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During the week of 6 October 2014 Euromonitor presented at SupplySide West, one of the nutrition industry’s most important global gatherings. This year’s exposition brought together more than 1,700 of the health ingredient industry’s leading companies, including formulators, manufacturers, laboratory experts and finished product producers. Euromonitor’s Consumer Health Analyst Chris Schmidt and Head of Health and Wellness Ewa Hudson delivered insights into sports nutrition and energy drinks, respectively. As in years past, SupplySide West provided a comprehensive overview of the industry’s most important trends and developments, including the product and market developments, new technologies and regulatory changes that are likely to drive the industry moving forward.
One of the most important takeaways from the event was the increasingly politicized nature of the industry. As former US Food and Drug Administration (FDA) Division of Dietary Supplement Programs director (and current head of the Natural Products Association) Daniel Fabricant acutely stated, the dietary supplements industry was itself born of legislation. As the landmark Dietary Supplement Health and Education Act (DSHEA) that codified many of the industry’s most important regulations turns 20, the importance of government and regulatory agency engagement is more important than ever. With the makeup of the US federal legislature in near constant flux (the House of Representatives has experienced 40% turnover since 2010), new lawmakers – many of whom are unfamiliar with the industry – are constantly being sworn in. This churn, combined with negative portrayals of dietary supplements in the popular media, means the industry will need to focus more closely on its lobbying efforts.
One obvious target will be the hotly anticipated New Dietary Ingredient final guidance due out by the FDA in the next three months. Significant questions, such as lingering concerns around the exact definition of a “chemically altered” ingredient and potential official grandfathered ingredient lists, remain open. Both pose potentially substantial benefits and roadblocks for innovation. While hard and fast definitions and approved ingredients will take a significant amount of the guess work out of new product development, panellists including Duffy McKay of the Council for Responsible Nutrition and General Counsel to the American Herbal Products Association Anthony Young raised concerns that the FDA might take a much more narrow view of both topics than the industry might hope.
For finished product manufacturers, consumer demands for more tailored products present new avenues for growth, along with ample opportunity for headaches. While messages tailored around specific need states (mood and relaxation are moving from strength to strength), product purity (natural, non-GMO, Kosher/Halaal and more) and personalisation (from customized flavours to nutrient contents) can inspire more consistent adherence and justify price premiums, they demand far greater flexibility from producers than has previously been the case, both in terms of consumer communication and basic manufacturing capability.
Within the dietary supplement industry, this poses significant challenges for the heavyweight pharmaceutical and consumer packaged goods companies that have long dominated commodity categories like multivitamins. In addition to their generally “too big to be cool” market position, they will have to adapt quickly to overcome entrenched investments in formulas and formats that are continually losing consumer interest. As Steve French of the Natural Marketing Institute noted, 20% of Americans have issues swallowing pills, due in large part to aging and the increasing pill intake across all product classes (prescription drugs, OTC drugs and dietary supplements). However, the issue is squeezing the industry from the other end of the demographic spectrum, too, as the physical weariness for pills among older consumers is supplemented by cultural demands for more food-like forms Millennials, the highly vaunted “next big thing” consumer demographic.
The blurring of the lines between health and wellness foods and dietary supplements represents a great opportunity for nimble producers. While the growing “return to nature” trend (consumers are increasingly interested in getting nutrients from whole foods) has led to sleepless nights for some producers, others have doubled down on education around specific ingredients and novel formats. By focusing on a balanced nutrition message, ingredient manufacturers and consumer product producers alike can show the importance of supplementation to even the most diligent eater. Incorporating more food-sources into products has also proven successful in breaking down the food/supplement mental wall. Products like EnerBee’s Organic Energy Drinks (a SupplySide Editor’s Choice Awards Finalist), which blends food benefits from honey and green tea with trending supplement ingredients like royal jelly and bee pollen, are creating crossover products that appeal to both whole foods eaters and pill swallowers.
Sports nutrition, the fastest-growing category of consumer health (according to Euromonitor International’s latest estimates), is proving an incredibly popular target for category blurring. As competition on the shelves of pre-workout supplements and protein powders reaches a crescendo, more companies are looking to lure consumer spending with complementary vitamin and dietary supplement products. Whether positioning glucosamine and chondroitin products around sports recovery like Kingfisher Media’s Extreme Flex (albeit with the questionable package claim of being an “all natural equivalent to ibuprofen”), or probiotics specifically positioned around extending exercise duration and reducing exercise-related respiratory illness like Dupont’s Howaru Protect Sport, a growing number of producers are increasingly looking to benefit from sports and active nutrition’s growing appeal.