous competitors all fighting for their share of the same pie. This same strategy is applied across each ingredient category where each manufacturer has a vitamin C product, a healthy aging product, an eye health product, etc. This has resulted in vast product lines in order to achieve a small slice of each pie.

A broadened view of category marketing, asks the question, "how can we create an overall bigger pie and how can our brand be the one that benefits?” As was witnessed with the lutein market in the late 1990s and the omega-3 market. However, there are very few category champion companies in the industry. A category champion company realizes the most efficient, most productive aspect of branding has nothing to do with a company's market share but it has everything to do with building awareness for a category. If a company builds awareness for the category and is associated as the leader or pioneer within the category, then the company will reap the benefits. This was true for Kemin with "lutein" (FloraGLO Lutein) as well as Ocean Nutrition "omega-3" (MEG-3). Oftentimes, category building is associated with defining a new category but considering that most of the hundreds of ingredients within our industry have very little, if any, consumer awareness, the opportunity is available for a number of ingredients and finished products if a relevant message is developed and marketed.

In order to build a category from nothing, a company needs to do three things:

●The ingredient brand should establish the perception that the brand was the first, the leader, the pioneer, or the original.  You should utilize these words to describe your ingredient.

● Promote the new category through:
- Developing and communicating a core category vocabulary.
- Developing and communicating a core benefit that responds to a need inadequately served by existing products and services.
- Providing a product that distinctively serves the language of the new category.

● Back up what you say with reasons, which include scientific studies, manufacturer support and third-party endorsements.

By being perceived as the first or leader in the category and then aggressively promoting it, one creates both a powerful brand and a rapidly escalating market.  Leading companies never lose sight that promoting the category is the most vital aspect in their marketing plan, increasing the size of the pie rather than their slice of the pie.  
Establishing a brand through category building doesn't necessarily take millions of dollars, just good ideas and passionate people to implement them.

Building a Better Industry

With the global regulatory environment becoming more stringent and a consumer base expecting authenticity and transparency, it's clear the industry is experiencing some growing pains, and the time for cutting corners is no longer. Understanding these challenges and adapting your organization accordingly is an important step in growing this dynamic and vital market.  Never has there been such a time where consumers have felt so empowered to take over the their own health decisions. What an exciting time to prove how our products contribute to better health.

By Steve Hanson

The paleo diet offers opportunity at retail...

As a former retailer in an extremely competitive landscape, I understand the need to be constantly looking for the next big thing that will attract more customers to your store, thus allowing you the opportunity to enhance the shopping experience. Now you’re bringing something new and exciting to the assortment and hopefully allow for a higher ticket sale and higher margins.

We are all aware of the current protein climate and the very competitive arena with all of the “me too” players in the game. Many consumers today are looking for alternatives to whey as more people are realizing their adversities to lactose intolerance and many other digestion and health issues. The disservice to these consumers is that there are not enough retailers catering to these issues and therefore losing market share in the process.

The category currently making waves in the industry is the Paleolithic diet. The diet is not a new one by any means. The paleo diet, more commonly known as the “caveman diet”, refers to consuming a diet which mimics that of the hunter/gatherer cavemen of the prehistoric era and consists of lean meats, seafood, vegetables, fruits and nuts. However, we no longer live in a world that provides us the opportunity to indulge in such a diet due to our constant on-the-go state of being.

Consumers that are looking for a clean, easily digested protein usually request lactose free versions. Fortunately, the paleo diet caters to these consumers, whether they suffer from Celiac disease, are lactose intolerant or simply choose to keep dairy out of their diet.

We are seeing more and more consumers suffering from the above mentioned Celiac disease. Celiac is a condition in which the small intestine cannot absorb the nutrients (protein, fat, carbohydrates, vitamins and minerals) necessary for overall good health. This is due to a substance called gluten which is found in flour which helps bind and prevent crumbling in bread and other baked foods. This is the necessary feature that has made gluten widely used in processed and packaged foods today. Hence, the paleo protein supplements are gluten free, allowing all of the nutrients needed from a daily protein supplement.

Adding to the category of protein may sound odd, but the opportunity of merchandising the paleo concept in your stores will open the doors to existing customers who do not use a protein supplement for personal reasons such as feeling too full or bloating. This alternative is an excellent addition to their basket which will give them a solution to these concerns and fulfill their daily protein needs. Another opportunity is to bring new consumers (especially those faced with health issues such as Celiac disease) who cannot find them at their local or favourite store to your store specifically for these alternatives. This will give them incentive to visit a retailer that can educate and fulfill their specific needs. The commitment to the merchandising of this category is not huge. There are different options, be it powders (beef and/or egg proteins) or bars that are gluten free (be sure it is labelled as such and features the certified gluten free logo) and specific to the paleo diet’s intention. There are not many brands that carry these diet and/or condition specific products so it will be easier to find these niche companies to work with. Be sure to work with brands devoted to assisting these customers to your door which will ultimately benefit your overall sales, margins and profitability.

Expanding into this category will allow you the opportunity to retain those customers who are looking for alternatives. It will also allow the opportunity to increase the consumers’ basket, and due to the premium this category carries, gives you the opportunity to increase the average ticket and your margins!

Opportunity is knocking, are you going to answer?

By Richard Levy