Editorial: Musings On SupplySide West, 2005

Lens' Blog
- A Take on 'GAIT'
- Will AOAC Take on Hoodia?

By Len Monheit

I’ve now had an entire week to distill my thoughts about the recently concluded SupplySide West trade show in Las Vegas and have concluded that I didn’t do the show justice. This, I’ll have you know, is a sentiment that I usually reserve for the overwhelming Natural Products Expo in Anaheim in March.

The show itself really began with the pre-show messages and communication, both from show organizers as well as participants, and maybe it was only my imagination, but it certainly seemed as though there were many more messages from participants in the event lead-up, obviously seeking to leverage their show investments.

I actually started my own show involvement on the golf course, personally forgoing the opening day’s educational events. I did start my show meetings a bit later Wednesday afternoon and by the time the show was over Friday at 5, I had accomplished about three quarters of my show objectives. (I never did get to walk the entire show floor.)

For some, 6,100 attendees and 700 booths might not seem like a lot to cover over two days and essentially eighteen to twenty hours of trade show and associated events. Like most industry events, it’s really three days of intensity and being part of a pretty tight community – the business, networking and some fun all get rolled up.

I was able to attend a few of the presentations (I missed the ‘state of the industry as I was tied up as part of another conflicting presentation), but heard the feedback on it and numerous other presentations. You might call it the ‘showbuzz factor’ which, for this show, was very significant. People were not only paying attention, they were absolutely buzzing about it.

Of course, there are the regulatory issues including ‘imminent’ GMPs (this time for real) and the observation that an amazing number of companies have taken a complete ‘wait and see attitude’ and have not even begun preparing for compliance with the new rule. Their logic goes something like this: “Well, we don’t really know what the rule will look like in final form, we have a few years to comply, and we didn’t want to waste too much time on speculation.” Industry pundits are now saying that 5-10% of companies won’t be able to comply – one would guess that those that are waiting for a final rule before initiating a compliance strategy would most likely be among those that fall by the wayside. (So much for strategic planning).

In other regulatory news, it appears that legislation regarding mandatory serious adverse event reporting for dietary supplements is also quite close, now supported by all industry trade associations. Amidst the buzz, I also heard comments about New Dietary Ingredients, including some companies deliberately ignoring their obligation for filing until an official guidance document is prepared. On the other hand, several companies with new ingredients are factoring in NDI submissions as part of the cost of doing business.

Industry engaging as part of the solution to the health care crisis is a key opportunity and a challenge a the same time. The results from the latest Lewin study which show potential billions in health care cost savings from seniors’ use of omega-3 fatty acids and lutein with zeaxanthin, provide industry a platform that can be utilized to be part of this dialogue – with legislators, policy-makers, health care providers, insurance companies and others.

The exhibitor sponsored presentations were, as was to be expected, quite variable, both in polish, as well as attendance. The mid-range attendance appeared to be about 30 or so people, with some, such as the Cognis presentation on using science and marketing to drive sales of phytosterols, reaching 70 plus attendees. Several seminars had between 8 and 20 attendees, a tough justification for the seminar investment, made perhaps a bit easier if one measures attendee quality – which in general was high. I did attend several of these presentations and as an overview, observed one or two companies are repeating their messaging show after show and this act of repetition, contrary to causing disinterest, seems to be leading to new inquiries.

Other companies are using the show and the VendorWorks format to launch products, present new science or new programs. The feedback from this group of hosts was mixed – there are a lot of conflicting events going on at the same time. Those that were up against the ‘standing room only’ State of the Industry presentation suffered most, and perhaps a different schedule or structure for the Friday morning should apply.

Commodity products and the companies selling them are in some difficulty. Global competition, margin squeeze and consolidation are taking their toll. This is creating a desire on the part of catalog ingredient ‘distributors’ to reposition with their suppliers for exclusivity or a branding attempt, or to aggressively seek novel products from around the world with the substantiation reasonably complete. And in our global marketplace, there are companies from around the world that have done a good part of the work and now want to enter the North American market – with the right partner.

This leads right into the next observation. International participation at this show is always high. It is not always appropriate, relevant or interesting to the North American market. This year, that wasn’t the case as the international representation, while once again high in absolute numbers, was this time better organized, more relevant to the US market in their presentations and of generally higher quality. There was a well rounded group of New Zealand-based companies in attendance including Fonterra, Hort Research, Keratec and Waitaki Biosciences – most of whom experienced success and significant interest in what was their first active participation at this event.

Other regions of the world were also actively represented. From Canada to Asia, the international aspect of this show emphasized the importance of the global marketplace, in both science as well as supply. Booths from India, China, Spain and Japan specifically were all well equipped to handle show floor inquiries, much better than in previous years.

It was evident - on the show floor, in the presentations, and in the networking events, that fierce battles for differentiation are raging. Pomegranate products, lignans, selenium sources, and even hoodia were all the subject of debate as companies sought that mind-share and messaging edge that would lead to success. On the show floor, I had one 45 minute discussion with a company making outrageous claims about all of its products (legal and not), who was bold enough to criticize quality and buying practices of no less than three of its competitors by name.

Product introductions are obviously a focus of this event. In recent years impact products have been few and far between. Some of the 'launches' at this SupplySide include Linnea's HMRlignan(TM) lignan ingredient from Norway Spruce, Embria's eXselen pasteurized yeast selenium, and Trilean(TM) a combination product from Lipid Nutrition, Soft-Gel and Pharmachem, containing GlucoTrim(TM), Clarinol(TM) and Phase 2(TM).

The roles of education and persistence in this battle for differentiation cannot be understated – and here is where the properly organized seminar can pay dividends and one less so be essentially a waste of money. The value of investment in brand-building by ingredient suppliers was a topic under discussion around the show floor, and as one key type of differentiation, if done well, can justify the investment. It was very interesting to note that Cognis, taking that one step further, determined that they would introduce a consumer brand for their Vegapure® phytosterol product ‘Heart Choice™' beginning February 2006. According to the company, initial feedback has been excellent with candidate companies excited to get involved in this branding program.

We’ve also been notified of several new category or product informational websites being introduced. It remains to be seen how effective these will be – it really depends on maintenance and community building exercise around these sites as well as integration into all product and marketing messages.

The show floor itself was quite active, more so the first day – as per usual. My contacts described the attendees as ‘interested’, motivated’ and ‘qualified’. Hopefully that leads to new business although I did see a decent amount of business being transacted right at the booth. While traffic slowed day two, especially in the afternoon, there was some activity almost right to show’s end and despite the slowing, Thursday’s activity had made the majority of the exhibitors quite content.

Pervading the show was the realization that with its acquisition of Food Product Design magazine, show hosts Virgo Publishing had another level to attract ongoing participation and growth and move more dynamically into the functional food arena. While most on the show floor have been a bit disappointed with nutritional ingredient traction in foods and beverages, next year’s SupplySide West, if the new magazine and its audience can be properly leveraged, will be an opportunity for nutritional ingredients to approach the foods industry from another angle.

In summary, this was a good show that delivered solid value for almost all of the participants I spoke with. I can’t help but observe and wonder whether the actual event, for this show or for any event for that matter, is the end-point of an objective, or just the beginning. I’d like to think that it’s a platform and opportunity for feedback that leads to the next evolution and hence business growth. For some I fear, it’s the end product of weeks and months of marketing group preparation, and parts of the organization go on stand-by until the next major event.

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