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Healthnotes acquired by TraceGains is play in synergy plan to expand services

Gambian president to build allherbal AIDS hospital

Two companies working on similar challenges from different starting points will be working together to tie manufacturers and suppliers across a spectrum from food to dietary supplements.

TraceGains, the acquirer, focused on the food and beverage industry, connecting brands with ingredient suppliers and meeting the needs for documentation and other regulatory concerns. Healthnotes was doing something very similar with dietary ingredients, layering in regulatory notes and also scientific studies of each ingredient.

Healthnotes was looking to leap past the chicken-or-the-egg argument to a critical mass of companies. TraceGains was looking for a guide to the supplements industry, something Healthnotes founder Sky Lininger says his team can supply in abundance. “What we really bring is expertise. We bring relationships, we bring an understanding of the regulatory challenges."

TraceGrains CEO Gary Nowacki says the industry is in dire need of the software-driven connections the combined teams can provide. “You’re talking about thousands of companies buying from thousands of suppliers and all struggling with exchanging information,” he says. The ability to accelerate Lininger’s efforts with Healthnote’s Vitature platform made sense for a company that was looking at the supplement industry as a next destination for their services. “All the Healthnotes folks weren’t just starting to learn about supplements. They were in it for years and years and years. At TraceGains, we were just starting to learn about it.”

Among the projects, the greater depth of resources could provide, Nowacki says, is a program to help companies accelerate product-to-market cycle. He predicts the tools could cut “15 to 30 percent off of the time-to-market."

Lininger, who will join TraceGains as president of dietary supplements, says he expects to see the promise of Healthnotes modem more fully realized. “You couldn’t ask for a better company from our standpoint or their standpoint,” he says.

Natural Foods Merchandiser

Sophie’s Kitchen taps family’s food expertise to create sustainable, allergen-free seafood alternatives

Rebecca Wilson Studio Sophies Kithchen Eugene Wang.png

About 10 years ago, Eugene Wang’s almost-2-year-old daughter, Sophie, had a severe allergic reaction from her first taste of shrimp. Thankfully, the toddler recovered, but the scary episode led to an aha moment for Wang, a longtime entrepreneur in the vegan and vegetarian food sector whose family owns a vegetarian production facility in Taiwan.

“It got me thinking about how there were no vegetarian seafood alternatives on the market,” Wang said. “And there would be a market for it, especially with so many people like Sophie who need it. So I thought, why not use my family’s food-manufacturing knowledge to start a business?”

Also driving Wang was his deep concern about the health and sustainability of our oceans. He believes that America’s insatiable appetite for seafood has had devastating consequences that will only intensify. So after researching ingredients and devising the proper technologies, Wang launched Sophie’s Kitchen in 2010 and began retail distribution the following year. Made in his family’s facility, this innovative line of vegan seafood features soy-free, gluten-free, non-GMO, plant-based ingredients in lieu of anything fishy.

In the years since, Sophie Kitchen’s has found tremendous success nationwide. We recently sat down with Wang, along with the company’s marketing guru, Susan Carskadon, to learn more about Sophie’s Kitchen’s history, mission and success.

Eugene, what is your family’s background in the food business?

Eugene Wang: We are four generations of Buddhists and vegetarians, starting with my grandma and grandpa. They were making vegetarian food as street vendors in Taiwan. Then, my father is the true scientist and genius in the family. He graduated with a food science degree from a college in Taiwan and received more training at the University of California, Davis and in Japan. He set up our family’s vegetarian food manufacturing plant in Taiwan over 30 years ago.

Susan Carskadon: But then Eugene continued this work. He earned his MBA from Columbia. It’s exciting and magical how Sophie’s Kitchen all came together. The family has hundreds of years of cumulative experience, and when Eugene realized the issues of dwindling seafood and dirty fisheries, it became apparent that launching a vegan seafood company is what he should do.

How did your interest in ocean sustainability play into this decision?

EW: I am deeply concerned about seafood consumption. I know it’s a great source of nutrients and energy for people, but then again, look at the damage we’ve done because of our appetite for seafood. Experts predict that by 2050, there will be a total collapse of the ocean ecosystem. That is very, very alarming. Through our research and technology, we can use a lot of sea plants and algae to replace seafood. After all, fish gets its omega-3s from eating macro- and microalgae, so instead of eating fish to get your omega-3s, why not eat foods that will straight-out provide all the nutrients you want?

What are the main ingredients in Sophie’s Kitchen products?

SC: We use seaweed along with konjac (Amorphophallus konjac) and pea protein—only real food, nothing lab-grown—to create our seafood alternatives. We use these products as a platform to get people to understand that our oceans are in danger. According to a Unilever study, 33 percent of consumers prefer to buy things that are both socially and environmentally conscious. We hit on the social and environmental implications of what is happening to our oceans.

What is konjac?

EW: Actually, you can call it a yam. The Japanese first used konjac back in the 12th or 13th century; the Chinese and Koreans have been using it for a long time as well. This ancient root plant is highly sustainable. You can harvest the yam in three to four months, but if you leave it in the ground, it grows to be as large as a human! That’s why it is also called “elephant yam.” Konjac can grow in hot, swampy places like Thailand and Vietnam and in dry places like Korea, so it is very versatile.

Was Sophie’s Kitchen the first brand in the plant-based seafood space?

EW: We were definitely, definitely the first. We started way before most people understood all [the issues with] seafood. We knew we should do something to help people stave off their craving for seafood. We are truly visionaries in that regard.

SC: We created the category; we were the disruptor. Some companies have followed us into this space, but our products have that mind-body connection—that mouthfeel—consumers want. And we are patent-pending. Eugene has come up with amazing things nobody else has, and there are far-reaching social aspects of all of it.

What does this patent cover?

EW: The patent is, number one, the creation of the texture. Number two, with this technology, we are one of the first companies to make plant-based food that is truly soy- and allergen-free. Look at the market before 2013 or 2014: When you’d go to the meat alternatives aisle, everything you’d see contained wheat gluten or soy. We all know wheat gluten is an allergen for many people, and there were not many other choices. We are a pioneer in bringing konjac and pea protein together into a patent-pending technology to simulate the very delicate texture of shellfish and other seafood while giving consumers the comfort of eating very clean-label food. 

Plant-based diets are more popular than ever. Do you expect this trend to continue?

EW: Absolutely. You bet. With the limited amount of land we have and the growing population, we are going to see less and less space available for raising animals for food. That means animal proteins, even though they’ll continue to be in existence, will be for the top 1 percent, or maybe the top 15 or 20 percent. They’ll be a higher-up premium product. What will the rest of the people eat? Definitely these plant-based proteins, which will be very high up in demand. I foresee a future, maybe 10 or 20 years down the road, where chicken nuggets and products like Spam will be made mostly of plant-based protein with just a tiny bit of animal protein added in for flavor.  

Are your products sold online?

SC: We limit it to a very few online partners because we want to protect our retail business. We love independents because they have been so loyal to us. We have a coupon program, and if they get in touch with us, we’ll send them coupons so they can have passive demos.

Any advice for independent retailers looking to sell your products?

EW: I think the marriage between Amazon and Whole Foods Market actually just gave independents new inspiration. Whole Foods is trying to become more like Walmart and Target, meaning it is weeding out smaller, newer brands like ours. If you look at media articles about this, they all say the same thing: Consumers do not like these plans. They really like smaller, newer, more innovative brands. So this creates the perfect opportunity for independents to embrace brands like ours. Try to do something totally different than Whole Foods or Target or Walmart, which are going with Gardein and other ubiquitous brands that consumers are tired of. Brands like ours will be very, very welcomed by shoppers of independent retailers.

Natural Foods Merchandiser

Miyoko’s Kitchen chef creates cheese that’s better for people and the planet

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Miyoko Schinner is a vegan rock star. The Northern California–based vegan chef, author and entrepreneur gave us the Now and Zen UnTurkey, UnChicken and UnRibs in the 1990s, and now she’s wowing cheese lovers nationwide with her artisan vegan alternatives.

Launched in 2014, Miyoko’s Kitchen offers 19 plant-based, dairy-free cheeses, spreads and butters—all non-GMO, cholesterol-free, hormone-free and pesticide-free.

Schinner, who believes her mission is building “tomorrow’s creamery,” sees a bright future for vegan cheeses and encourages retailers to go all in on the category. We recently scored some time with Schinner to learn more about her path to veganism, her company’s mission and what’s in store for this fast-growing market.

How did you first become interested in veganism?

Miyoko Schinner: It was the mid-1980s. I was already a vegetarian because I didn’t want to harm animals, but I always had stomach troubles too. Then it dawned on me that maybe dairy was the cause. I tried giving it up and, sure enough, my stomach woes went away. Then I was plant-based for a number of years—an evolving vegan—but I had a hard time turning down a beautiful platter of cheese. Give me that stinky limburger and beautiful brie! But after learning about the dairy industry, I had to make the commitment to not eat dairy at all. It was very hard. What was I supposed to have on Friday night with my glass of wine? To me, that was the good life, so this was a conundrum. I went on a quest to find tiny bites I could enjoy with wine. At first these didn’t involve cheese. But when I opened a restaurant it San Francisco, I perfected my vegan recipes over the years.

How did Miyoko’s Kitchen come about?

MS: I wrote a book called Artisan Vegan Cheese in 2012, and it became a cult classic. I would often make these recipes in my home and take my cheeses to parties. One year, I took some to a Tofurky party at Natural Products Expo West, and after eating my cheeses, my good friend [Tofurky founder] Seth Tibbott said if I turned this into a company, he’d be my first investor. I was a serial entrepreneur but had never been super successful, so I was not planning to go back into business. Seth gave me the inspiration to do so.

What key ingredients are used in your cheeses, spreads and butters?

MS: Right now, the key ingredients are cashews and coconut. We are considered a very premium line, so we’re more expensive than others. But what distinguishes our brand is we use natural fermentation as the main driver of flavor; we don’t add things to the cheese to get flavor. We are playing around with other substrates that are less expensive than cashews—things like legumes and grains—to make a lower price point for more mass appeal. Our new cream cheeses are our first foray into a more everyday line, products sold for $5.99 versus $10.99.

Are there nutritional benefits offered by dairy cheeses that yours do not deliver?

MS: That’s an interesting question, but it belies a myth about dairy cheese. Dairy cheese ranges hugely nutritionally, depending on the type. Some are much higher in fat and lower in protein than others. Also, unless it’s organic, dairy contains a high percentage of antibiotics. And whether it’s organic or not, dairy is high in IGF-1, a major growth hormone and contributor to cancer. It is also high in casomorphin, a naturally occurring opiate in mammalian milk. People don’t really consider all these aspects of cheese, so ultimately we are not trying to be dairy. We are trying to create something better than dairy, something that will provide nutrition, fiber, no pesticides and no hormones.

Do you aim to mimic the taste and mouthfeel of dairy cheeses?

MS: Yes, we try to make our products as much like cheese as possible to give people the satisfaction of eating cheese so they can transition to better-for-you products more easily. People will often ask, which one is most like cheddar? Which is like Jarlsberg? That’s not exactly what we’re trying to do—we’re more trying to mimic different attributes of a range of cheeses, such as soft and creamy or hard and robust.

What was your experience breaking into retail?

MS: We were an e-commerce business initially because we wanted revenue right away. It was always our plan to move into retail, but I had been out of the industry for so long and had heard it was much harder to get into distribution today, so I wanted to start online. We were successful from day one. The very first weekend we had $50,000 in orders, which shows there was a lot of pent-up demand for our products. Three months later, we started retail distribution just in Northern California because of a local forager program with Whole Foods. We initially planned to open a small retail shop in West Marin, but that became our e-commerce shipping center instead, although we’ve since moved to a larger location.

Plant-based diets are increasingly popular. Do you expect this trend to continue?

MS: Yes, I think this is the future. All studies show that, too. At a recent Protein Trends & Technologies Seminar, where I was the only vegan, every speaker talked about plant proteins as the future. They discussed how animal protein is just not sustainable for the environment or anything else.

Is the plant-based cheese market getting crowded?

MS: Go look at a dairy cheese set. It’s a huge section, while vegan cheese is only a couple of shelves. For the category to grow, we need more vegan cheeses of different qualities and styles. Ten years ago, there was Silk and maybe a few other brands of almond milk, and now there are more players than ever and they are taking up greater and greater market share. The same thing will happen with cheese. And it won’t be one company that takes over the set—it will be multiple companies. This is supposed to be a $4 billion industry by 2024, and for us to get there, we need even more players and a wider range of innovation. And yes, Miyoko’s Kitchen wants to be a dominant player in the category. We will continue putting a lot of resources into innovation.  

Any advice for independents for selling your products and uplifting the whole category?

MS: This category is rising at 30 percent to 40 percent every year, according to [a provider of consulting services for the natural, organic and specialty products industry] SPINS, whereas conventional [dairy] is flat-lining or declining in sales. Retailers should really pay attention to these trends and give more shelf space and visibility to vegan cheese. The more shelf space you have, the more products you’ll move. And don’t think, “Oh, we have a few brands; that’s enough.” No. Offer variety. It’s also best to create a vegan subset within your dairy cheese space to build awareness, because people who eat dairy won’t go to the alternatives section to look for vegan cheese. Yet these are the consumers who are really driving growth because they are lactose-intolerant or trying to reduce their consumption of animal products. In fact, most of our customers are not vegan but flexitarian. Just promote the heck out of vegan cheese, and I bet you will sell a lot.

What else should retailers know about you and your company?

MS: Like many other plant-based companies, we are in it for the mission, not only sustainability but also to save the lives of other living beings. To that effect, I also have a 17-acre farm-animal sanctuary, which is a nonprofit. We rescue cows and goats and pigs taken out of animal agriculture. We offer tours and visitations to help people connect with where there food almost came from but didn’t. We are very excited about the future of plant-based eating and where it’s heading. 

[email protected]: CBD in Iowa: Is it legal? | Zippin offers no-checkout shopping

Zippin/New Hope Zippin no checkout convenience store

Iowans are openly selling hemp cannabidiol, which the state says is illegal

Is cannabidiol legal in Iowa? The state says CBD products have to be manufactured under the Department of Public Health’s rules—rules that aren’t yet in place. But vendors argue they are legal because they have less than 0.3 percent TCH. While the argument goes on, consumers are buying CBD and recommending it to their friends and family because it is effective against pain. Read more at the Des Moines Register

 

Cashier-free tech makes debut in San Francisco

Zippin, a tech start-up based in San Francisco, California, has launched a software platform that reportedly will end shoppers’ dreaded wait at the checkout stand. Zippin is showcasing its smartphone-based program at a concept store in San Francisco. Customers use their phones to enter the store, then cameras and shelf sensors monitor what they pick up. Customers pick up a receipt on their way out the door. Read more at SupermarketNews.com

 

Global wheat supply to crisis levels; big China stocks won't provide relief

This year’s extreme drought has reduced wheat production and lowered reserves in exporting countries to their lowest level in 10 years. In the winter of 2007-2008, the lack of grain triggered food riots in Africa and Asia. Worldwide, plenty of wheat is available. Unfortunately, nearly half of it is in China, which is unlikely to export the crop. Read more at Reuters

 

Norway has a radical approach to plastic pollution, and it’s working

Concerns about plastic waste on our lands and in our oceans is growing, prompting a rash of government and corporate moves that may or may not be useful. Why isn’t the United States looking to Norway for a solution? In that country, consumers recycle 97 percent of their plastic bottles, exchanging them in stores, gas stations or vending machines for cash or store credit. Read more at Huffington Post  

 

Amazon quietly extended a program designed to help it sell more grocery items online

Amazon wants to offer its shoppers more groceries, and not just through Whole Foods Market. To achieve its goal, Amazon is offering third-party sellers a discount on listing fees when they put certain grocery items for sale: Grocery and gourmet items are subject to an 8 percent fee, rather than a 15 percent fee. The promotion, which was going to end in October, has been extended until December 2019. Read more at Business Insider

How independents can meet consumers' private label desires

Organic Garage Organic Garage private label

Consumers have been clamoring for organic and natural private labels, but it’s not always easy for smaller, independent retailers to enter this market.

Many large retailers have thrived with such offerings, exemplified by Kroger’s Simple Truth line of more than 1,400 organic, natural and free-from items. The brand generates more than $2 billion in annual sales and is thought to be a key component of the chain’s success in competing against Whole Foods Market.

“In the world of private label, the fastest growing grocery brands at retail are in the wellness category,” said Carl Jorgensen, director of thought leadership at Stamford, Connecticut-based retail services firm Daymon Worldwide.

The wellness category of private label includes organic, natural, free-from, clean-label and better-for-you items, he explained.

“They are the bright spot in private brands, so retailers are putting a lot of resources into those,” he said.

Consumer interest in private label overall has been increasing. More than half of consumers—61 percent—said they purchase more private brands than they did two years ago, according to Daymon’s 2018 Private Brand Intelligence Report, and 84 percent say the quality of private brands is at least as good as that of name brands. In addition, 74 percent say private label is a better value for the money, and 53 percent say they shop at a store specifically for its private brands.

According to research from The Hartman Group, consumers are generally pleased with the private label assortment in the natural/specialty retailer segment, with 40 percent agreeing such retailers offer a good selection of these items. That percentage is the same as for traditional supermarkets, but it trails the industry-leading club channel, which garnered a 44 percent approval rating for private labels.

Meeting minimum orders

For smaller retailers seeking to launch their own private brands, one of the key challenges is finding manufacturers willing to produce a small quantity of private-label product, said Jorgensen.

Matt Lurie, president and CEO of Organic Garage, a three-unit natural and organic retailer based in Toronto, agreed that meeting minimum order requirements is a challenge his company has dealt with as it has expanded its Kitchen Originals private label.

“Production minimums are always a problem,” he said. “We have to work with certain vendors that have flexibility.”

In order to meet minimum order requirements, Organic Garage has focused on high-velocity, shelf-stable items for the Kitchen Originals line. The line was revamped about a year ago with new labeling and a new look, and continues to expand, Lurie said. It began with items such as packaged nuts, seeds and dried fruit, but has since expanded into a range of other common grocery items, including rice cakes, olive oil and canned tomatoes.

Kitchen Originals, which focuses on certified organic products, is primarily positioned to be the lowest-cost option, without sacrificing quality, Lurie said.

“I feel the customers are starting to look to the brand in each category to know that they can get a good quality product that is Certified Organic at an everyday affordable price,” he said.

By focusing on shelf-stable items, Organic Garage is seeking to avoid the risk of loss through shrink from having too much perishables inventory, Lurie explained.

“If you don’t get the sell-through [of fresh items], it can be problematic,” he said.

 

Kitchen Originals displays at Organic Garage.

High-volume categories

Certain fresh items, including packaged salads, bagged carrots, milk, eggs, chicken and beef, are among the highest-volume organic private label categories, however, said Daymon's Jorgensen. Those products’ packaging tends to make them easier to label than other fresh items, such as loose produce, he explained.

In addition, some fresh items, such as vegetable-based noodles, are among the fastest-growing organic private label products, Jorgensen said. Snack combos packaged with fresh dip are another fast-growing item among organic private label, along with such shelf-stable items as bottled waters and performance nutrition bars.

Although ordering in volume remains a key issue for small retailers when it comes to private label, Jorgensen noted that some manufacturers, such as Reliance Private Label Supplements in Edison, N.J., are willing to supply relatively small quantities of private labels.

“With the tremendous growth of private brands in general in the marketplace, I would encourage small to medium-sized manufacturers to sharpen their pencils and see whether or not this could be a legitimate business for them,” said Jorgensen.

Wholesaler labels

Wholesalers also can provide some exclusive products or private labels to help independent natural and specialty retailers differentiate themselves.

At Naperville, Illinois-based KeHE Distributors, for example, the exclusive Cadia brand includes an assortment that is 75 percent organic and 55 percent Non-GMO Project Verified. And for traditional retailers, KeHE offers the Made•With brand, which is targeted toward customers “who might be at the beginning of their journey into better-for-you food,” said Charles Sundstrom, VP of exclusive brands at KeHE.

He cited research from The NPD Group and the International Food Information Council Foundation showing that more than 50 percent of consumers consider the absence of artificial colors or preservatives to be key in healthy eating.

“It is no surprise that more consumers are turning to private label brands that have developed wide assortments of natural and organic products,” he said.

[email protected]: Kroger: No plastic for you! | Charlotte’s Web IPO exceeds outlook

Getty Images Plastic bags of various colors

Kroger to ditch plastic bags by 2025

The country’s largest grocery chain will eliminate single-use plastic bags from all of its stores by 2025. The Pacific Northwest chain QFC will stop using them next year. Kroger says it is addressing customers’ request to reduce disposable packaging. Some cities have banned retailers from using plastic bags, while others charge for their use. In 2016, California banned retail groceries and foodservice retailers from using plastic bags. Read more at The Wall Street Journal

 

U.S. hemp firm Charlotte's Web boosts Canada IPO to $77 million

Charlotte’s Web Holdings Inc., which is based in Boulder, Colorado and known for a CBD that many say treats seizure disorders in children, sold its Canadian IPO at CA$7 per share and earned CA$100.1 million ($77 million, per Bloomberg). About 14.3 million shares sold, which increased the earnings from the predicted CA$65.8 million. Read more at Bloomberg

 

Bayer's Monsanto sued by 8,000 plaintiffs on glyphosate

At the end of July—before a California jury ruled that Monsanto’s RoundUp herbicide caused a San Francisco man’s deadly cancer—about 8,000 lawsuits had been filed against the chemical company, Monsanto’s CEO said in Thursday’s conference call. Werner Baumann emphasized that Monsanto will “vigorously defend this case and all upcoming cases.” Read more at Reuters.com

 

Entrepreneurs push to grow food trucks' popularity as 'everyday' food

Food trucks are hot, and not just because it’s summer. Nationwide, more than 4,000 companies operate trucks and employ more than 14,500. The industry’s annual revenue is approaching $1 billion a year. To increase their popularity beyond events such as corporate lunches, parties and even weddings, operators are trying to create destination sites that will attract and create regular customers. Read more at Lancaster Online

 

How the Halal Guys went from small-time hot dog vendors to fast-casual pioneers

When three Egyptian immigrants brought authentic halal food to New York City’s street cart scene in 1990, they discovered an unmet demand for quick, tasty halal food among Muslim taxi drivers. The Halal Guys now have franchises around the world, a mobile app and a delivery strategy that have built the company’s reputation and pushed sales for decades. Read more at The Spoon

The trend that won't die: 11 pumpkin-spice flavored products to stock this fall

In the midst of throwing on a light jacket as I walked out the door this morning, a chilling thought entered my mind: “Winter is coming.”

Well, at least autumn is coming (and the new "Game of Thrones" season isn't until 2019, so take a deep breath). And that means pumpkin spice-flavored foods and beverages will, not unlike White Walkers, soon materialize on store shelves.

Go on, scoff if you want. But I happen to love pumpkin spice season because these classic ingredients—ginger, cinnamon, allspice, nutmeg—are nostalgic. They spark memories of baking with my mom and, because I was in high school when Starbucks launched its signature Pumpkin Spice Latte (PSL, because #ImaMillennial #SorryNotSorry), this flavor also reminds me of walking to town after school on a Friday—a delicious freedom from class and sports and homework.

While we don't yet have Pumpkin Spice flavored scented Tide Pods, some pumpkin spice products veer near the point of ridiculousness. According to a 2017 Nielsen study, in the year ending July 29, 2017, sales of pumpkin-flavored dog food—yes, dog food—fetched (get it?) $41.8 million, which represents 101 percent growth over the previous year and the third largest category ahead of pumpkin-flavored coffee, baked bread and baking mixes. Sales of pumpkin-flavored liquid coffee rose to $13.2 million over the same time period, a whopping 596 percent sales growth in the year ending July 30, 2016.

Part of pumpkin spice's appeal? It's ephemerality. "The novelty of pumpkin being a true seasonal treat is a key component of the craving for it," says a 2017 Mintel report. "Operators have to maintain that seasonality without losing their edge to the competition."

Pumpkin spice flavoring continues to garner consumer attention, which can make meaningful retail sales increases. Rumor has it that PSL will come particularly early this year—both Starbucks and Dunkin’ Donuts may launch pumpkin-y products at the end of August.

Here’s just a small sampling of new pumpkin spice-flavored natural foods and beverages that will be available this fall.