By Len Monheit
In reviewing trade communication, product launch strategies and event participation lists, Iâm struck by the jockeying for position that goes on at so many levels of our industry value chain. We see companies expanding their Intellectual Property positions on ingredients as much as finished products, (although sometimes I think that news about a new patent being awarded is being abused as an opportunity to title your patent or application with something that the FTC (Federal Trade Commission) most likely would never allow in advertising). We see organizations struggling to reach dominant category position through educational websites and community building exercises, and observe the usual investments in presentations at industry events to pitch emerging science, or as is sometimes the case, to mask blatant advertising through the use of scientific terms.
Yet the world is hungry for new and improved functional products. We hear this from the investment community; we see it in the behavior of mid to large size ingredient companies actively seeking acquisitions, or a direct expansion of their product portfolio through in-licensing or other deals. And we notice it in the activities of manufacturers hungrily seeking that winning product that will leapfrog them over their competition.
Iâm intrigued to watch the most recent and certain to be upcoming, product introductions in our North American marketplace. This past week, Swiss ingredient company Linnea SA rolled out HMRlignanâ¢, (7-hydroxymatairesinol) from the Norway spruce (picea abies). The product is an enterolactone precursor, touted to offer similar health benefits to lignans from other sources, but at a lower dose, dose cost and with higher efficacy.
In this product introduction, there are several observations that might be meaningful for the future overall growth and prospects on the ingredient side:
- This introduction has thus far been a rather meticulous process, with milestones including a successful 2004 NDI notification, pending GRAS affirmation process, a background of clinical data (various phases and models).
- Rather than a de novo product introduction, the approach has been to leverage whatever awareness exists regarding the health benefits of lignans, focus the science, especially around bioavailability, and then develop a production cost impact and present this as a key message. (âHere is what it costs per doseâ, the style of message understood in both food and pharma models.) Note: Weâve been predicting that bioavailability and the scientific platform to prove bioavailability will be critical messaging and provide differentiation opportunities for ingredient and finished product companies.
- This licensing relationship (between Finlandâs Hormos Medical and Linnea) is not a new type, but weâre seeing more collaboration and licensing as well as interest in this business growth model, proven in other sectors like pharma and biotech.
- The development and use of an educational website as part of the program, to be a platform, reinforce the science and health message and to support entire category building is becoming more predominant.(http://www.hmrlignan.com/)
- The challenge has and always will be in messaging. In this case, the challenge is two-fold. With multiple health targets, cardio, prostate, breast and menopause, what will the priority and strategy be to avoid confusion or the perception that youâre pitching a âmagic bulletâ? Secondly, how do you present both product and the benefit in appropriate scientific terms? What is the awareness level of âligansâ? How deep down the value chain can you take that word? And in the over-simplification of the science that almost certainly must occur, what critical elements will be lost?
Letâs put this into a bit of context. New products are being introduced â many offering both a health benefit as well as a technological/cost benefit. (lumping in dose cost, bioavailability etc.). Creative relationships meeting evolving needs are being formed. In product introduction, science and marketing are ideally operating hand-in-hand. And companies are making heavy commitments in order to ideally garner category domination, whether the category is defined as an ingredient class or a health condition.
Consider the upcoming Health Foods conference in Washington next month. Cargill Health & Food Technologies, fresh off major displays and investment at IFT where healthy ingredients and related messaging were a very minor subset of a major food industry event, has invested to become the title sponsor, featuring their Corowiseâ¢ ingredient. (http://www.npicenter.com/anm/templates/newsATemp.aspx?articleid=13315&zoneid=37) Essentially, the obvious objective is to associate the tip of the convergence point (health + food) with Corowiseâ¢, and to do so in a much smaller event where it is HEALTH + food rather than FOOD + health. I would expect companies to seek out other convergent point opportunities where early adaptors are likely to gather, and would expect event organizers to create many more of these opportunities.