Editorial: Reflections From Anaheim - Part 2 - Focus on Nutracon

By Len Monheit

I’ve now had a chance to reflect and ponder a bit, and have determined that without clear objectives, anyone just attempting to ‘take in’ a bit of Expo West and Nutracon last week, likely just about perished from sensory overload. It’s interesting to note that the show floor, while extremely active, was not the only place the business of the industry was taking place. Many companies use the gathering for national and international meetings, saving sales call and meeting costs, and from a general networking and ‘pulse gathering’ experience, there really is nothing like it.

Surprising to many was the fact that optimism in general was high, for almost all categories, including supplement and functional products. This was despite negative media coverage, neutral or inconclusive science in many areas, and an as yet uncertain regulatory environment – technically for both functional foods and supplements. I’m still gathering feedback and anecdotes from the show floor, (please keep them coming) and so this week, will focus on some thoughts about Nutracon. Targeted at business leaders and product developers, this event continues to evolve and find its way and niche.

Nutracon – a Brief Review

This year’s Nutracon (March 7-9, 2007) featured a la carte pricing and an initial day featuring a Food and Beverage Track, followed by Day 2, which presented a Dietary Supplements / Bioactives curriculum. Both were very well attended with many of the halls full right until 5 o’clock and the event’s closing. One of the challenges facing organizers was getting started on time, and getting stragglers to the halls to hear very interesting and relevant plenary speakers first thing in the morning..

Day 1:

Julian Mellentin, Editor-in-Chief of New Nutrition Business was the chair for the first day plenaries. The first formal speak was his colleague and Emeritus Professor of Marketing at London’s ImperialCollege, Dr. David Hughes. Among the guidances and observations provided by Dr. Hughes was a market movement to ‘polar’ behavior and interests (ie. Global versus local and new versus traditional). Dr. Hughes reiterated the reality for functional product makers – keep the message extremely simple for consumers, observing that sometimes, more than health benefit, how a product is produced makes for a better message, using sustainability, fair trade, ‘carbon-neutral’ and ‘clean and green’ as perhaps more compelling messages. For early stage players seeking an entry position, he urged creative partnerships, citing alliances among the powerful as examples of leveraging either technological or research strengths to gain market traction. Successful companies he noted, would need to be solution focused rather than product focused.

An excellent speaker and visionary/analyst regarding functional food and beverage trends, Julian Mellentin then discussed his own observations and insights. Key among these was the observation that digestive health and its association with general wellness was a key driver, likely ultimately to be a major force in North American markets as well, from its strong current base in Asia and the EU. Julian cited the simplicity of marketing messages and pointed out that in Japan, 65% of all FOSHU products are digestive. Among strategies that seemed to be effective, he urged companies to work with health professionals, be active in sampling programs, use product formats that made sense (ie. probiotics and dairy rather than some more extreme formats) and to not rely on communicating medical benefits.

Attendees next learned about the science of EGCG relating to cardiovascular disease, obesity and diabetes, presented by James Elliott, director, Nutritional Science, New Business Development from DSM Nutritional Products, followed by two case studies. The first of the case studies was presented by XanGo, a mix of state of the category relating to mangosteen and the unique story and strategy behind the XanGo functional beverage. While some in the audience found the presentation overly commercial, many in the audience were intrigued by the relatively quick emergence of a functional beverage giant with hundreds of millions of annual sales. Obviously, there is something in the XanGo story and approach that has got the attention of both core and mainstream consumers, and while attendees didn’t get the ‘keys to the kingdom’, they did receive some good insights into the company’s evolution, its upcoming scientific plan for its own products and the category, and bits of background that may explain the company’s twin channel marketing approach (retail and direct marketing).

The final presentation of the morning was a case study co-presented by Cognis Nutrition & Health and Wild Flavors, describing the companies’ collaboration and approach to functional product development and commercialization. While some felt that this presentation was also a bit commercial, nestled inside were some tidbits of information regarding timeline contraction strategy for functional product launch, the rationale for the Cognis:Wild collaboration in the first place, as well as some of the advantages of using platform technology providers rather than reinventing the wheel.

The afternoon sessions offered three separate tracks featuring functional personal care (decently attended), nanotechnology (discussing the ‘touchpoints’ of this emerging technology with the food and beverage industry), and finally, the immensely popular a panel and breakout session dealing with new applications and marketing of functional foods and beverages, chaired by beverage guru Jim Tonkin, and featuring an all-star cast of presenters including Anthony Almada, Jeff Hilton, Loren Israelsen, Mary Mulry and interestingly, at least for me in the short time I was able to attend, Steve Rosskam, Executive Vice President of flavor organization, David Michael and Company. Participants, over a several hour period were guided through the sector, regulations, trends, formulation issues and much more. Originally intended to be a workshop environment, the workshop itself never materialized as the presenters instead engaged in lively discussion. Personally, there were a couple of key points that I noted, including the issue of caffeine and its use (abuse) and safety , a point that was to be further reiterated the next day and I was a bit intrigued by the introductory presentation by Steve Rosskam, arguably a traditional ‘foodie’, when he began speaking with some authority about omega-3s, probiotics, lactose, allergen and gluten free, antioxidants and eventually, acai, pomegranate, blueberry, chocolate, goji, capuacu, mangosteen and guava.

Running concurrently with the second half of this well-attended ‘workshop’ were presentations on mood, cognition and brain health, as well as a final case study: Omega-3 Versatility in Food Applications, presented by Ocean Nutrition’s Ian Lucas.

As mentioned earlier, in most sessions, attendees were interested and intrigued enough to stay right to the end to get program value.

Day Two (Dietary Supplements and Bioactives)

Track Chair Loren Israelsen opened the day by introducing well-known alternative medicine practitioner and communicator, Julian Whittaker.

Dr Whittaker began by talking about how diseases are created in current society, pointing out that consumers tend to become ‘ill by decree’ when the medical community or others, lower thresholds or define new terms, largely to support the research and product development activities that give rise to new blockbuster drugs. In an impassioned presentation, Dr. Whitaker called upon the supplements industry to aggressively inform the public of the value of its products, effectively soliciting press releases and announcements that he would actively promote using his contacts and networks, proposing to incorporate this information into a public relations campaign that would also disseminate generic educational information. Reaction to Dr. Whittaker’s presentation was mixed, representing the dichotomy (some would call schizophrenia) of the supplements industry. Many feel that the right to promote and the existing state of science are adequate for industry to aggressively present the health benefits of its products. Others feel that the level of research and substantiation needs to be ratcheted up significantly, and that over-promotion and misrepresentation of the real ‘state of the science’ would be a disastrous course. Those in attendance, both in Dr. Whittaker’s presentation and what was to follow, got a good view of this dichotomy. Of significance, was the announcement by Dr. Whittaker that he will be taming up with radio personality Deborah Ray, on future production of Healthy Talk Radio.

Next up was a panel discussion on the State of Governmental Science, presented by Joseph Betz (Office of Dietary Supplements, NIH), Luke Bucci, Schiff Nutrition, and Mary Hardy, Ted Mann Family Resource Center), moderated by Loren Israelsen. Some of the points raised in the ensuing presentations and discussions included a perspective that the peer-directed funding process currently employed is inadequate, most studies are currently drug-modeled, study teams typically do not operate optimally and hence might not be the right combinations and skill-sets, and that there have been excellent studies performed, that when communicated or driven by the wrong hands, have undone much of the study’s potential impact. An interesting term introduced by Luke Bucci was the concept of ‘Medical McCarthyism’.

The morning closed with a presentation by Marc Blumenthal and Norman Farnsworth, that if anything, might have left the audience feeling a bit hungry for more as these two legends presented a top 10 forecast, including an analysis of successes and failures over the years, and examining future product prospects. Of note, was the guidance that researchers focus on mechanically oriented studies, utilize the SBIR process, or fund an ‘industry research center’.

The afternoon’s sessions included ‘Creating an Intellectual Property Platform’, ‘Designing Studies that are Measurable and Useful’, a logical extension to the morning’s plenary, and an around the world discussion dealing with Global Regulatory issues.

In the latter, Herbalife’s John Vernardos presented the current US environment including some of the implications of the political environment and upcoming legislation, as well as possible regulatory priorities and initiatives by the FDA and FTC. Next up was Rod Berman from the firm of Jeffers, Mangels, Butler & Marmarco, LLC who dealt with a subject that I personally have never heard, at least in the context of this industry, considerations for a global intellectual property strategy. Michael Chen from Kirton and McKonkie next presented evolving developments in China, focusing on the regulations involving multi-level marketing and the strategies employed by market leaders in navigating the ‘rules’. The global session concluded with Efi Leontopolou running through a masterful presentation on the increasingly complex European Union regulatory environment, with yours truly presenting the latest developments from Canada, a regulatory environment with much promise, but extremely frustrating in actual practice.

All of these sessions too, like those the first day, were well-attended with an interested audience asking questions, in fact, until after the scheduled concluding time.

This year’s Nutracon, most agreed, represented marked improvement with high quality, focused content, and the a la carte option seemed to work well with the flexibility demand of show attendees. The content produced in collaboration with the United Natural Products Alliance (UNPA) was engaging and relevant.

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