A Year in Preview
For some it was with a sigh of relief that they said good-bye to 2009 and ushered in 2010. Yet for many, one perception would be that industry had, for the most part, weathered much of the economic and regulatory storm well, emerging if not actually stronger, then at least a bit more confident of its own resilience. For the most part though, 2009 will go down as an opportunity for reflection, reorganization, repositioning and a whole pile of other ‘r’ words that presumably prepare our sector to be even more competitive and more a part of the integrated health solutions dialogue of the future.
One cannot effectively anticipate what will define 2010 without at least a brief recap of 2009….so here goes…
Democratic power in the United States was going to increase pressure on DSHEA, and with mid-size companies now responsible under the dietary supplement GMPs, we expected revelations as FDA inspectors walked the halls (and the records) of these supplement manufacturers. True, several informative 483s were issued, but business practices did not radically change. What we did see happening was more pressure by manufacturers for supply chain transparency, in part a direct outcome of questions being asked during GMP inspections. The other part of this issue is the product quality/food safety dialogue where manufacturers of a broad range of goods had better learn where their inputs really come from. (A perverse (pessimistic) analysis of this behavior would predict that it provides those less scrupulous with a means for further raw material cost reductions.)
With the economy in a spin, and healthcare as a key agenda topic, 2009 saw movement, but certainly not an outcome that would predict supplements would be any further entrenched within the health solution dialogue. And on the Hill, the sports community re-emerged as one of industry’s most outspoken critics, although with signs of possible dialogue and communication with industry, despite rhetoric to the contrary.
FDA and FTC both got active and aggressive. Seizures and crack-downs certainly became more commonplace in this lesser-tolerance era. Most of industry applauded the increased enforcement, although as Hydroxycut became a ‘4-letter word’, there were those that believed a serious overstep had occurred. The new FDA (a more transparent and responsive one it appears), did meet with industry on the subject, reiterating its ‘some risk, zero benefit’ argument, along with its intention to aggressively track and take action in those instances where liver toxicity was suspected. 2009 saw the emergence of H1N1, and we in turn saw outliers take advantage of a fearful public, touting all sorts of products, marketed as supplements, which would handle the scare.
And as industry sought more feedback and guidance, FDA did exactly that, offering up a guidance on beverage format dietary supplements in the late year, and indicating that a long-awaited guidance on New Dietary Ingredients, was almost ready for public ‘consumption’. NDIs, currently probably the most poorly utilized tool offered to FDA as part of DHSEA, provide the opportunity for FDA to gain control over new ingredients reaching the market. Some of what’s at stake will be: Documentation to support Old Dietary Ingredients (ODIs), just what changes can and cannot be made to keep an ODI an ODI, what transition period will be allowed, and what the ‘new’ standards for a successful NDI submission are likely to be.
As health claims issues continue to percolate in industry news circles, manufacturer-based research continues to suggest that health claims, with the exception of structure function claims, are far too confusing, cumbersome or non-ingenuous, to appear on labels. With global regulatory bodies discussing standards of evidence for all health claims, expect this issue to continue to smolder, even as companies try to allocate ‘appropriate’ dollars to basic and applied research.
The term ‘flat is the new up’ has now given way to all sorts of justifications for minor contraction in the light of major challenge. Although there were signs that new product introductions rebounded in the second half of the year, one can argue that with a cash crunch, new product ‘investment’ stalled considerably. Numerous capital projects and expansions were put on hold, but amidst the quieting, several organizations dug relatively deep, kept their momentum (and sales and marketing growth), taking advantage of lack of action on the part of competitors to grow market share. Most noticeable in the stall were perhaps the functional food and organic markets, with the latter still growing, but at lesser rates than previous years. Supplements continued to perform, with some brand switching, but overall, consumers recommitted to taking control over what they could – their personal health choices.
State of the Science
In late year we observed presentation of the first human research on resveratrol, so now 2010 will really determine the fate of this high-profile, high-potential ingredient. Vitamin D, omega-3s and probiotics all saw their science base broaden, and 2010 should see a re-evaluation of an RDI for the former, more dialogue to hopefully establish an RDI for omega-3s and continued acceptance of the health benefits of probiotics and the linkage between digestive health and overall immunity. In the not-so-positive sense, folic acid, industry’s poster child for fortification, received some of the negative press usually reserved for herbals and vitamin E.
On the products side, the dialogue around sweeteners ‘intensified’. The stevia/Reb A category, along with becoming more poorly defined and confusing, saw proliferation of products from around the world, with new impetus behind sugar alcohols as well as natural sweeteners such as agave and lo-han. And novel sweetener solutions are not going to be left to the realm of typical health ingredients companies. There are big players with huge stakes out there, with technology also yet to play a role. 2010 will either see more clutter, confusion and misinformation, or if I put my ‘glass half full’ hat on, organization will emerge to ensure the opportunity is not squandered.
News in 2009 was full of gluten-free product introductions, and of various fiber sources. Expect the term prebiotics to continue to gain in recognition, even as other terms like antioxidants reach a saturation point as consumer knowledge deepens. Resveratrol products will proliferate, consumers will begin to learn to differentiate proteins, protein sources and composition.
The crystal ball:
- Just as 2009 saw cross-channel tie-ups (MLM/Retail/Practitioner etc), expect at least one large, defining deal to challenge many industry beliefs and paradigms.
- Consumers will begin to learn to differentiate proteins, protein sources and composition.
- Manufacturers will continue to shy away from areas that are contentious (krill) in favor of those where the path and players is clear cut.
- Industry will wait with bated breath for an NDI guidance, but may be more confused with it than before.
- Sweeteners will continue to dominate industry headlines
- Gluten-free and other healthier alternative products will continue to grow
- Continued pressure on the supply chain will force some companies to change business models…and value propositions…or perish.
- Contract manufacturing decisions will emerge as one of the single most significant decisions execs can make to position their companies successfully…for compliance…and long-term profitability.