Editorial: On The Horizon

By Len Monheit

It might not be the absolute busiest time of the year in the industry, but things are still buzzing:

NBTY has bought Zila Nutraceuticals, bringing Ester-C® into its fold. AIBMR, ZMC-Kougen, Natrol and Cardinal Nutrition have all made personnel announcements, a Utah judges panel has reversed the decision against the FDA, ruling that the agency’s risk assessment was adequate to lead to the federal ephedra ban at all doses, the second quarter earnings reporting season continues with mostly positive results, NSF-s ‘Certified for Sport™ program gets some traction in the supplements sector, and SoftGel Technologies® and LycoRed team up to introduce LyCoQ™, combining Lyc-O-Mato® whole tomato extract with CoQsol® brand CoQ10 in a soft gelatin capsule.

Well, so much for a quiet vacation and fall preparation period.

Does this mean it’s all engines go for the industry as it chases supplement and functional food opportunities?

Judging by dialogue at the Newport Summit, and analyzing pace of new product introductions so far this year, the next six months will likely see a continuation of many of the challenges faced thus far in 2006. Some channels, especially the direct marketers, continue to do extremely well and are excited by the opportunities they see emerging in the next few months, and well into 2007 and 2008.

In Canada, Health Canada’s Natural Health Products Directorate is still optimistically promising to clear its backlog of Natural Product Number submissions. While approvals are coming much more quickly and consistently, it is apparent that there is a long way to go, especially for the more complex formulas. We’ll see what the market buzz really is, and the state of product launches, at the Canadian Health Foods Association (CHFA) event, Expo East, coming up September 7-10 in Toronto.

The show season in the United States will hit active mode in September as well. First, there’s the NNFA-West Healthy Harvest event, September 15-17, in Santa Clara, the CRN annual conference in Boston from September 16-19, New Hope’s Healthy Foods Conference October 4-5 with Natural Products Expo East (October 4-7) in Baltimore, HerbDay 2006 on October 14, and Virgo’s SupplySide West, October 18-20 in Las Vegas. And these are only the main events and only on this side of the Atlantic. Suffice it to say that there will be a lot of activity and news forthcoming over the next 75 days.

We move next to the regulatory environment, where, for the most part, there is nothing new to report. (With the exception of the aforementioned Utah ephedra ruling which was announced yesterday). In the minds of many, this issue was a can’t win situation – if the original decision was turned down (as it was), the concern was that FDA could essentially use its risk assessment criteria to take any supplement off the market. If the original decision was upheld, industry opponents would claim that under DSHEA, FDA’s powers were inadequate to remove ‘dangerous’ products from the marketplace. I fear the rhetoric and arguments on this one are not over yet.

The balance of the regulatory environment in the US has been relatively quiet (a few enforcement actions notwithstanding), including mandatory serious AER legislation, and much of the momentum and activity in legislation will certainly depend on the November election results.

Will consolidation and acquisitions on the ingredient side of the business continue?
-It’s certain that appetites are out there, but strong value might be elusive.
Will the direct channel continue its strong showing?
-Participants are betting it will.
Will application of existing regulations in both Canada and the United States lead to more stable and even positive market conditions?
-Probably not by itself.
Will new regulation impact industry’s ability to thrive?
-In the long term, for the responsible players, probably so.
Will new, creative global strategies emerge as new EU rules apply and as the Asian marketplace continues to change?
-Definitely so.

Is it worth staying tuned with huge opportunities, dynamics and challenges all applying to our industry?

-You bet it is.

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.