By Len Monheit
While walking last week's SupplySide event in Las Vegas, I noticed a maturing show floor, an international audience, a good steady pace of interactions and floor traffic, on the whole well-done educational and Vendorworks sessions, and an industry seemingly poised for decent, if unspectacular, growth.
In fact, the very maturing of the industry, as evidenced by a continual influx of people from the food and consumer products industries, and the number of people on the floor using their booths as places to conduct business and book orders (seems logical doesn't it?), this maturing means that huge windfalls and product successes might become fewer and farther between, and in many cases, 'no sensational news' in effect, becomes 'good news', since it means that business is proceeding as usual.
We are conditioned to operate superlative to superlative, to seek and measure against those exceptional opportunities that might only come once every three to four years - or even more infrequently. Over the past five years, I have heard many industry presentations about those big blockbuster products and categories of the late 90's that drove solid double digit growth. Perhaps, as an industry, we must really take stock of the fact that those days might be forever behind us. First of all, double digit growth with a higher baseline is much more difficult to achieve. Secondly, uncontested growth is now impossible, as industry continues to fight legislators, regulators, media and a good part of the medical community. By continuing to expect and in fact need overwhelming successes, we set ourselves up for failure in many ways. Maybe it's a matter of managing expectations, not lowering them, but basing them on the reality of our current environment.
SupplySide West 2004 was a success for most participants. Almost everyone I spoke with accomplished their objectives, and even for those that were vague in their objectives, they were able to advance their business and their relationships at what is arguably one of the best ingredient events in the world. With some 550+ booths including well over 65 from outside the US, with three days of educational sessions and numerous exhibitor sponsored presentations, this event is probably the one in the entire industry in North America that is currently a 'must attend'.
I found it interesting that many attendees seemed quite uncertain about the success of the show and their own performance. Comments included 'no excitement', 'steady but not exceptional traffic', and more consistently, no significant, sexy, blockbuster, overpowering new product. This, I think, is important, for several reasons.
First of all, if we are collectively doing our jobs and successfully bringing to market scientifically substantiated products using responsible marketing, then a seminar at SupplySide shouldn't suddenly introduce the next blockbuster category. It should however, consistently offer the latest developments and represent an expansion of the platform of information surrounding and supporting products with growth potential and those innovative ingredients or combinations that show promise, but for which more study, formulation and development is required. Besides, while it is good timing to have results to present at a big event, research is published year round, orders are booked and communication is ongoing.
If something suddenly appears now, at this stage of the industry's development - maybe we should really be suspicious. And despite the apparent lack of blockbuster products, what we are seeing, with increasing regularity, is the application of technology to products at various stages of development, to aid in formulation, bioavailability, stability, taste, texture and other product attributes. (Cognis Tonalin CLA 60 WDP, a "high active water dispersible powder" is an example of this approach).
We are also seeing companies expand the science platform of their ingredients. and perhaps even more significantly, we are seeing emerging and changing business relationships as companies focus on their strengths and core competencies and seek others to complement them, rather than try to bring one-dimensional products or ideas to market prematurely. We're seeing these relationships manifest as co-development projects, turnkey finished product development and formulation by the ingredient supplier and even as licensing and marketing deals. (The relationship between KGK Synergize, SourceOne Global Partners and Soft Gel Technologies, Inc. to develop, study, formulate and market Sytrinol can serve as an example of this type of relationship.) We are also seeing business opportunities at the convergence of streams, for instance, the inside-out concept of natural, personal care, visible on the SupplySide floor, at last week's Health & Beauty America Event 'Inside Beauty' in New York, and certain to be evident at the Healthy Foods Conference (www.healthyfoodsconference.com) October 14th in Washington.
Maybe it's time to look beyond sexy and sensational and concentrate on gradual progression of science, product introduction and market penetration. True, sexy sells, but only until something sexier comes along. If we are to believe strongly in our products, we really need to believe in them long term and in the appropriate context. This means that the category-building, and product education responsibility is firmly supported by all participants, and that the facts to thwart the inevitable attacks from nay-sayers are readily available - as part of smart due-diligence. The more compelling the product, the stronger these attacks are likely to be.
The industry continues to evolve. Suppliers are under pressure to add value to differentiate themselves at the same time as parts of the industry that never were before, become almost commodity. 'Sustainable growth' will beat 'sensational' almost every time.