By Len Monheit
“We are on the doorstep of a new generation of activity”. So said Walter Robb, Co-President of Whole Foods in his closing plenary address at this year’s NBJ Summit, last week in Dana Point, California. Robb’s generally upbeat remarks were in stark contrast to opening presentations by David Thibodeau of Canaccord Adams and Loren Israelsen of the United Natural Products Alliance, the former speaking about the capital markets and economic downturn, the latter, on the looming regulatory environment.
It was more than appropriate that the entire spectrum of forecasts and opportunities be presented to the over 200 executives gathered for the annual NBJ event. The Summit is designed to remove participants from day to day operational paradigms and move them into strategic and visionary domains, and this year was no exception, with the final day of the Summit, including a session on innovation in maturing markets, just prior to Robb’s closing speech, being labeled as “one of the best content days this industry has ever seen.”
Robb’s speech particularly was filled with observations that landed. He went through the past thirty years in industry evolution, frequently using visuals from Natural Foods Merchandiser over that period, noting consumer behavior moving from “excess-- to balance and frugality”, observing that “price increases have not yet fully landed” and that in the future, we can expect that the “world will not do what America wants”. Robb observed that while it still needs to be sorted out, the “functional food thing is working”, and that competition everywhere is changing. Specifically addressing Costco, Robb observed, “I’m impressed with them.”
In a presentation filled with hit lists of positives, Robb noted spices, proliferation of premium products, fair trade, organic, the need for consolidation (brands, seals and certifications), and the fact that quality does make a difference. Of interest in a presentation of this type was Robb commenting on his organization’s requirement for an NDI for new ingredients. Companies he observed, must “participate in the larger system”, including sustainability, and the support of a culture supporting environment and health. In closing Robb predicted individualization and customization would be drivers of future change, and urged the audience to “start another revolution together” as he stepped from the podium.
Robb was not the only notable quotable in the three day executive event. UNPA’s Israelsen, commenting on the GMP impact on medium size companies (June 2009) observed, “you only learn who has been swimming naked when the tide goes out.” Israelsen also talked about issues to watch including the set of opportunities that might be created for combination products as the Bayer aspirin and phytosterols product (Aspirin with Heart Advantage) may in fact be “phytosterols gateway to heaven” and open up a market for similar combination or adjunct products such as probiotics, omega-3’s, glucosamine and coenzyme Q10. Is this he pondered, a claims mechanism for supplement ingredients? Israelsen also noted the expectation of a formal FDA New Dietary Ingredient Policy, as FDA and others continue to ask, where are the NDI’s?
David Thibodeau of investment dealer Canaccord Adams, was, to put it mildly, blunt, as he contrasted this year’s presentation (and economic outlook) with last year’s. In short, he opined, “the market looks like crap”, as the price of capital is high, leverage is down and multiples are down. What went probably under the radar was his observation that deals are still getting done and there are buyers out there, albeit reluctant and conservative. Thibodeau’s message fundamentally indicated that now is probably the time to be patient and to build value, and his honesty and frankness was refreshing.
This year’s event had international participation, new companies and old, capital seekers and those offering, food, supplement and service companies.
I’ve now attended at least half a dozen Summits (they do blur a bit at some point). As is always the case, I find myself stimulated, entertained, engaged (and the words can go on and on). From visionary sessions to unparalleled networking experiences (very good friends and colleagues who humor both me and my golf game), this summer interlude is a definite highlight.
To all my ‘Blue’ (and other color) siblings, I salute you, and look forward to next year.