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Articles from 2019 In June


NBJ

NBJ Growth Award winners: Charlotte's Web, Ritual, M2 Ingredients/OM

Ritual, Charlotte's Web and M2 Ingredients logos

In today’s consumer products marketplace, quality and transparency reign supreme. Now more than ever, consumers are choosing brands that deliver top-tier products and are open and honest about their processes from seed to shelf. Such emerging demands make it no surprise that the three 2018 NBJ Award winners for growth demonstrate a steadfast commitment to both of these characteristics.

Pioneering hemp CBD company Charlotte’s Web takes home the Large Company Growth Award, having notched 74 percent revenue growth in 2018 to hit $70 million. On August 29 of last year, the company went public, completing a $115 million IPO on the Canadian exchange.

The Medium Company Growth Award goes to Ritual, the category-disrupting,
Instagrammable multivitamin brand that has raised over $40 million from venture capital and sold more than 1 million bottles since its October 2016 launch.

Finally, M2 Ingredients, more well known by its finished-products brand Om Mushroom Superfoods, earns the Small Company Growth Award, reserved for companies under $10 million in revenue, after a stellar year of new product launches and expanded distribution.

These three companies’ high-quality products and transparent practices have earned them consumers’ trust and dollars, translating to incredible sales growth and exemplifying all that our industry stands for. 

Large Company Growth: Charlotte’s Web

Though the Boulder, Colorado-based company officially launched in December 2013, the seven brothers behind Charlotte’s Web had been growing cannabis for medicinal purposes since 2008. Firmly believing in the therapeutic value of nonintoxicating cannabidiol (CBD), the Stanleys bred hemp specifically for low-THC, high-CBD content, although they didn’t have a market for it at the time.

Then in 2012, the brothers met Paige Figi, who desperately wanted CBD to help control her daughter Charlotte’s seizures. The Stanleys gave their oil to Paige, who added it to Charlotte’s food, and before long, the 5-year-old’s seizures had subsided significantly. This stunning story caught the attention of CNN Chief Medical Correspondent Sanjay Gupta, M.D., who broadcasted it to the nation in August 2013, officially giving medicinal cannabis his stamp of approval. Soon Charlotte’s Web had a waiting list of thousands looking to access its CBD oil for their health needs.

“We’d been operating under the medical marijuana framework, which made scaling to meet demand impossible, so it was fortuitous that the hemp pilot program opened in February 2014,” says Joel Stanley, company chairman. “We went from small greenhouses to having the first hemp planted and grown how it should be, more like corn or wheat. Our first harvest in fall 2014 ended our huge waiting list.”

However, the federal regulatory environment surrounding hemp and CBD remained murky, making it a “scary time” to do business, says Stanley. The brothers persisted, selling their CBD oil direct to consumers online. “In the early days, the only retailers open to this were boutiques. It was difficult to get even small chains to buy-in, based on the regulatory uncertainty,” Stanley says. “This changed dramatically with the passage of the Farm Bill in December 2018.”

Now, Charlotte’s Web products are found in 6,000 retail outlets nationwide, and it is the number-one brand by market share. Ecommerce sales have also continued to thrive, jumping 57 percent in 2018. The company was able to fill all these orders by boosting its hemp production from 63,000 pounds in 2017 to 675,000 pounds in 2018, enabled by a shifting federal stance that allowed for expanded hemp production in the Farm Bill.   

“For our company and the entire industry, we are grateful for the way things evolved,” Stanley says. “We had to invent new wheels on how to plant and harvest in ways to maximize quality, which took a lot of time and hard work. Truth is, if we were accepted right off the bat, it would’ve taken a long time for us to meet demand. It was painful to live in a grey regulatory environment, but it protected our scalability, and that of other companies, and allowed the industry to get its feet under itself.”

Now that CBD’s popularity has exploded, Charlotte’s Web is facing ever more competition, as new brands enter this market in rapid fire. This is where the company’s high-quality products, vertically integrated model, commitment to sustainable agricultural processes and transparency stand out. 

“In a couple of words, our differentiators are quality and consistency,” Stanley says. “We use the same genetics every time, meaning we get the exact same phytochemical signature in every batch. Many people don’t understand the importance of this, but it means that when our product works for you, you can come back to it three years later and have the same experience. We hope to see this level of standardization come to the hemp industry.”

Charlotte’s Web also goes to great lengths to test its products to ensure safety, purity and consistency. “We’re not the only CBD company with good quality control, but anytime an industry grows this fast, there will be some real fly-by-night operations,” Stanley says.

To support its continued growth—2019 sales are projected to hit between $120 million and $170 million, up from $70 million in 2018—Charlotte’s Web has made several recent key hires. In April, Deanie Elsner, former president of Kellogg Co.’s U.S. snacks division and a 20-year Kraft Foods veteran, came on board as CEO. Before that, pharma industry vet Stephen Lermer became chief operating officer, and Eugenio Mendez, formerly of the Coca-Cola Co., was named chief growth officer.

The plan, says Stanley, is to take the brand global, but there is still immense growth potential in the U.S. market. Charlotte’s Web recently launched a pet line and will continue to develop edibles and expand existing lines. “Another thing that differentiates us is we are not set on having 50 different SKUs,” Stanley says. “We focus on creating the very best product for a category, and until we get it just right, we don’t release it.”

Medium Company Growth: Ritual

The stodgy multivitamin was in dire need of a makeover. Venture capitalist Katerina Schneider discovered this a few years back when she couldn’t find a prenatal multi that suited her needs.

“I have always been obsessed with health, but my obsession became heightened when I got pregnant,” Schneider says. “I began questioning whatever I put in and on my body and realized there were no good prenatal vitamins out there that were backed by science and also clean. Also, at that time, there was a wave around traceability in the food industry, but when I tried to dig deeper into the supplements industry, I couldn’t find any information. So, I decided to build the product and company that I wanted to see in the world.”

That company is Ritual, the fast-rising direct-to-consumer brand that has shaken up the multivitamin category with its subscription-based model, social media savvy, unique product offerings and high level of transparency and traceability. To build her brand, Schneider hired a team of top scientists and leveraged her connections in the investment world to raise the $40 million-plus.

Ritual’s two products—Essential for Women and Essential Prenatal—differ from conventional multis in several ways. For one, they contain only nine and 12 active ingredients, respectively. “Most multivitamins have 20 to 40 ingredients, many of which we already get from diet,” Schneider says. “People think more is more when it comes to nutrition, but we believe in less is more—and only what is evidence based. We’d rather give women fewer ingredients and give them higher-quality forms of those ingredients than just throw in a bunch of generic nutrients that may be overkill.” For example, rather than folic acid, which many women are unable to metabolize, Ritual uses a more readily usable methylated folate from Italy.

Another unique offering, Ritual’s website details where every single ingredient comes from. It also features interviews with suppliers and scientists and highlights the research supporting each nutrient—a level of transparency not commonly seen. These multis look different as well. The capsules are clear and filled with tiny nutrient-containing beadlets, a sleek design that serves as a tangible symbol of transparency. That look helped the brand go viral. “Our customers have become our greatest marketers,” Schneider says. “Our product is so visually appealing that they are sharing it on Instagram.”

The subscription model, too, is novel. Along with ensuring repeat business by reinforcing healthy habits, it enables Ritual to source high-quality ingredients that might be cost-prohibitive for retail brands. “By not being in retail, by shipping directly to consumers and by not holding onto too much inventory, our bottles cost $30 a month,” Schneider says. “If you were to cobble together all of the ingredients, it would cost $200.”

Taking the retailer out of the equation also allows Ritual to “meet consumers where they are,” says Schneider. “It is tough to have those deeper connections with customers through retail, but since a lot of our customers are on social media, we can have back-and-forth conversations with them there. And by having our scientific team next to our design team next to our customer experience team, we can respond thoughtfully to every single comment that comes our way.”

Next up, Ritual will expand its product line to attract even more consumers. “We’ve put a stake in the ground in women’s health,” Schneider says. “Our vision is simplifying things for her. We know her needs change as she goes through different life stages, so we are building a single evidence-based multivitamin for her for every stage. In the future, we will focus on postnatal and post-menopause to complete the circle.” 

Small Company Growth: M2 Ingredients & Om Mushroom Superfoods

Until recently, very few consumers realized mushrooms had any value beyond the culinary or hallucinogenic. Although medicinal species such as cordyceps, chaga, reishi and turkey tail were staples of traditional Chinese medicine, they remained extremely niche in the U.S.

“Eight years ago, if you went into a natural products store, not everyone working was familiar with individual species,” says Sandra Carter, Ph.D., founder and chief science innovation officer of M2 Ingredients and Om Mushroom Superfoods. “Now I’ll be in an Uber, and the driver will say, ‘Oh, lion’s mane! I take it every day, and so does my grandma.’”

This heightened awareness stems from a massive education push driven by the Om team, along with renowned mycologist Paul Stamets. “Very similar to what we’re seeing with hemp, consumers are now discovering that there are functional benefits to mushrooms,” says Mike Fata, founder of Manitoba Harvest Hemp Foods and chairman of Om’s board of directors. “Om has done a great job of educating consumers and making it easier for them to enjoy the benefits of mushrooms with its capsules, drink sticks and powders.”

Bringing mushrooms to the masses has been Om’s goal since the beginning. About a decade ago, Carter, who had a background in preventative medicine, met another esteemed mycologist, Steve Farrar, at an integrative medicine conference. “When I met Steve, I became fascinated with mushrooms and how individual species had applications for so many areas, from cognitive health to sports performance to immune health,” Carter says. “We saw an immense market opportunity for mushrooms.”

In 2010, Carter and Farrar teamed up to launch their company, originally named Mushroom Matrix. From the get-go, they were vertically integrated, growing their own mushrooms organically in Carlsbad, California, whereas many competitors source their mushrooms from not-always-transparent producers in China. Further differentiating Om, Carter and Farrar knew that the greatest medicinal value came from the mushroom’s mycelium, the long, stringy part that’s embedded into the log or grass and therefore remains unseen.

“The mycelium must have a robust immune system to last for a long time and a robust enzymatic system to digest nutrients from the environment—and not much of this is present in the fruit body stage,” Farrar explains. “Only recently, with the advent of tissue culturing, can we plant mushrooms into a nutritional substrate that can really capture the mycelium stages.”

By 2012, Om was offering a range of mushroom superfood powders and drink sticks and also selling its raw ingredients to other finished-product companies. But Carter says the business really took off in 2013 and 2014, leading the company to build a second facility and court private-equity investment to expand the management team.

In February 2018, CPG veteran Jan Hall joined as CEO, and last year Om launched several new blends targeting specific health needs. In May 2019, Om announced a partnership with For the Biome, the new wellness company of New Chapter founder Paul Schulick, to launch two topical skincare products made with Om Mushroom Superfood.

“A number of things attracted me to Om, including their quality standards and the fact that they are vertically integrated and do all their own manufacturing,” Fata says. “Being able to tell the whole story of the mushrooms and deliver the highest quality products because they control the supply chain is unique. Now Jan has a clear focus on growth through expanding distribution, educating consumers, helping retail partners increase turns on shelf and creating more innovative products to make it easier for consumers to add mushrooms to their daily routine.”

NBJ

Roy Upton receives NBJ Efforts on Behalf of Industry Award

Roy Upton

It was not the herbs that drew Roy Upton to the lore of natural medicine in the cookshack at the Meta Tantay community in rural Nevada. It wasn’t an ailment or need that brought him to the herbal arts.

It was the smell. He remembers the pot steeping on the stove in the intentional community, each night a different herb steeped to a tea, each night a different flavor.

But of course, he did not follow a smell to rural Nevada in 1981. “I was a city boy,” Upton recalls. “I didn’t know anything about herbs.” He was drawn first by an interest in Native American philosophy and, in particular, the teachings of Rolling Thunder, the shamanic voice who shared his wisdom from Meta Tantay. Upton had read of that wisdom, and “it touched me in a way that was very deep.”

But the smell and then the herbs and then the still-arcane knowledge of herbalism brought him to the path that, nearly 4 decades later, earns him the NBJ Award for Efforts on Behalf of Industry.

Following the passion

It would be another 14 years after sensing the power and the science on the Meta Tantay stovetop before he made his greatest contribution to the supplement industry with the founding of the American Herbal Pharmacopeia. In the years between, he became a student of herbs, first the learnings of the Native Americans, then herbal arts of Europe, Traditional Chinese Medicine and finally the Ayurvedic arts.

One thing followed another, and he recalls every step as obvious. “It was just the drive. That’s it. Period,” Upton says.

He was convinced enough of the power of herbalism to become a tireless activist for the passage of  DSHEA 25 years ago, working with people now considered pioneers of the supplement industry. “I really focused for three, almost four, years, doing nothing but stimulating grassroots support,” Upton says.

But among his travels, study and activism, he also saw what was missing. The United States Pharmacopeia was founded in 1820 on the need to standardize herbs. That was mainstream medicine 200 years ago. In the years since, herbs dropped out of USP’s focus as medicine pivoted toward chemical compounds and what we know now as the industrial pharmaceutical complex. Standards and monographs for herbs in the United States did not exist in the form Upton knew was needed.

It was another in that series of obvious steps. Something needed to be done, and he did it.

“All these questions were coming up for both sides. And you know, I was able to address them really well, because I knew the literature. But it made me realize that there wasn’t one place for this information to exist.”

So he built one.

An unquestioned calling

American Herbal Products Association President Michael McGuffin calls out that roll-up-the-sleeves manner as one of Upton’s most remarkable qualities. Anybody else might have been intimidated by the depth of need that an American Herbal Pharmacopeia would address. Upton just did it. “He recognized that there were significant gaps in providing the level of information that’s expected of pharmacopeia monograms and, on his own initiative, he has worked to fill those gaps,” McGuffin says. “He made it his life’s work

That contribution has been an enormous gift to the industry, one that McGuffin wishes was better recognized. “There are pockets of the industry that do. But no, not very broadly,” McGuffin says.

American Botanical Council Executive Director Mark Blumenthal agrees. From Blumenthal’s perspective, Upton has provided some of the highest quality work on herbs produced anywhere. “The researchers, the health professionals and the consumers using those products, everyone’s benefiting from the work that he’s doing,” says Blumenthal, who describes Upton as “a tireless worker” and “a true believer.”

Upton calls the excellence that Blumenthal ascribes to AHP monographs as yet another example of a need that required an action. It must be done right. So it gets done right. Upton has no advanced degree or formal scientific resume to wave. He has instead a deep commitment. The simplicity of that sentiment doesn’t make it any easier. Upton calls himself a better researcher than business development whiz and says AHP still struggles to raise money. Like McGuffin and Blumenthal, Upton says he wishes the industry was more supportive “We can either do the work or we can do the fundraising full time, but we can’t do both.”

Changing challenges

The support is necessary. The herbs and botanicals category is not short on challenges. Chief among them is adulteration ,and Upton says he believes the tried and true monograph system is a better answer than the next-big-technology fever that brings in DNA testing and other techniques he considers unnecessary and unwise. “There’s an answer to those challenges. And the answer is a monograph system,” Upton says. All the technology in the world is no good, he explains, if it “doesn’t train the people in the lab to know how to test.”

He is also disappointed in how the herbalism profession has resisted licensing regimens with state governments that would allow the practitioners to present themselves as legitimate to consumers who still harbor doubts, no matter how far into the mainstream herbalism gains interest.

Still, Upton describes himself as encouraged and enthusiastic. Herbalism was largely unknown in the mainstream when he began his journey. Now there are integrative medicine programs in major medical schools, and understanding and acceptance is exponentially more common than it was 38 years ago in that Nevada cookshack. People don’t have to be drawn by the scent of herbs steeping on a stovetop in a community founded by a shamanic philosopher. They can go to Whole Foods. They don’t need to take the years-long dive into the traditions that Upton took. They can go online.

But Upton knows that he might not have taken his journey any other way. The herbs called him, first with their scent, then with their power.

NBJ

BIOHM Health targets the long-overlooked mycobiome

Biohm-powders-supplements.jpg

In the dietary supplements industry, startup companies tend to follow a familiar arc: a marketing or business whiz observes a gap in the marketplace, comes up with a potential new product or business model to address it, focuses on brand-building and recruits a science team to oversee R&D.

Other startups attempt to take the reverse approach. “So often, a researcher says they have this great idea for a product based on a project they’ve been working on, and I’ll shake my head because I know it will not be a commercial product,” says Mike Bush, managing partner at GrowthWays Partners and executive director at Kerry. “They’d have an audience of only about nine people, and the researcher is certainly not a business person anyway.”

A much less traveled path from product inception to launch to commercial success is something like this: an esteemed National Institutes of Health–funded researcher with more than 400 peer-reviewed published articles to his name develops a novel supplement line and support program that fulfills a widespread consumer need. This researcher, along with his entrepreneurial son, happens to have launched several consumer products in the past, giving the duo the collective expertise to nurture this latest concept into a winning enterprise.

This third scenario is the story of BIOHM, a microbiome-based brand launched in March 2017 by Mahmoud Ghannoum, Ph.D., director of the Center for Medical Mycology at Case Western Reserve University, and his son, Afif Ghannoum, a biotechnology attorney, entrepreneur and inventor who holds multiple patents. The company engineers specialized probiotics and also offers a suite of innovative services to help customers achieve optimal health, but it is the science behind the products and the program that gets them the NBJ Science and Innovation Award.

“Dr. Ghannoum has quite a pedigree and does excellent research, so it is nice to see that, rather than a group of financial or marketing people assembling a science team later on. This company was founded on science first, and then they started the business,” Bush says. “This may be a common path for medical and healthcare companies, but it is not nearly as common in our space.”

BIOHM’s science-centric model, along with its unique products and wellness services and its ongoing contributions to further microbiome study, make this innovative young company a shoo-in for the 2018 NBJ Award for Science and Innovation.  

The mycobiome gets its due

Ghannoum is, by all accounts, the godfather of the mycobiome, a term he coined decades ago to represent the vast but oft-overlooked fungal community dwelling in the human digestive tract. It was through his early studies of candida that he became aware of and focused on fungal microbes, their interactions with gut bacteria and their combined impact on health. Since then, Ghannoum has been the torchbearer of this niche area of microbiome science, demonstrating the importance of fungi—which, like bacteria, include both beneficial and deleterious species—through his ongoing research.

However, until recently, Ghannoum’s work remained largely under the radar, as the bulk of microbiome study over the past few decades has focused on bacteria. Product development has mostly followed that tack, with probiotic supplements, designed to populate the gut with beneficial bacteria, flooding the marketplace. Yet few conventional probiotics address the body’s fungal communities (at least not directly), which, according to Dr. Ghannoum, leaves harmful fungi species to proliferate unchecked, upsetting the overall microbial balance and potentially ransacking health.

But it wasn’t until his game-changing 2016 discovery that Ghannoum and his son were driven to launch BIOHM. In his landmark study published in mBIO, the journal of the American Society for Microbiology, he demonstrated that detrimental bacteria and fungi work in concert to form biofilm, a digestive plaque akin to the gunk that builds up on teeth. Biofilm coats the harmful bacteria and fungi in the gut, allowing both types of microbes to wreak havoc in the body.

With this new knowledge, Dr. Ghannoum developed a line of probiotics that supply not only carefully selected beneficial bacteria but also beneficial fungi, plus a digestive enzyme shown to neutralize and break down biofilm—a three-pronged approach to promoting a healthy, balanced microbiome. The company began by selling its probiotics direct to consumers online and quickly amassed a loyal customer base. More recently, BIOHM has also forayed into social selling, training elite ambassadors to educate on and market the products within their own networks.

“We like to back companies that are based on science with the brand built around it,” says Shad Azimi, managing partner at Vanterra Capital, an early private-equity investor in BIOHM. “There are a lot of great brands out there, but they don’t have good science. Dr. Ghannoum and Afif are also large investors in own their business—they put their money where their mouths are.”

As Azimi sees it, along with building a powerful direct-to-consumer brand, BIOHM can also find success via the B2B channel, by becoming an ingredient player across various supplements. “BIOHM can be like the ‘Intel inside’ for entire supplement and even food categories,” he says. “Think, whey protein or yogurt ‘powered by BIOHM.’”

Beyond peddling probiotics

BIOHM’s probiotic formulations alone would make this company stand out, but its offerings go much further. Most notably, and uniquely, it supplies the BIOHM Gut Test. “A consumer collects a fecal sample, sends it back to us, and we use next-generation sequencing to isolate the DNA of the bacteria and fungi present,” Dr. Ghannoum says. “This gives us a profile of which microorganisms live in this person, as each microbiome is different. For instance, they may have an increase in protobacteria or candida.”

Then, based on this analysis, done in conjunction with Case Western’s Center for Medical Mycology, a BIOHM nutritionist consults with the customer to provide recommendations. “They’ll explain what they should do in order to bring back balance to the microbiome, not just with a probiotic but also with their diet, as we should not rely only on supplements,” Dr. Ghannoum says. “Or, for someone whose microbiome looks good, our recommendation may be to keep doing what you are doing, but if you want to supplement your gut with good organisms, use our probiotic.”

Customers can then keep tabs on how their microbiome changes over time by repeating the Gut Test after they’ve made dietary tweaks and incorporated BIOHM products. “This is why I don’t look at BIOHM as a pure consumer-products play as much as I do a consumer microbiome company,” Bush says. “This is what the whole quantification of personalized data is all about, and it’s nice to see someone in the microbiome space doing something innovative with it.”

Invaluable database

Besides just supplying BIOHM customers with valuable insight into their guts, the microbiome samples collected by the company add to the vast database Dr. Ghannoum has been amassing through his years of research for NIH.

“We have thousands of samples and are starting to look at what patterns we see in the U.S. population so we can try to help people,” he explains. “We are a company based on science, and in addition to selling products, our main aim is to give back. We are doing a study on autism, getting fecal samples back to see where there are imbalances, and then we hope to be able to suggest foods and supplements that can help these kids. Eventually, our plan is to do something with Parkinson’s and Alzheimer’s.”

Azimi views this database as yet another path to success for BIOHM. “They have been approached by pharmaceutical companies wanting to buy their data,” he says. “Science suggests there is a link between the microbiome and autism, so for a company wanting to develop pharmaceuticals for autism, having access to BIOHM’s data can be very valuable.”

NBJ

United Plant Savers works to keep the Wild West out of wildcrafting and preserve native herbs

Herbs and capsules

Goldenseal is fairly easy to propagate. The plant grows wild in moist forest soils, and its roots can be divided and replanted for the long-term viability of the species. The problem comes from a thriving natural products industry where rampant and irresponsible harvesting of wild populations has led to a doubling in raw material pricing over recent years. “I’m even seeing brands remove goldenseal from products,” says Susan Leopold, executive director of United Plant Savers (UpS). “It’s an interesting contrast. On the one hand, you’ve got companies doing well in the marketplace with premium products, and on the other, an iconic American herb is disappearing from our forests.”

UpS has fought for the conservation of herbs and botanicals like goldenseal for 25 years now, and to celebrate that milestone, NBJ has chosen the organization for its 2018 Stewardship Award. “It just takes a good plan with a little time and money to fix this one,” says Leopold, referring to goldenseal. “And guess what? When you grow goldenseal the right way in its natural habitat in the woods, you protect the whole forest. Using the forest to grow botanicals gives a double bonus of saving trees on a planet that’s getting hotter and hotter, a planet that needs those trees.”

25 years in the making

UpS was founded in 1994 by Rosemary Gladstar and a small group of like-minded individuals to promote the conservation of native, wild, medicinal plants in the U.S. and Canada. “Richard Liebmann (the first executive director at UpS) came up to me at a trade show,” says Michael McGuffin, president of the American Herbal Products Association (AHPA) but, at that time, knee-deep in herb commerce with his tincture company McZand. “I was a big user of goldenseal, echinacea, several thousands pounds each of several wild-harvested herbs. He gave me his spiel; I said it sounded like I was doing it wrong and he knew how to do it right, and he said I should join the board. So I did, way back in 1999.”

Over the past 25 years, UpS has brought together a diverse mix of perspectives and voices from industry, academia, and diehard herbalists to create programming designed to shepherd herbs toward a sustainable future, despite the intensive pressures of growth cycles of the supplement world. “UpS chose the route of inclusion,” says McGuffin. “That’s part of the reason why it’s remained relevant all of these years. They’re not only talking to themselves.”

Women leading women

While the UpS story is years in the making, it couldn’t be more timely as a successful case study in female leadership. The organization’s personality and charisma was set early by Gladstar and such prominent herbalists as Pam Montgomery, women with a true commitment to the heroism of iconic medicinal plants like goldenseal, cohosh, osha, ginseng, and slippery elm.

Gladstar’s influence now extends well beyond UpS, with some 1,200 professionals convening each year at Wheaton College for the International Herb Symposium. Another 900 women gather for the New England Women’s Herbal Conference as well, adding more fuel for the fire of female leadership in herbs. “Our membership and our demographic is really focused on women,” says Leopold. “We’re grass roots, with a paying membership of about 4,000 who sustain the organization and let us educate and empower people to protect these important plants.”

And let’s not forget Leopold herself, speaking of women leading women. “Susan is a remarkably focused and energetic leader,” says McGuffin. “I would call her a dynamic achiever. She decides to do something, and then she just goes and does it.”

The at-risk list

UpS is perhaps best known for its at-risk list of wild medicinal plants most vulnerable to human intervention. The list is widely referenced in academic and research communities as well as in any discipline that touches on the biology of native plants in North America. At present, the list includes 20 species—including goldenseal, American ginseng, blue and black cohosh, and wild yam—and an accompanying watchlist includes another 23 plants.

“They filled a void we didn’t even know was a void,” says McGuffin. “Every herb school has at-risk plants as part of its curriculum now. UpS really taught us to pay attention to conservation issues, to make conservation and sustainability a core part of the personality of the contemporary herbalist in America.”

Forest grown

If Leopold has her way, UpS might become as well known for its Forest Grown verification program as the at-risk list. The program began as a partnership with the organic certifier PCO, but UpS took over the reins in April of this 2019. “I think the Forest Grown program will become one of our biggest accomplishments,” says Leopold. “Most woodland botanicals are being wildcrafted, and we need a certifying agency to verify their stewardship. We work with the landowners to intentionally grow these diminished populations of plants over a 4-, 5-, even 10-year cycle before harvest.”

With an established market in place, high-value, wild American ginseng was a good place to start, and Mountain Rose stepped up as the first company to market aggressively around the Forest Grown certification. Next up for a push toward widespread certification? Goldenseal, of course.

Leopold also harbors aspirations to expand her organization’s certifying chops with Forest Grown into Fair Wild, with UpS the agency that brings that designation into the U.S. market.

What’s next?

To cap off its 25th anniversary, UpS will open the doors on a new capital project, the Center for Medicinal Plant Conservation at its 379-acre sanctuary in the Appalachian foothills of Southeast Ohio. The site includes a restoration hiking trail, accommodations for visiting UpS members and seasonal interns, and expansive populations of those crucial American plant species like goldenseal, ginseng, and cohosh.

“We’re very excited to open the center and dedicate it to Jim and Peggy Duke,” says Leopold, referring to Dr. James Duke, the celebrated herbalist who passed in 2017, and his wife. “We’ll have a museum on herbal medicine, a teaching classroom and commercial kitchen, and a climate-controlled herbarium collection.”

UpS will also have its hands busy dealing with more than just goldenseal. There’s a nefarious white sage mafia to police. “We’ve been trying to unravel the white sage trade,” says Leopold. “It’s blown up, with products landing in trendy stores and even Walmart. We’ve seen lots of arrests in California with illegal harvesting from nature preserves. It just speaks to the fact that we don’t always have a good way to regulate plant trade in the U.S.”

NBJ

Megafood brings regenerative agriculture into the health and dietary supplements conversation

MegaFood multivitamins

Activism by supplement companies typically comes in the form of activism for supplement companies, lobbying, rallying, signature gathering and generally raising a voice for the scientific and legal legitimacy of dietary supplements.

Activism without a direct connection to the cash register can seem remarkably rare.

That’s part of what makes Megafood’s commitment to spreading the word about regenerative agriculture such a good fit for the NBJ Award for Education. Whether it’s staging rallies in Washington or taping public service announcements designed to spur action at a local level, the New Hampshire-based whole food supplement company is devoting time and dollars to a subject far too broad to fit on a label.

Megafood obviously holds more than a tangential connection to regenerative agriculture. The food in “whole food” supplements is grown on farms, after all, but Bethany Davis, the company’s director of advocacy and government relations, says the connection between the health of soil—and by extension the planet—is far from tangential.

“When you have less healthy soil, the food is less healthy,” Davis says.

That helps explain the path that Megafood hopes consumers will follow them down. The company has taken a very vocal stand against glyphosate not only as an end unto itself but also as a step toward understanding regenerative agriculture. The ubiquitous herbicide Monsanto sells as Roundup poisons more than just plants. It poisons the soil itself, and soil health is the most basic element of agriculture.

Framing the discussion so that Roundup is, essentially, an antibiotic cast indiscriminately across the landscape by the ton helps consumers understand the connections that go beyond herbicides in food. With growing awareness of the microbiome, it’s easier to explain that microbes are as essential to the soil as they are to the gut. And both are being impacted by glyphosate. “As a supplement company that sells probiotics, we care about gut health,” Davis says.

From there, it’s a quick trip to how soil health affects the nutrient quality of food and then onward to how healthy soil is not only a hedge against global warming, by being more resilient to both drought and flood, but eventually a source of climate change remediation, by drawing heat-trapping carbon dioxide out of the atmosphere and back into the soil. Megafood’s aim is to lead consumers down that path one step, and one connection, at a time.

That path was all but invisible to consumers not so long ago, but Davis sees a consciousness rising, with recent stories on the carbon-capture potential in such broad-reach mainstream media outlets as the New York Times and NBC News. “There’s definitely something happening,” Davis says. “People are getting it.”

Brands however, aren’t waiting for consumers. Megafood certainly isn’t. Their new Healthy Farm Standard program is requiring the farmers that supply the company to take concrete steps towards regenerative practices. But big brands aren’t ignoring it either. Davis points to General Mills’ recent commitments to sourcing from regenerative farmers. Applegate is leading Hormel towards regenerative agriculture, too. “Brands have such easily disrupted supply chains that they aren’t doing their jobs if don’t get their supply chain healthier,” Davis says.

But what Megafood is trying to do is show what’s possible for brands in terms of activism and education around regenerative farming. Megafood is not a big company, but it’s made a big commitment. The Ban Glyphosate Rally is one example. Recruiting independent natural retailers to help gather 80,000 signatures for a petition asking the EPA to ban glyphosate as a desiccant used for drying oats is another. The public service announcements make a difference. Backing an effort to take on glyphosate in the five boroughs of New York City brings the focus local. And page after page of information on regenerative practices on the Megafood company web site ties it all together.

“We want to teach people how to make soil healthier, to draw down more carbon,” Davis says.

“At the same time, we teach them how to engage their local parks department or their mayor or governor.”

United Natural Products Alliance President Loren Israelsen calls the company’s efforts something he’d like to see more of from supplement companies. “Their work on regenerative agriculture is literally going to breathe life back into dead and dying soil. Their efforts to teach us about the role of regenerative agriculture have been central to a growing understanding that organic and non-GMO are the foundation, but regenerative agriculture is the future,” Israelsen says. A healthy body is not possible without a healthy agricultural system, he says, and more supplement companies need to make that connection for consumers. “Imagine if there were 100 Megafoods and 1,000 Bethanys,” Israelsen says. “Our earth would have a fighting chance.”

Carbon Underground Chairman Tom Newmark, whose daughter Sara Newmark teams with Davis as Megafood’s director of social impact, would likely call “100 Megafoods” a good start but not enough. Supplement companies, more than almost any other industry, are already losing supply to climate change, and the entire industry needs to get more involved. Commitment like Megafood is displaying is all too rare, Newmark says. “I hope more companies jump on board, quickly. We need all hands on deck.”

That brands can be the educators is not unusual, Newmark explains. “It’s what happened with organic. It’s what happened on GMO, and it’s what will happen with regenerative, restorative, ecological agriculture.”

NBJ

Traditional Medicinals weaves purpose into every corner of its business plan

Traditional Medicinals Organic Mountain Tea with Lemon Balm & Caraway

“We define mission and philanthropy a little differently,” says Traditional Medicinals co-founder Drake Sadler. “We don’t see that the work we do here is philanthropic.”

The work Traditional Medicinals does is multifaceted and has been since 1974 when Sadler and Rosemary Gladstar founded the company and pioneered the wellness tea category. The then-couple—he a social activist, she a third-generation herbalist—infused good works and quality sourcing into the business instinctually.

Today TM is the leading seller of wellness teas in the U.S., and those ethoses have only deepened to include third-party certification, and evolved to direct contributions into source communities. In the senna-producing region of Rajasthan, India, for instance, the company, along with its non-profit Traditional Medicinals Foundation, have contributed to the building of five schools (which serve 850 children), the donation of 570 bicycles (to help children get to those schools) and the installation of 548 water catchment/storage systems that bring water security to 3,300 people and reduce water-collection efforts of women in affected communities by hours per day.

Sadler refers to this as “social engagement in our supply chain,” which he differentiates from philanthropic work that, in his view, usually takes the form of annual corporate donations to causes that, while worthy, are disconnected from company purpose. “God bless them for that,” Sadler says of the corporations making such charitable donations. “Somebody needs to; there’s not a problem with that.”

“We do those things, too,” Sadler says [The company website indicates $1.1M in contributions to non-profits between 2014 and 2017.] “But the real work connected to our mission and our purpose is not philanthropic. It’s doing common sense social business.” It’s this exemplary attitude and action that have earned the company the 2018 NBJ Mission and Philanthropy award.

Doing it the right way

Sadler looks back on the founding of the company as a fortunate recipe of ideals—and idealists: up-and-coming and uncompromising herbalist Gladstar and Sadler, at the time working in community development with the Office of Economic Opportunity.

“Rosemary absolutely insisted on quality, integrity and efficacy in all of the products that the company made,” Sadler recalls, “and we were quite successful simply because the products worked.” Together, Sadler says, “Rosemary and I were able to combine this commitment to efficacy with social equity—and it worked. For all the right reasons, it worked. It wasn’t because we had great business plans or any financial backing. We didn’t have the luxury of the kind of executive leadership that the company now enjoys, people that have all this experience and know-how. It just goes back to doing it the right way. We just did it for those reasons, because it made sense. And success followed.”

“Drake has always had a keen vision for fairness and fair play in the herb industry,” says Mark Blumenthal, founder and executive director of American Botanical Council, “and is especially careful in the sourcing of Traditional Medicinals’ herbs since the early days back in the 1970s.”

Business case

The focus on the supply chain goes back nearly to the genesis of the company when representatives of the brand began traveling to source regions. Initially, Sadler recalls, it was a function of quality. “We recognized right away [that] by having people in those sourcing communities we could certainly affect quality by simply training farmers and collectors on good agricultural practices, whether it was improved growing methods or erosion control, or how to dry the materials properly and store them properly.” These efforts not only affected quality, they had a positive impact on the people in those communities.

Next came availability. TM’s quality requirements, which include purchasing only medicinal grade plants and prioritizing certified organic (99.6 percent of ingredients are organic) and certified fair (which accounts for over 40 percent of ingredients), made sourcing even more challenging. “That really reduces the amount of available material on the global market that meets our standard.” The company found that by working with communities to expand their sustainability and productivity, it could better mitigate risk of out-of-stocks.

Sadler speaks of the poverty in many of these indigenous regions that serve as the “lowest denominator in the supply chain,” which magnifies their susceptibility to price pressures. The result of this is well known: younger generations move on to other opportunities. “Those are big concerns for us, how to protect our supply chain, and how to educate the next generation of collectors so that they see the profession as a very honorable profession, which is connected to the world supply of medicine and not just, you know, some herbal tea company in North America.”

Adding the marketplace value of consumer engagement and eager retail partners to the list of benefits bolsters Sadler’s recurrent claim: “It’s the right thing to do from a business perspective.” It also creates an empowering and unifying effect on company culture, he says. “When you align any organization with a higher social purpose, something quite phenomenal occurs: retention goes way up, a lot more people start coming to you because they want to work for this kind of an organization.

“In other words, we can demonstrate how investing in our supply communities actually improves our profitability by virtue of lower supply risk, higher quality, lower risk to migration of labor, all those things.”

Team players

ABC’s Blumenthal finds it easy to “opine on Traditional Medicinals and their commitment to their values, especially sustainability, equity, and fairness in their supply chain.” He points, too, to how active the company has been in the broader industry community. “They have supported many nonprofit organizations since their beginning, including ABC. They have also been very active in AHPA since it was established in 1982, where TM was one of the founding members and a member of the board of directors.”

Additionally, the company supports United Plant Savers (see p XX), the American Herbal Pharmacopoeia (see page XX), has been a member of Green America since 1992, and has been a certified B Corp since 2012, earning a B Impact score 2.5 times the average of companies that have completed the assessment. TM was twice named a B Corp “Best for the World” honoree.

It seems that many agree, Traditional Medicinals is good for the world, and has been since Gladstar and Sadler launched the company 45 years ago.

“He’s driven to make the world a better place,” says Doug Greene, New Hope Network founder and long-time friend of Sadler’s. “He’s not driven to make money.” The company has made money, however, and it’s through such success that it achieves another of Sadler’s goals: “To serve as a thought leader within the industry to create models which demonstrate return on investment for social investments in supply communities.”

On the question of philanthropy, Greene suggests that the work Traditional Medicinals exemplifies could be called “Philanthropy 3.0.” “TM is one of the great companies in this business that really is vision- and mission-driven, has been successful, really owns a category, and is continuing to innovate and try to get these products out for the world,” says Greene.

How to strategically iterate your early stage product

Origin Almond

Origin Almond is an almond juice company from New Jersey that first hit Mid-Atlantic Whole Foods Market shelves in January 2017. They just officially launched on a wider scale February 2019. In their first 18 months, Origin Almond went through a rapid-iteration stage, purposefully iterating their product eight, soon-to-be nine, times. Iterating, or tweaking an existing product to make improvements, can be a tricky, endless task if approached without a strategy. But luckily, there's strategy to be found.

Jake Deleon, founder of Origin Almond, is all about iterating products early on. Deleon comes from a "big food" background, previously working with brands like Starbucks Coffee and Pringles, and he knows the importance of making changes as a smaller brand. For starters, "it gets more complicated and costly" with bigger brands, explains Deleon. So, emerging CPG brands: strategically iterating your product on a small-scale and early just might play to your advantage.

Since their first iteration, Origin Almond has achieved organic quarter-on-quarter growth of about 20%, and they're currently planning their first capital raise to fuel that growth even further. In this case, iteration has played a key role in that success.


Jake Deleon Origin Almond.jpgWe caught up with Deleon to chat about why iterations are important as a young consumer packaged goods brand and how he's done it successfully with Origin Almond.

Why are iterations important during a brand's early years?

Jake Deleon: When I started Origin Almond, we had an interesting concept and product of almond juice. The challenge for us was how to get that right positioning and product right before we were confident enough to grow it at scale. So our solution and strategy was to iterate the heck out of it in the beginning until we got to a comfortable enough level where we were confident in the product that we can fully launch.

The importance of iteration is getting that feedback and making changes to your product early on where it doesn't get too costly or too complicated down the road.

With so many iterations early on, do you have a benchmark for "success"?

JD: I think an easy way to judge is based on quantitative data. Look at your sales. How well does it sell? If you find something pre-iteration is selling at five units per week per store, and then you do an iteration, put that similar product out there that's improved, and you find that your sales go up by two units per week per store, that's a great improvement. That means something's happening. 

Have you gotten any feedback from tradeshows and iterated products as a result? 

JD: Yes. Even before Natural Products Expo East, we were attending other trade shows. I would always bring product with me and ask people in the industry, "What did you think?" Immediately, using their leverage and experience in the market, they would tell [me] right away, "What does this mean? Why are you doing it this way? Why don't you consider doing this?"

Even at my time last year at Expo East exhibiting, the number one thing was that [attendees] were intrigued by almond juice, but after they tasted it, I was like, "What did you like, and what would you change about it?" You get a whole wealth of information from that. A lot of good consistent feedback, and it was that consistent feedback that I immediately applied to the next iteration after Expo East.

How did you handle iterating your product multiple times while still on the shelf?

JD: Luckily for us, we were small. If you start out small enough, nobody cares what you changed. Most consumers remember bad experiences and bad taste, and they remember good experiences and good taste. If you introduce a product that tastes good and meets what they're looking for, they'll remember it. 

What advice would you give emerging CPG brands around iteration?

JD: It's always tricky with an early, emerging product, because you can always change probably 2,000 things about an item. It can get as executional as changing the label from green to blue, or it can even get as deep as changing your entire formulation or removing a certain ingredient altogether.

Ask customers what's working right about it and ask them what they love about it. If you find it's not selling well or certain customer groups are not liking it, find out why. Based on that feedback, you improve. Keep repeating the process until you're comfortable with something and you find there's good traction with it as is.

Are you an early stage brand looking for the right way to scale and expand in the natural products industry? Join us at Natural Products Business School at Expo East 2019 for a day full of learning and networking purpose-built for emerging brands.

Natural Products Expo East LogoWhat: Natural Products Business School (education add-on required)
When: 7:30 a.m. - 4 p.m., Wednesday, Sept. 11, 2019 
Where: Hilton, Key Ballroom

 

 

[email protected]: Oregon State University launches largest US hemp research center | GMO salmon approved in Indiana

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Oregon State University launches largest, most comprehensive hemp research center in the nation

Oregon State University officials recently announced plans to build the largest research center in the nation that is solely devoted to the study of hemp. Hemp could potentially become a major agricultural commodity in the United States and abroad because of its usability across several industries and sectors. Read more at Forbes …

Indiana aquafarm is approved to sell genetically modified salmon

Should everything go according to plan, the first batch of around 100,000 genetically engineered salmon will reach the market by late 2020. Some businesses and restaurants, however, have already decided that they won’t be selling them because of the consumer stigma against GMOs. Read more at NPR …

New stackable beer can would eliminate plastic six-pack rings

Innovative stackable cans known as “Fit Packs” use zero plastic to screw together and are currently being tested by Grupo Modelo for Coronas sold in Mexico. In an effort to prevent further plastic pollution, the Fit Pack design will be open source for the entire industry. Read more at Forbes …

One man is trying to fight climate change by mobilizing an unlikely team: Iowa’s farmers

Matt Russell directs a nonprofit that promotes a religious response to global warming, and he preaches that America’s farmers are a “secret weapon” in the climate fight. Russell believes that growers care about global warming far more than past polling has indicated—they just feel they can’t talk about it publicly. Read more at Mother Jones

A new produce warehouse in Los Angeles will prevent millions of pounds of food waste

The Produce Pit Stop is a 6,000-square-food warehouse space in southeastern Los Angeles that has rescued over 77 million pounds of produce to date. It is one of Southern California’s only food recovery spaces, gathering fruit and vegetables from backyards and retailers that would otherwise rot or be thrown out. Read more at Civil Eats …

NBJ

Vital Choice Wild Seafood and Organics brings traceability to seafood and fish oil

Vital Choice Wild Seafood & Organics logo

Sure, the menu at your favorite restaurant declares that perfect pan-seared salmon to be wild Alaskan.

But how can you be certain that someone didn’t pluck it from a fish farm instead? Consumers might think they are splurging on better, healthier fish—wild-caught sockeye, sea bass, snapper, and others—but investigations repeatedly show that bait-and-switch seafood fraud is rampant. The conservation group Oceana recently reported that its researchers DNA tested fish from grocery stores and restaurants across the country and found 21 percent was mislabeled.

It’s been nine years since Oceana began testing seafood and raising awareness, but progress is swimming-upstream tough. Seafood fraud continues to be such a major problem that it dominated conversations in May at the National Restaurant Show, America’s largest gathering of food service professionals.

It’s why Randy Hartnell, a longtime Pacific Northwest fisherman and founder of Vital Choice Wild Seafood & Organics, makes traceability a priority and lends his voice to the fight for transparency across the category.

“We talk about our sources, we are proud of them, and we have nothing to hide,” says Hartnell, whose 17-year-old business based in Washington state offers home delivery of fresh frozen seafood, fish oil supplements, and organic meats.

Early adopter of transparency practices

Vital Choice was an early adopter of supply chain transparency practices, with Hartnell earning industry-wide praise for his dedication.

Most of Vital Choice’s fish—salmon is the company’s bread and butter—comes from runs in Alaska and British Columbia. Any customer who wants to know more about where the seafood is caught, frozen, packaged, canned, smoked or shipped from (which is never far from the Pacific coast), can find an abundance of information on the company website.

“Commitment to authenticity, transparency, and sustainable seafood for future generations is part of Vital Choice’s ethos and recognized by many in the industry,” says the Marine Stewardship Council’s Everette Anderson, senior commercial manager. 

Vital Choice products bear the MSC’s blue fish label—the gold standard certification for sustainable seafood. It tells consumers that an item is verified wild caught, sustainably fished, and the product’s journey from ocean to market has been well documented. To earn the label, producers must submit to rigorous annual audits.

“It’s a huge and costly burden for a lot of businesses, but it is the price of being very credible,” explains Hartnell, who runs a relatively small operation, with just 38 employees.

Hartnell started working with the MSC a full year before he and his wife Carla launched Vital Choice in 2002.

“Randy and his team have been frequent participants on panels, contributors to stories or regularly leveraging social media to push stories that discuss wellness, quality or transparency,” Anderson says.

Started with a summer job

Hartnell’s career in seafood started with a summer job on a commercial fishing boat in Alaska to finance his way through college. One summer turned into two… and before he knew it, he was putting aside graduate school plans and buying his own boat.

Hartnell worked for 24 years as a commercial fisherman in the Pacific Northwest and Alaska “riding 20-foot tides and becoming intimately familiar with the wild sockeye salmon.”

But the industry took what he calls a dark turn in the 1990s as large-scale salmon farming began devastating traditional fishing communities.

It was around this time that he and other commercial fishermen traveled to grocery stores around the country to promote wild Alaskan salmon.

Here’s what he learned: “There was so much pressure on them (grocers) to keep prices low that they had no choice but to lower their quality standards.”

Hartnell’s experiences during the ‘90s led him to launch Vital Choice and speak out about what he sees as the nutritional, economic, and environmental downsides of farmed seafood, especially salmon.

Consumers will pay for quality and transparency

Today, Hartnell doesn’t shy away from the fact that many Vital Choice products cost more than industrially produced foods.

It’s the cost of quality, he says, claiming Vital Choice’s wild Alaskan and British Columbian salmon are some of the healthiest on earth. And all Vital Choice’s seafood offerings, which include sablefish, halibut, cod, albacore tuna, Alaskan king crab, Oregon pink shrimp, and Maine lobster, are supplied by fisheries certified sustainable either by MSC, State of Alaska, or the Monterey Bay Aquarium’s SeafoodWatch program.

Hartnell added Wild Alaskan Sockeye Salmon Oil to Vital Choice’s menu around 2004 in direct response to what he saw as a lack of transparency by other fish oil suppliers.

“My mom was buying Costco’s Kirkland brand fish oil. I wanted to find out what kind of fish were used so I called the company and got the runaround,” he says. “At one point someone told me it came from farmed sardines, but I knew there was no such thing.”

Vital Choice’s fish oil is made from the heads of freshly harvested wild Alaskan sockeye and processed within hours of harvest.

Coming soon: Hartnell is excited to put MSC-certified Chilean sea bass (a.k.a. Patagonian toothfish) on the menu, which is no small thing. This desirable, expensive, and buttery fish fell out of favor after a confluence of controversies. The deep-water species was illegally fished almost to the point of decimation. Diners ordering Chilean Sea Bass were being fed another cheaper fish. And toothfish fishing methods were hooking and drowning thousands of seabirds, including the endangered albatross.

But now, thanks to supply chain monitoring and crackdowns on poaching, toothfish is back on the table—as long as it has MSC certification.

“We are definitely in the age of the socially and environmentally aware consumer, and they like to have access to more information about the foods they buy for a variety of health and ethical reasons,” says Sara Lewis of FishWise, a nonprofit sustainable seafood consultancy based in Santa Cruz, CA.

For somebody like Hartnell, that demand is an opportunity to tell a story, a story that began when a college student climbed aboard an Alaskan fishing boat. “We are proud of our sources,” Hartnell says. “We know it’s important to our customers.”