By Len Monheit
For some time I’ve been analyzing the development and introduction of new ingredients and finished products in our feature coverage areas, struggling to understand the chicken and egg sequence that leads to successful new product launch. Is it a readily apparent market need (ie. cardiovascular health) an innovative new ingredient with emerging science, or an aggressive product marketer, that really drives the new product opportunity? In reality, I think most will agree that it involves a formula encompassing all three with numerous additional factors including competition, channel strategy, intellectual property, branding and more.
This past week, as I was preparing for an upcoming presentation on ingredient trends to be made in Japan, I was struggling t o identify the ‘real’ ingredient trends we’re observing on a global basis in functional foods and beverages, and dietary supplements. Sure, we’re seeing the successful emergence of ‘replacement ingredients’ (fiber, trans-fat alternatives and novel sweeteners), as well as the proliferation of fruit-based (‘superfuit’ based offerings. The emerging science of late last year on resveratrol has led directly to several new entrants on both ingredients and finished products sides, and in North America, it now appears as though the ultimate promise and acceptance of probiotics in food and beverage forms is quickly becoming a reality. Whether it’s Kraft Canada introducing LiveActive cheddar cheese with probiotics, Cargill’s emergence on the scene in omega-3 ingredients for food applications, Halal, Kosher and Organic certifications of ingredients allowing a proliferation of new finished products, or Natrol’s newest Acai supplement, we are seeing a continued evolution, underscored by several dominant themes.
Market pull is a huge driver. From sustainability to organic to better for you products, the impact in these movements, directly up the value chain, is enormous. It triggers different relationships with and demands upon suppliers – to source (and develop internally) effectively and to either anticipate or respond to customers’ value-based decisions. Ingredient traction is another market force leading to awareness first, and validation second, as omega-3 based products proliferate in food, beverage and supplement marketplaces. (Cargill’s entry to the mix further validates the opportunity).
The increasing buzz around fruits like mangosteen, goji and acai has been driven largely by aggressive marketing, while the traction now being realized by probiotics can be attributed in good part to persistence or patience, or perhaps even to new science and a raising of the baseline education threshold that enables consumers to accept that these organisms positively impact health. (Or perhaps it’s the manufacturer’s belief that consumers are merely ready to accept the connection.)
Whatever the case, these are some of the current market opportunities that are being embraced – in many instances, with significant commitment. These are also the ‘above-ground’ elements, they’re ‘what we can see’. Development is ongoing at sub-view levels around the world, in some cases, based on the same dynamic forces we recognize as current impacts, in other cases, in anticipation of as yet undetermined or undefined forces, trends and needs, or based on internal processes that seek to provide early warning systems of market opportunities (based largely on various forms of intelligence gathering). And don’t forget the regulatory implications. Spending millions in a category that might soon be more or less challenging is another calculated risk being faced by many organizations, so knowing and understanding that part of the environment also becomes a critical form of intelligence. (Just last week I was contacted by a top 20 US-based supplement company, supposedly with a North American, if not global strategy, dealing only now for the first time, over three years after their inception, with Canada’s Natural Health Products regulations.)
Intelligence is defined by some as the sum total of all the relevant information available and superimposing on this, appropriate analytical tools to put it into individual business context. Whether it’s the newest New Dietary Ingredient (NDI) submission to FDA, the latest patent filed, the most recent consumer trends or preference survey or the results of a proprietary focus group, the value of the intelligence depends totally on how it is processed and acted upon. Whether it’s at a Nutracon or a Natural Products Association Marketplace, information gathered is a very different data set than information used. It’s been my experience, that many companies are really good at the former, fewer excel at the latter. Furthermore, it seems to me that the more credible citations a company or product receives, the higher the chances of the company or product being caught in the net of intelligence inputs. Context though, is what increases the likelihood of information gathered being transformed into intelligence used effectively.
Perhaps the above statement of the quasi-obvious has been helpful. Whether it has or not, it’s the type of thing that has formed the basis for a lot of thinking that has been going on at NPIcenter lately, and that is about to lead to a new e-publication on a monthly basis.
Beginning in May, look for NPIbuzz, a monthly e-newsletter focusing on product introductions and technology advancements on both the ingredient and finished product sides, and attempting to put them (and the companies behind them) into a bit of context. Our intention in this publication will be to assist our audience in developing actionable plans based on analysis of product trends.