Executive Interview: Q&A with Susan Haeger

The NNFA Crusader Award recognizes individuals who have made notable contributions to the natural products industry above and beyond commercial success and whose contributions have had a lasting benefit. This year Susan Haeger will receive the award on July 17th at the NNFA 2005 Show. Susan has been working to move the natural products industry forward for more than 20 years. Her efforts of behalf of the natural, organic, health and wellness industry have encompassed consumer packaged goods marketing, public relations, non-profit consumer advocacy, regulatory affairs and market development for publishing, conferences and trade shows in both domestic and global markets.

NPI: You have been in the natural products industry in various capacities, first as a Marketing and PR consultant, then as President/CEO of the Citizens For Health advocacy group, and most recently as Vice President Strategic Global Affairs for the New Hope division of Penton Media. What are the most notable changes you have seen in the industry in those years?

The industry has gone from niche to mainstream, and from being driven by local community focused individuals through health food and vitamin shops to a global industry in large part owned and operated by multi-national packaged goods and ingredient companies with products being sold in every channel of distribution.

NPI: How have the changes impacted us?

I came to this industry in the early 1980s as a passionate advocate of offering people information, choices and access to alternatives to conventional medicine, highly processed and chemical-additive manufactured foods and unsustainable environmental practices. For many years our reach was limited to small and fragmented consumer markets. Today the alternatives pioneered by this industry are having significant positive impact on the environment as well as changing the way multi-national food processors, pharmaceutical companies and professional health organizations and practitioners are operating. The fundamental drive of this industry to create global change is being realized – and products and therapies that support lifestyles focused on health, wellness and sustainability are becoming mainstream, manifesting and cross pollinating across the globe.

NPI: What does this bode for the future?

While crossing the chasm from early adopters to mainstreaming has created opportunity, it has also minimized the entrepreneurial drivers and made launching novel new products and therapies more challenging and expensive. I think that we will soon see a second generation industry, individuals going back to the original roots that drove the success we enjoy today playing out in new retail and direct to consumer formats. The web has also certainly revolutionized that opportunity.

NPI: A number of years ago when you ran Citizens For Health (CFH) and I was on the board, we had many conversations about industry’s unwillingness to support organizations working to protect its interests. Did you ever figure out why that was?

I think the “natural products industry” many of us grew up with is now a myth. It’s been a long time since the raw material producers, ingredient providers, processors, brand marketers and retailers for healthy products and therapies comprised one cohesive community of like-minded, values-sharing folks. Today the diversity of company ownership – from entrepreneurs to multi-nationals; the multiple channel requirements – from independent specialty retailers to big box stores and direct to consumer channels; the diverse regulatory and commercial issues faced by category segments as well as global regions means that there are few, if any, one fits all issue or market platforms. That means money is primarily invested to address corporate development needs, not the social change agendas that drove many of the founding companies. When these interests coincide with enough mass, then funding for trade and consumer lobbying/campaigns is robust – otherwise it is fragmented and special-interest focused.

NPI: Has this changed?

I don’t think so. There are companies and individuals that have always shown up and given resources, time and money when action is needed. For the twenty –plus years I have been involved it has consistently been the same core of individuals and companies. In the landscape of opportunity, I was most disappointed that the efforts to create a Natural Products Council – like the Dairy and Meat industries have so successfully done – was never achieved. Turf issues, control issues, the inability to agree on a vision and agenda platform to create public awareness of a “single industry” united to deliver healthy and sustainable alternatives for healthy living has meant missed opportunity to create more significant public influence..

NPI: You are known for being a strategic thinker. What kind of strategy should industry employ to improve the current climate of mistrust from legislators, media and the health care industry?

The supplement, food and personal care/cosmetic sectors of the business have very different consumer and regulatory issues, yet fundamentally we are an industry built on healthy living lifestyles. Companies and trade associations must demand that products deliver on the promise of health – for people and the planet, from raw material production to processing, quality standards, packaging and product performance.

NPI: You have known many of the people who built successful companies that have been acquired. What we have now are fewer large and influential companies that are still run by the people who built them. Speak to how that has changed the character of the industry.

Most of the individuals who built the industry were driven by personal or family health issues that conventional healthcare was unable to address, or by a vision of healthier quality of life alternatives. Those people invested with an eye to long term societal change. Today we find product and market development primarily driven by concerns for shareholder return, margins and contribution profit.

NPI: From your experience in different and varied positions over the years, could you provide us with your perspective of how the industry has matured from one of booming percentage growth to now more segmented growth?

Domestically there are areas, like some supplement categories, significantly affected by consumer perceptions and regulatory issues – however many of these products are seeing double-digit growth in small segmented markets that have the potential for enormous growth, like the health professional channels, as well as new emerging markets around the globe. Certain channels of distribution have been saturated, most of the “fad” drivers that fueled rapid growth failed to deliver on marketing claims. Significant sectors of the industry are maturing – but many more hold opportunity for significant growth.

NPI: How does one identify needs and opportunities in times like these?

Closely watching consumer trends, finding novel solutions with unique features, utilizing proprietary technologies and creating lifestyle solutions…looking outside the box to unserved ethnic communities, government and institutional populations…entering new global regions….creating partnerships with leading social influencers.

NPI: What do you envision the market to be like in years to come?

Recent investments by sophisticated and significant multi-billion dollar Wall Street players like Leon Black/The Apollo Group in GNC, Ron Burkle/Yucaipa (which have owned 24% of the grocery market) investing in Wild Oats, and partnerships between UBS Warburg and Sterling Rice Group (with their pedigree multi-national mainstream food and beverage clients) signify quantum changes in the industry. If the trend continues, and other Wall Street capital follows with financial investment and infusion it will take the health and wellness industry to a radically new level.

In the food industry I see the high-level corporate sustainability positions that Gene Kahn and Gary Hirschberg have been given with General Mills and Dannone, the financial success that Steve Demos and the White Wave group demonstrated to Wall Street, as developments that hold great promise for the future. I hope to see successful entrepreneurs who have sold companies invest in developing and guiding future leadership. I think such action would command the attention of academia, public policy leaders and the broader business community to more significantly invest.

I see qualified and researched Traditional Medicines that are emerging from divergent corners of the globe, influencing and helping shape a future for "well-care" versus "disease-care"; certified, organic and sustainable products positively influencing agricultural, textile and home building production - especially in developing economies like China where demand for such products from wealthier developed markets can influence their future planning; I see populations that have been negatively impacted by America's export of junk and fast-food, returning to their roots of natural foods.

I hope to soon see these products, services and therapies reaching lower-income populations who have been most adversely affected by the lack of choice, information and access to healthy and sustainable lifestyle options - just look at America's child obesity crisis and out of control healthcare costs as examples. I think the organic community learned a lot about how to address the agriculture sector from what has challenged the dietary supplement community - and I hope the supplement sector seize the opportunity to achieve similar progress in the healthcare industry.

NPI: And what are some ways for the industry to influence growth patterns?

Investing in public policy, political and regulatory relationships and dialogue. It still astonishes to me how little buy-in and partnership we have achieved among public policy influencers; and how little has been invested in building sustainable organizations to leverage consumer influence.

NPI: Can you speak to how quality issues have changed over the years?

For many years consumers embraced everything marketed as “natural” at face value. Today we have much more educated, discerning and demanding consumers who require that industry be able to demonstrate product quality and efficacy claims.

NPI: And how and what the industry needs to do to continually improve quality?

Establishing standards for quality are imperative but across all product segments the health and wellness industry is significantly challenged in this, as agricultural, pharmaceutical, cosmetic and other product development and production has been framed and predicated on chemical, non-organic models. The products and therapies that come from the health and wellness industry cannot be addressed this way – yet research and development funding has been funneled through those mainstream models. This means it is sometimes harder to assess quality on those terms and also makes it imperative that we do everything we can to demonstrate quality within our paradigm. Advocates, like Senators Tom Harkin, Orrin Hatch and Patrick Lehey have been instrumental in addressing these issues with NIH, FDA and USDA – yet much more needs to be done.

NPI: Is self-policing practical?

I think industry self-policing to date has too often been the fox guarding the hen-house. Certain segments, like organics, have achieved more success in this area because they have achieved a more defined regulatory framework and stronger community leadership. The dietary supplement category has had multiple efforts over the last 20 years that have still not created cohesive oversight to addresses consumer confidence issues, or consumer watchdog critics. Other products areas like textiles – and the dyes used; body care and the ingredients used; home building products and what defines “sustainable” are all emerging and will be challenged to address similar issues.

NPI: What would need to happen?

I think the fundamental challenge is that consumers, industry and government regulators have differing and often conflicting views and agendas. Industry has shown that when they enroll the public they can positively affect government. Yet industry has often been reluctant to address the segments of consumer advocates who are their harshest critics, or when they have tried and not been successful, they have failed to invest in public/industry partnerships that work to address and resolve the differences. This creates opportunity for regulators to leverage their own agenda with the public.

NPI: What has been your most satisfying moment of your time in industry and why?

There are two significant periods for me. First, at Citizens For Health - successfully changing misguided government regulation through citizen action. I’ll never forget standing in health food stores with my young son getting shoppers to sign postcards and letters to “Keep Organic Organic”, and to oppose FDAs efforts to classify normal body processes – like pregnancy – as disease states that would be disallowed for Structure/Function claims. Hundreds of thousands of individuals responded and forced government regulators to listen and change. Those consumer watchdog efforts are the heart and soul of the healthy living community. No other industry in America has garnered such consistent public support.

The second period has been the opportunity to work with government, academia and industry in emerging markets in Asia, Latin America and Eastern Europe to shape public policy and regulations to foster development of industry for healthy and sustainable products.

NPI: Given a chance to speak to the industry as a whole, what would you want to say?

To remember our roots – to stay focused on bringing products and choices that improve quality of life for people and the planet. It is an exciting and richly rewarding opportunity to pioneer social and environmental change. Let’s remember that it is also a privilege, and approach our work with healthy respect for the impacts we can make across the globe.

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