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Natural Foods Merchandiser

Q&A: Practical tips for selling hemp-derived CBD at retail

Jordan Fink merchandising CBD

Indiana has become ground zero in the tussle over hemp-derived CBD as the state police and attorney general target the ingredient. Yet residents have taken to the product like they have across the country. Where a year ago Adele’s Naturally, based in southwest Indiana, sold maybe 10 boxes in a week, on a Saturday in December, the store sold 150 boxes in a single day. We spoke with Jordan Fink, who is known locally as “Mr. CBD,” about his store’s experience riding the wave.

What merchandising tips can you share with other retailers?

Jordan Fink: First, I look for third-party verification so products can demonstrate that what’s in the bottle is truly in there. Retailers can merchandise hemp-derived CBD in a number of sections. I think of it like probiotics—I have probiotics in our digestion area; I have it in our refrigerated section; I put probiotics in our men’s section, in our women’s section, in our brain section, in our immune section; I cross-market it in every area of our store. With our hemp CBD, it began for us in the adaptogens section. Since then we have moved it right to the front of the store—it’s become the backbone of our store for the time being, so we gave it prominent placement right up front. We have a lot of people who come in and 2 feet into our store is as far as they make it. It fits in joint, brain, immune; we put it everywhere.

We have signage so people can know what hemp is and who the companies are. We’ve been playing with putting up photos of the founders. It’s a conversation starter. All of a sudden they’re interested because we match people with product. This goes for a variety of categories, not just our hemp-derived CBD lines.

Brand-provided literature is important because people like taking stuff home with them whether or not they buy the product. If you have that brand-provided literature with a product logo, and they tell a friend about hemp-derived CBD and it has a brochure with a picture of a product or a brand name, they associate the brand with the product.

Testers work particularly well with topicals because they are easy to test. But also, if you can get samples of capsules, customers want to see how big they are, if they can swallow them, see the consistency and size and all that.

What are the top questions customers ask?

JF: My favorite is, is this that pot oil, wouldn’t it be so much better if it had THC? For certain people, who knows, maybe. I tell them that for a lot of people, full-caffeine coffee is better than caffeine free. For others, it’s the opposite.

The one question we get most often is: Am I going to fail a drug test? My answer has changed several times over the two years we’ve carried this product. My answer now is you can absolutely fail a drug test. There are different drug tests. Everyone is taking different doses. The possibility is absolutely there. Our recommendation is that if a customer is using any kind of hemp-derived CBD or extract, he or she should take the bottle and show it to his doctor, show it to his manager, to HR. If they have a problem with it, a customer shouldn’t use this product.

What advice can you give to other retailers about selling hemp-derived CBD?

JF: Be knowledgeable. If you don’t understand the product and you don’t understand what we’re dealing with is hemp-derived CBD, don’t sell it. This is not a marijuana extract—isn’t that exactly what we’re trying to get away from? Use the tools at your disposal, whether it be literature or signage or education. Use all of it right now. Doing all this, you brand your store and you brand yourself—I’ve embraced my personal brand as the CBD guy. 

Fink recently participated in New Hope Network's free webinar, "CBD in Retail: A Year in Review." Watch the webinar on-demand here.

In Session

Why women and feminine values lead the 'good food' future

how women and feminine values will lead the good food future

"There is something about the collaboration that women bring, and the ability to roll up their sleeves and tackle problems, that can seem pretty audacious. If we can harness that feminine value of collaboration, that will really move us forward and break the status quo."
—Carlotta Mast, New Hope Network

Part 1: Why this conversation is important 

Highlights:

  • Authentic, conscious leadership will help women rise up in the industry. 
  • Focus on growing conscious leadership to build a better model of diversity.  

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Part 2: The value of collaboration 

Highlights:

  • How to harness the feminine value of collaboration. 
  • It's not just about traditional gender values but about holistic values tied to human beings.  
  • Collaboration leads to creative solutions.

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Part 3: The value of vulnerability

Highlights:

  • View vulnerability as authentic and conscious leadership. 
  • "The concept of vulnerability as a strength, as a place where you can connect with people, and those connections make you strong," Robyn O'Brien said. 

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Part 4: Fueling the cultural shift through trust and consciousness 

Highlights:

  • Change the cultural norm and honor the collective. 
  • It's about mission and being part of something bigger than profit.
  • Find a mentor and a support system that's involved in constant learning.

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Part 5: Q&A 

Highlights:

  • The misunderstanding of service vs. enabling.  
  • How to find a mentor in this industry. 

This session—Why Women & Feminine Values Will Lead the Good Food Future—was recorded at Natural Products Expo East 2017. 

[email protected]: A-list investors back Brandless | Report: Chinese dairy company makes bid for Vitamin World

Why Steph Curry, Randi Zuckerberg and Jessica Seinfeld invested in this generic grocery store

More than 20 investors joined in a second tranche of Series B funding for Brandless, which brought the round’s total to $35 million. Participants included two Golden State Warriors players, Weight Watchers CEO Mindy Grossman, bareMinerals founder Leslie Blodgett and more. Brandless sells more than 250 products direct to consumer for $3 each, all of which are non-GMO and about half of which are certified organic. Read more at Fortune…

 

China’s Feihe International to buy Vitamin World: sources

Feihe, a maker of dairy products, will pay $28 million for the supplements retailer, according to unnamed sources cited by Reuters, if a bankruptcy court approves the sale. Vitamin World filed for Chapter 11 bankruptcy in September and has already closed nearly 200 of its stores. Read more at Reuters…

 

Kroger’s culinary efforts seen ramping up in 2018

Kitchen 1883 in Union, Kentucky, opened in November and is Kroger’s first stand-alone restaurant operation. It operates as part of Kroger’s Culinary Innovation Team, which also oversees the Prep + Pared meal kit line and the forthcoming culinary innovation center, which will be used to train chefs and help them share ideas. “We have a real commitment to the meal space,” a Kroger spokeswoman said. Read more at Supermarket News…

 

Odwalla founder finds second life in Califia almond and plant-based beverages

Greg Steltenpohl started Odwalla as a way to fund his jazz band. After that company sold to Coca-Cola, he came across an opportunity to find a new life for the 20 percent of Cuties’ mandarin crop that went to waste because it was undersized or blemished. He started Califia Farms to find a way to use them. That partnership didn’t work out, so he instead turned to almonds, which turned out to be a great move. Read more at Los Angeles Times…

 

Elon Musk’s brother is helping millennials quit their desk jobs and become farmers

The number of farmers age 25 to 34 grew 2.2 percent between 2007 and 2012, according to the USDA data. And Kimbal Musk is doing his part to boost that number even more. His accelerator, Square Roots, helps millennials learn how to farm vertically inside a shipping container in Brooklyn. Read more at CNBC…

Algae makes its way to the aisles

Thinkstock spirulina powder

The following is an excerpt from the NEXT Forecast, an insider’s guide to where the natural products market is now—and where it’s headed. The updated NEXT Forecast for 2018 includes a new section on ingredient trends, and updated market manifestations for 13 macro forces. Learn more here.

Algae is nature’s miraculous aquatic single-cell chemical factory. While barely a blip on the new product development map just four years ago, algae-derived products are finally leaving the spirulina tablet bottle and arriving on store shelves within drinks, cosmetics and dairy. Algae even creates the blue color in M&Ms.

Over the last decade there’s been an explosion of algae research in government, academia and private-sector initiatives. At first algae was seen as a potential biofuel. That hasn’t panned out yet, but beauty lotions and nutritious food add-ins have turned out to be the low-hanging fruit. That’s translated to a fascinating aspect of algae: Producers can tweak the formulation of creating algae industrially to spike different nutritional levels, be it protein, omega-3s or other healthy fats, with decadent textures and enticing taste profiles.

Algae makes its way to the aisles

The following is an excerpt from the NEXT Forecast, an insider’s guide to where the natural products market is now—and where it’s headed. The updated NEXT Forecast for 2018 includes a new section on ingredient trends, and updated market manifestations for 13 macro forces. Learn more here.

Algae is nature’s miraculous aquatic single-cell chemical factory. While barely a blip on the new product development map just four years ago, algae-derived products are finally leaving the spirulina tablet bottle and arriving on store shelves within drinks, cosmetics and dairy. Algae even creates the blue color in M&Ms.

Over the last decade there’s been an explosion of algae research in government, academia and private-sector initiatives. At first algae was seen as a potential biofuel. That hasn’t panned out yet, but beauty lotions and nutritious food add-ins have turned out to be the low-hanging fruit. That’s translated to a fascinating aspect of algae: Producers can tweak the formulation of creating algae industrially to spike different nutritional levels, be it protein, omega-3s or other healthy fats, with decadent textures and enticing taste profiles.

Nutrition Capital Network

Nutrition Capital Network: December 2017 Deal Download

Two major deals this year should add heft to the dietary supplement industry. Global investment firm KKR, one of the biggest names in private equity, completed the acquisition of The Nature’s Bounty Co. (formerly NBTY Inc.) in September. December was the turn of the world’s largest food corporation, as Nestlé announced the purchase of Atrium Innovations, a leading supplement company in the practitioner channel. Nestlé will pay global private equity firm Permira $2.3 billion in cash for Atrium, which is expected to generate sales approaching $700 million in 2017 through practitioner and retail channels.

The move supports Nestlé’s pursuit of growth opportunities in consumer health care to complement the company’s focus on high-growth food and beverage categories, Nestlé officials said. Atrium will become an independent operating division of Nestlé Health Science, which houses nutritional shakes and soups, diet replacements and medical foods.

The Nestlé deal reframes supplements as food rather than pills—spearheaded by Atrium’s largest and most profitable brand Garden of Life whole food supplements—at a time when pharmaceutical giants Pfizer and Merck are exploring sale of their consumer health care businesses, which feature the Centrum and Seven Seas supplement brands, respectively. Other Atrium brands include Pure Encapsulations and Douglas Laboratories. Nutrition Business Journal pegged consumer sales of supplements through the practitioner channel at $3.7 billion in 2016 on 7.8 percent growth, faster than the supplement industry at large and led by Atrium Innovations, Metagenics and Standard Process.

NCN members offer perspective on the Nestlé-Atrium deal.

In nutritional science

Lumen Bioscience raised $13 million in new capital. The synthetic biology company uses spirulina (blue-green algae) as a platform for making high-value proteins and other molecules for foods, cosmetics and medicine. The round includes a Series A investment totaling $11.2 million and a $1.8 million grant from the U.S. Department of Energy. “For years, demand has grown for natural alternatives to food and cosmetics with artificial colors made from petroleum and coal tar, which many believe to be unhealthy. But high cost and variable quality have held back natural colors from being widely adopted,” said Brian Finrow, Lumen’s chief executive officer and co-founder. Lumen’s first product is a natural blue colorant for high purity applications in food and cosmetics. The market for natural colorants is worth $1.5 billion, according to data cited by the company.

Arzeda (Seattle), a company using computational and synthetic biology to create new enzymes and proteins closed a $15.2 million Series A round. New investors include Universal Materials Incubator and Casdin Capital, which join Series A lead investor OS Fund. Arzeda says it has already developed proteins for global manufacturers to reduce the cost of producing high-value food ingredients; improve crop yield and resilience; and increase the performance and sustainability of advanced polymers.

DuPont Nutrition & Health announced a Microbiome Venture to engage in strategic partnerships focused on health and wellness. The first major partnership will be with the APC Microbiome Institute in Cork, Ireland, related to maternal and infant microbiomes, which play a critical role in infant development and long-term health. DuPont said the Microbiome Venture would play a key role in its business growth strategy.

Plant-based products

Plant-based proteins saw two deals in branded food: Tyson Foods Inc. participated in a $55 million financing round for Beyond Meat, increasing its ownership stake from the 5 percent established a year ago. This round was led by Cleveland Avenue LLC, the venture capital firm founded by Don Thompson, former chief executive of McDonald's Corporation, and will be used to more than triple the size of Beyond Meat’s production footprint.

Canadian consumer packaged meat company Maple Leaf Foods is to acquire Field Roast Grain Meat Co. for $120 million. Field Roast is a brand of premium grain-based meat substitutes and vegan cheese products, with sales of approximately $38 million. Field Roast complements Maple Leaf’s early 2017 acquisition of Lightlife Foods, a veteran brand of refrigerated plant-based foods, for $140 million from Brynwood Partners.

Snacking deals

Two major food companies seeking growth in the snack category announced big deals in better-for-you brands. The Hershey Co. agreed to acquire Amplify Snack Brands Inc. in a transaction valued at approximately $1.6 billion, including debt. The deal represents a multiple of approximately 14.8-times 2017 adjusted EBITDA, Hershey said. Founded in 2014, Amplify brands are led by SkinnyPop popcorn, Oatmega whey protein bars, Paqui corn chips, and Tyrrell’s potato chips. “The acquisition of Amplify… is an important step in our journey to becoming an innovative snacking powerhouse,” said Michele Buck, Hershey president and chief executive officer. TA Associates is Amplify’s largest shareholder.

Campbell Soup Co. agreed to acquire Snyder’s-Lance for $4.87 billion. Snyder’s-Lance reported $2.2 billion in net sales for the trailing 12 months ended Sept. 30, 2017, and the purchase price represents a premium of approximately 27 percent to Snyder’s-Lance’s closing stock price on Dec. 13, 2017. Brands include Late July organic chips and crackers, Emerald nuts, Cape Cod non-GMO chips, EatSmart veggie crisps and Kettle chips.

Also in snacks, Mars Inc. and Kind LLC announced a strategic partnership wherein Mars would take a minority stake in the whole foods bar maker. Kind will provide Mars with “a pioneering and trusted brand to anchor a newly formed global health and wellness platform,” while Mars will provide Kind with its “proven international model to expand into new markets,” Kind said in a statement. Mars will lead growth of the business outside the United States and Canada.

More food and beverage deals

In branded food and beverages, NadaMoo!, a dairy-free frozen dessert company, closed a $4 million funding round with InvestEco Capital. NadaMoo! is made with organic coconut milk. Other investors in the round include District Ventures and Working Lab Capital. According to Future Market Insights, the global market for plant-based ice cream will reach $1 billion by the end of 2017, spurred by consumers who are lactose intolerant and demand for healthier ice cream alternatives generally.

Danone Manifesto Ventures announced a minority stake in bottled water company Kona Deep, participating in a $5.5 million financing alongside Grand Crossing Capital and local Hawaiian investors. Kona Deep offers the benefits of “naturally occurring deep ocean electrolytes,” Danone said. Waters are one of Danone’s four business lines, generating €4.6 billion in 2016 with growth close to 3 percent from sales of Evian, Volvic and other brands.

Pet deal news

Illustrating that a growing number of consumers believe “pets are people too” and are forecast to spend accordingly, Fuzzy Pet Health successfully closed a $4.5 million seed round co-led by Eniac Ventures and Crosscut Ventures. Subscribers to Fuzzy Pet can chat with vets in real time, request diagnoses and prescriptions, and get recommendations for products and services based on their pets’ lifestyle. The recently added Fuzzy Plus program focuses on curative care and diagnostic services like in-home cold laser therapy for pain and inflammation.

Meanwhile, The Riverside Co. sold Outward Hound to J.W. Childs. Outward Hound designs and distributes interactive pet toys, in addition to pet accessories such as travel gear. Outward Hound was a Riverside portfolio company for four years, during which time add-on acquisitions included Petstages, Dublin Dog, Bionic Pet Products and Zoo Active. Founder Kyle Hansen will retain a significant stake in the business.

Personal care deal news

In natural personal care—typically one of the less active segments covered by the NCN Transaction Database—three deals were recorded this past month, led by Unilever’s acquisition of Sundial Brands, a natural hair and skin care manufacturer with 2017 sales of approximately $240 million. A champion of “inclusive beauty” that addresses skin and hair care issues traditionally ignored by mass market companies, Sundial’s approach complements the Unilever Sustainable Living Plan “to accelerate growth while increasing positive social impact,” Unilever said. Earlier in the year, Unilever Ventures secured a minority stake in the natural skin care brand True Botanicals.

Prose, a maker of fresh and custom-made hair care products, announced a $5.2 million Series A round led by Forerunner Ventures, bringing total funding to $7 million. Founded by former L’Oréal and Phyto executives, Prose says it has sourced 76 natural ingredients and developed a proprietary algorithm to create custom-made formulas that are cruelty-free, non-toxic and free of sulfates, parabens, dyes, phthalates and GMOs. The brand was founded “to fix diversion, in which mass-produced hair care systems labeling themselves as professional-grade are being sold everywhere from Amazon to Costco, bypassing professionals.” Consumers begin with a consultation with their stylist, or online with a Prose professional.

Encore Consumer Capital sold MyChelle Natural Skin Care to French Transit LLC, the marketer and distributor of Crystal natural deodorant. MyChelle is sold through natural retail and direct-to-consumer channels and is Encore’s second exit in the beauty industry following the 2014 sale of Tarte Inc.

Other deals

In contract manufacturing, Nellson Nutraceutical LLC, which makes branded and private label nutritional bars and functional powders, acquired Genysis Brand Solutions Inc. The acquisition replicates in powders what Nellson achieved in bars three years ago by acquiring Le Groupe Multibar Inc. in Canada and creating “a clear category leader,” said Nellson Chief Executive Officer Jamie Better.

In ingredients, Lakeview Equity invested in NutriScience Innovations LLC, a cGMP-certified global supplier of nutritional and functional ingredients, including branded and natural and organic ingredients. Lakeview Equity acquired the probiotics developer and manufacturer UAS Labs in 2013.

In retail, Target Corp. agreed to acquire Shipt Inc., an online grocery delivery service, for $550 million. Analysts see the move as a response to Amazon’s same-day delivery strategy, which the online giant recently expanded.

McKesson Canada, a supply chain and health care services company, acquired Well.ca, strengthening the online commerce capabilities of McKesson Canada’s retail assets, including Rexall Drug Store.

Nutritional supplement retailer Vitamin World, which filed for bankruptcy protection in September, received a $26 million cash offer from Latium Enterprises in December to purchase its remaining 150 stores, Newsday reported. Centre Lane Partners acquired Vitamin World from NBTY (now The Nature’s Bounty Co.) in 2016 for about $25 million to operate as a standalone retail business. Nature’s Bounty sold the Holland & Barrett retail chain in the UK to L1 Retail for about £1.8 billion earlier this year.

In technology (apps, delivery, devices, software, and ecommerce), Health IQ, which brokers life insurance for health-conscious people like cyclists, runners and vegans, announced $34.6 million Series C. Also BV Investment Partners announced a strategic investment in Precision Nutritio, a provider of nutrition certification and coaching software and services. And Farmers Business Network, a digital farmer-to-farmer network, announced a $110 million Series D funding round to expand its crop marketing, direct purchasing, and farm analytics services.

The Hain Celestial Group Inc. (Lake Success, N.Y.) acquired Clarks UK Ltd., a producer of natural sweeteners including maple syrup, honey, carob, date and agave. Clarks generated approximately £7 million in net sales in 2016 and is regarded as a strategic fit with the Hain Daniels spreads business “as consumers continue to seek to reduce their sugar intake and look for better-for-you alternatives to refined sugar."

Arca Continental, the second largest Coca-Cola bottler in Latin America, acquired Deep River Snacks, a maker of better-for-you snacks with annual sales of approximately $45 million.

Red Monkey Foods, a portfolio company of San Francisco Equity Partners, has acquired San Francisco Salt Co. from founder Lee Williamson.

The Barilla Group, the Italian pasta and bakery giant, has launched a venture capital fund and innovation hub called Blu1877, according to an article posted on Barilla’s website.

 

NCN presenter update

FireRein Inc. (Napanee, Ontario) received an investment from Bioindustrial Innovation Canada. FireRein makes Eco-Gel, a 100 percent bio-sourced, food-grade water additive that when introduced into fire hose water streams provides enhanced fire suppression while solving the toxicity issues associated with traditional additives. FireRein was a presenting company at Nutrition Capital Network’s (NCN) first meeting in Canada in June 2017, hosted by NCN and Natural Products Canada (NPC). NPC has also invested in FireRein.

 

NCN events

Nutrition Capital Network is now accepting applications for all NCN Investor Meetings in 2018 from companies interested in presenting business plans to an audience of qualified investors. Visit nutritioncapital.com to apply online. Meetings in 2018:

  • NCN XXII: Spring Investor Meeting, May 9-10, 2018, New York.
  • NCN Europe V, May 14, 2018, Geneva, Switzerland.
  • NCN Canada II, June 27-28, 2018, Toronto, Canada.
  • NCN XXIII: Fall Investor Meeting, October 2018, San Francisco.
  • NCN Investor Meeting X at SupplySide West, Nov. 7, 2018, Las Vegas.

Nutrition Capital Network, an organization that connects investors with high-potential growth companies in the nutrition and health and wellness industry, added 460 companies to its Nutrition and Health & Wellness Industry Deal Flow Database in 2017, bringing the 10-year total to 3,100 companies. More than 400 investors (including 46 NCN Cornerstone Investors) attended NCN investor meetings in 2017 and were introduced to 89 presenting companies selected from the applicant pool.

Get the monthly Nutrition Capital Network News direct to your inbox. Register below.

Nutrition Capital Network

Nutrition Capital Network members comment on the Nestlé-Atrium deal

nestle atrium innovations acquisition

Nestle is making a big leap into the supplement space with its announced purchase of Atrium Innovations, owner of natural-channel leader Garden of Life and a number of practitioner brands. We asked members of the Nutrition Capital Network to respond.

Greg Horn

CEO of Specialty Nutrition Consulting Inc.
NCN principal and chairman of the NCN Selection Committee

"The Nestlé-Atrium deal is a bellwether event and the strongest validator yet that healthier solutions have moved from alternative to mainstream. It is significant that the deal was done through Nestlé Health Sciences—that name says it all. As former CEO of Atrium’s crown jewel Garden of Life, it is rewarding to see the strong vision of that company goal to 'Empower Extraordinary Health' is now with a multinational owner that brings scale and resources to accelerate its adoption worldwide."

 

Steve Allen

Co-founder of Nutrition Capital Network
Former vice president of New Business for Nestlé USA

"It’s a great exit for the PE firm, and though the checks won’t quite make it into Santa’s mailbag, they will be worth waiting for. Nestlé has little to no experience in running VMS businesses. Consumer behavior is very different than for products like Boost or Nutren. There will be enormous pressure on Nestlé Health Sciences to deliver the growth needed to justify the rich purchase price and enter the list of billionaire brands so prized by the corporation. Retaining the Atrium management team who understand the channels and the VMS consumer will be a key to making this bold acquisition work. It may also trigger M&A activity for other VMS assets that are reported to be available."

 

John Parton

Adviser Trovita Health Science
Member of the NCN Selection Committee

"Nestlé has decided to head into the consumer health care space, which is a logical progression, especially when other parts of your portfolio are no longer performing as robustly, and activist investors on the fringes are looking for more change. I would hope the deal adds weight and credibility to the dietary supplement segment, given the emphasis on science not only by Atrium Innovations but also Nestlé, Nestlé Health Sciences and Nestlé Research Center. My question is: How much further can Nestlé go into consumer health care? This deal may well be the tip of the iceberg. Nestle will need to ascertain very quickly what’s really driving sales and warranting that multiplier, and focus on the key brands. Retaining the talent that has driven Atrium to its present sales will be key—encapsulating the magic that has delivered this deal—as will assessing the strength of Atrium’s innovation pipeline, filling in gaps and disposing of the tail that undoubtedly will be within the bundle. Nestlé can carve out considerable share in what is still a highly fragmented supplement market, provided that they stay true to their growth drivers (active aging, reducing health care costs, capturing new channels, etc.), and provided that what they say on the pot, sachet, pill, capsule bottle or pouch can be proven to consumers in terms of science."

 

Chris Humberstone

Founder of Humberstone International Inc.
Member of the NCN Selection Committee

"At the heart of the strategy for Nestlé is the need to move in the same direction as their customers—that is, toward healthy, organic food. Specifically, with Atrium Innovations, Nestlé is getting closer to customers who believe health comes from the food we eat—and the cleaner, more organic and non-GMO, etc. the food is, the better it is for health. These consumers are taking supplements to be proactive in staying or getting healthy, and I believe this will be a broad direction for Nestlé in the future. Will Nestlé become a consumer health care company? Perhaps that is too far to stretch at this point, but the Atrium acquisition is a big step in that direction."

 

Lauren S. Clardy

Founder and President of NutriMarketing Group
Member of the NCN Selection Committee

"I was quite pleased and frankly not surprised by Nestlé’s acquisition of Atrium Innovations. Given Nestlé’s investments in the medical food market a few years back with Pamlab and Seres Therapeutics, etc., it’s a natural progression for Nestlé to enter the CPG supplement market. Nestlé sees the future: the aging population and the convergence of functional foods with therapeutic nutrition. This is illustrated by Nestlé Health Science’s commitment to the FODMAP platform. For the supplement industry, this deal creates a formidable competitor for both medical food and CAM market brands. Overall, it’s a good fit for both companies, and the vertical integration of Atrium is a 'value add.' What does it say about Nestlé? It illustrates its commitment to and blue-sky vision for nutrition, health and wellness. Furthermore, the acquisition of Atrium allows the opportunity to step into a market-maker position in the CPG space for dietary supplements, both in the CAM and specialty markets."

[email protected]: New legislation would boost budget for organic regulation | U.S. ranks low in food sustainability

Thinkstock organic milk supply

Organic food fraud leads Congress to weigh bill doubling USDA oversight

After a year in which numerous reports called to question the authenticity of some products labeled as organic, Rep. John J. Faso (R-NY) and 33 cosponsors introduced bipartisan legislation in Congress that would nearly double USDA’s budget for its oversight of the organic program. The bill would gradually increase the funding that’s available to regulators over the next five years to manage the National Organic Program. It also calls for modernization of the technology that USDA uses to track imports of organic food. Read more at The Washington Post…

 

Why the US food system ranks poorly in the 2017 Food Sustainability Index

The Economist Intelligence Unit and the Barilla Center for Food & Nutrition released their 2017 Food Sustainability Index, which ranks countries based on sustainable agriculture, nutritional challenges and food loss. This year, the U.S. placed 21st out of 34, dragged down by high greenhouse gas emissions and high consumption of meat, saturated fat and sugar. Top-ranked countries include France, Japan and Germany. A bit of good news, though—the U.S. ranked ninth in food loss and waste. Despite some of the highest end-level user food waste levels in the world, the U.S. scored high marks for a commitment to halving food waste by 2030 and a relatively low rate of lost food as a portion of total food production. Read more at Huffington Post…

 

General Mills second-quarter sales beat, boosts full-year organic sales view

General Mills beat Wall Street’s expectations in the second quarter, thanks to a focused effort on re-invigorating its cereal business and strong demand for Nature Valley granola bars. Its revenue climbed 2 percent, but gross margins fell 2.6 percent. For the year, General Mills expects organic sales growth to be flat or down 1 percent. Read more at CNBC…

 

Could Pepsi buy Hain Celestial?

A number of potential suitors are reportedly interested in exploring an acquisition of Hain Celestial. As perhaps the largest remaining independent natural food company, Hain could be a logical target for Big Food companies as they try to build their natural and organic portfolios. Read more at The Street…

 

Greek yogurt waste could be used in jet fuel and livestock feed

Liquid whey, a byproduct that remains after protein has been strained from milk, could feed bacteria that would turn it into bio-oil, according to Cornell University researchers. They published a study in Joule, a sister journal to Cell, detailing how the waste could be recovered to fuel a more circular economy. Read more at Newsweek…

In Session

Impress investors with a responsible supply chain and mitigated risks

Thinkstock palm oil plantation

“What types of these risks you have exposure to is dependent on a wide variety of factors: what you’re sourcing, where you’re sourcing it from, how you get it to your production facility, how you get it to your consumer, and how the different people and landscapes and ecosystems involved in that process are affected along the way.”
—Meredith Reisfield, NSF Sustainability

Part 1: The push for responsible sourcing

Highlights:

  • The three main drivers for sustainability are employees, consumers and investors.
  • Companies are increasingly attuned to environmental and social risks.
  • Consumer expectations are evolving toward demand for more sustainable brands.
  • How does all this impact natural product companies?

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Part 2: How do investors value certification of supply chains?

Highlights:

  • What is Climate Advisers?
  • Eight key risk management tools.
  • Examples of corporation dollar losses by risk. 

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Part 3: Audience Q&A—Part 1

Highlights:

  • Where would a company start to deal with potential responsible sourcing and sustainability risks?
  • How do companies make money mitigating risks?
  • How do you measure risk in terms of financial modeling?
  • How can companies that are contributing to reforestation factor in valuation? Is there way to measure?

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Part 4: Audience Q&A—Part 2

  • How do you financially differentiate between social responsibility and environmental responsibility?
  • “Regardless if you’re dealing with a social issue, a deforestation issue or a water issue, if you don’t know what your risk areas are and what they might look like relative to one another, and if you don’t know where your ingredients are coming from, you’re going to be in a very difficult position regardless. In every case, that’s the first step towards addressing these issues,” Meredith Reisfield said.
  • Do you see companies that buy from providers that are not sustainable covering up negative news coverage for PR reasons? Is this a hurdle for achieving responsible supply chain?
  • What other areas stand out as high risk?
  • Recommended tools to measure your carbon footprint.

This session—Managing Investor Expectations & Risk: How to Establish a Responsible Supply Chain—was recorded at Natural Products Expo East 2017. Click "download" to access the presentation slides. 

Kroger offers advice for joining its We Are Local program

Kroger store

Kroger vice president of natural foods Jill McIntosh has one main tip for brands that want to take advantage of its new We Are Local program, meant to boost the presence of local manufacturers in its stores around the country: healthy and innovative.

“We’re looking for better-for-you products with clean ingredients,” she said, with the hottest categories being beverages, snacks and fitness. Products with any of the certifications that indicate a degree of sustainability or clean ingredients, from organic to fair trade to recycled packaging, should make those known as well. “We don’t have a list of priorities as far as attributes. We’re just welcoming new innovation, we’re welcoming local partners.” 

She adds that they’re always looking to partner with “diversifiers,” including women-owned and minority-owned businesses.

Kroger has long had a reputation as a natural leader in the mainstream channel, and is upping its game with a recently launched program designed to identify promising local brands. The program can potentially help those brands manage early-stage growing pains, while capturing consumers who are always looking for the next best healthy thing.

The retailer hosted its first Natural Foods Innovation Summit in the fall, and plans to continue them several times a year, with the next one scheduled for February 8. Those are invitation-only, but the retailer’s We Are Local program invites brands to submit products anytime. Once submitted, product categories are routed to the appropriate merchandising leader to review.

With snacks and beverages in particular, consumers can’t seem to get enough—there seems to be endless demand for healthy items people can squeeze in between meals, especially as more people move away from the traditional routine of three large meals a day. The trends that are doing well in snacks industry-wide are holding up in Kroger as well, such as puff snacks, plant-based recipes and products with probiotics.

One thing a brand doesn’t need to worry about is production capacity—if the product is a good fit for Kroger customers, the retailer will partner with you on a local basis, and also on scaling up if and when necessary. “The last thing we want to do is push someone beyond their limits and then have a product be out of stock for customers at the store,” said McIntosh. 

Kroger also helps customers find natural products within its stores, drawing their attention using signage and other navigation tools. So while packaging and labels are important, what matters in the end is the product itself.

McIntosh noted that Kroger will have a bigger presence than ever at Natural Products Expo West 2018, where it will invite new vendors to do a Shark Tank-like pitch and also be focusing on its goals of zero hunger and zero waste.

Bottom line, she said, for any of the avenues brands want to use to connect with Kroger: “It needs to be true innovation that’s going to excite our customer.”