Since WholeFoods’ last supplier roundup, consumer trends have codified and become more pronounced. We’ve spent the year reporting on them, and keeping our readers abreast of new products meeting consumer demands. Now, it’s time to get a jump on what will be the consumer buzz in 2020, and take a look at market opportunities and challenges.
1. Plant-based everything. It’s a trend driven by everything from health to the rise in vegetarianism to a desire for sustainability to, quite simply, taste. Randy Kreienbrink, VP of marketing at BI Nutraceuticals, notes, “Plant-based proteins are being used, particularly in meat alternatives.” But plant-based has stepped out beyond the grocery section—and will continue to do so.
As Barri Sigvertsen, senior marketing manager at Lonza Consumer Health & Nutrition, explains: “Plant-based vegetarian supplements continue to grow in popularity.” Lonza research shows that 68% of consumers believe plant-based products are important when purchasing supplements—part of the driving force behind the development of Lonza’s Vcaps Plus Purple Carrot vegetarian capsules, which can both differentiate pills from competitors through color and facilitate on-pack label claims like plant-based, color from natural sources, and non-GMO.
John Sauve, VP of marketing at Artemis International, says Artemis “fits perfectly into the current consumer trend for plant-based and functional ingredients: Sometimes, you’re in the right place, at the right time, with the right outstanding and differentiated products. Our Berryceuticals product lines, including extracts from Austrian Elderberries (newly branded as ElderCraft), Aronia, and Black Currant, are establishing a remarkably strong market identity.”
Related: The Plant-Based Boom
2. Ethical business practices. Sabinsa’s Shaheen Majeed, president worldwide, notes: “Today’s consumers, particularly the supplement savvy millennials, want to know more about the products they use. They wonder about if the product is ethically produced, how qualityis achieved…Sabinsa has been focused on those things for decades.” And just as product trends take root with the supplier, Majeed tells WholeFoods that good ingredients start with the farmer. “It’s essential to have good relationships with the farmers who grow our raw material. In fact, most of the herbs we use for our branded ingredients are grown by farmers in rural India with whom we have fair trade contracts. We’ve fine-tuned the program, providing seed to the farmers, training them to grow herbs sustainably and cleanly, and guaranteeing a minimum purchase price no matter what nature variabilities may impact a harvest.” That minimum purchase price is just that—the minimum: “When herb prices go up, Sabinsa pays more for the harvest than the contracted amount.” The payoff? “Because the relationship with Sabinsa is mutually beneficial, the farmers aren’t interested in selling the crop to competing companies when demand is high, which can be a significant problem in the area.” Majeed adds that Sabinsa goes beyond just supporting the farmers: “We have become very close to the people in the villages, supporting schools, and improving rural infrastructure.”
Related: B Corps: Going Above and Beyond
3. Sustainability. It’s still a growing trend—“72% of sports product consumers are looking for products that are environmentally friendly,” says Sigvertsen—but for suppliers, it’s nothing new; it’s just gaining recognition.
Regarding the 41-year-old BI Nutraceuticals, “Sustainability has always been a concern,” says Kreienbrink. “It’s necessary for continued business. Without sustainability, we don’t have products to sell, and we’ve always been aware of that.” That said, he adds that the implementation of sustainability is always evolving: “We’re building on our existing practices, thanks to better control over how products are actually grown, whether wild crafted or planted. Advancements in technology also make a difference—digital tools help, as does a better understanding of everything from moisture in the soil to the weather.”
France-based DRT, creator of resin and terpene derivatives, has a similar perspective. As the company says in a video on theoriginalpinebarkextract.com, every time a tree is cut down, a new one is planted, and cared for, for 30 years, until it reaches maturity and becomes part of the company’s products. This requires millions of seedlings to be transplanted from nurseries each year. “Every single part of the tree is used,” says Nathalie Luzecki Michaud, marketing manager at DRT. “Nothing is lost, nothing goes to waste.” A video on another DRT product, available at vitaflavan.com, notes that the extraction process involves hot water and recyclable, food-grade solvents, making it particularly eco-friendly. The company’s extracts, marketed as Oligopin and Cosmythic, as well as Vitaflavan—grapeseed polyphenols—are all clean and sustainable, assuaging any consumer guilt regarding tree-based products. DRT has also initiated the process of being audited by EcoVadis, a company that rates business based on environmental policies, labor & human rights policies and ethics.
Horphag Research, too, works to keep their tree-based products sustainable. “We source Pycnogenol and Robuvit from sustainable forests and oversee all processes from extraction to manufacturing,” says Sébastien Bornet, VP global sales & marketing. “We hold our products to strict purity standards, and that quality starts at the source. The maritime pine trees are a sustainable, cultivated plant and are grown entirely without pesticides. We only use the bark of pine trees that have been allocated for use by the timber industry, and French law ensures that all maritime pine trees removed for use are replanted. Similarly, our latest ingredient, Robuvit French oak wood extract, belongs specifically to the Quercus Robur species of oak tree—which grows in the forest of the Massif Central region in France under strict sustainability rules. Robuvit is extracted using water. No solvent, pesticide or herbicide is used in extraction to create a safe and environmentally friendly production process.”
Moving off land and into the ocean, Lonza recently launched a new ingredient to meet consumer demand: Oceanix, which is a marine phytoplankton ingredient. “A pilot study shows that it may offer potential health benefits for physical performance and an increased physiological response against oxidative stress to aid recovery. Plus, it meets the demand of today’s active consumers, who are looking for naturally and sustainably sourced, non-GMO, clean label ingredients.”
4. Regenerative. Many consumers are looking for products that actively help the planet. Suppliers are finding ways to reduce pesticide use, herbicide use, and to improve the soil. “Farmers are taught natural techniques to control pests,” Majeed says, “such as placing insect-repelling plants among the herbs, and giving irrigation support when rainfall doesn’t cooperate.” In WholeFoods’ September article Regenerative Agriculture: 25 Things to Know Now, suppliers and manufacturers shared how they are looking to regenerative agriculture to meet consumer demands—and to save the planet. David Bronner, cosmic engagement officer at Dr. Bronner’s, told WholeFoods: “Regenerative Organic Agriculture has 3 main pillars: Soil Health, Animal Welfare, and Social Fairness. This model provides solutions for how we can mitigate climate change via carbon sequestration in the soil—and furthermore, looks at how animal welfare and socially just labor and production models are important to building a future in which agriculture is contributing to the vitality and health of both people and planet.” Brian Zapp, creative director at Applied Food Sciences, noted that for suppliers, the problem goes beyond pollutants and chemicals: “In many cases where raw materials are sourced, global living conditions are poor and laborers are easily taken advantage of. For companies like Applied Food Sciences, we recognize this problem and have taken serious steps by creating our own Responsible Sourcing Initiative that includes sustainable growing, socially responsible sourcing, and full traceability.”
5. Traceability. This is another increasingly important priority for consumers: “80% of U.S. consumers want to know the source of ingredients,” says Sigvertsen. He adds that this is to a specific end: “54% said they would prefer to buy dietary supplements derived from natural sources—an increase of nearly 60% compared to 2013.” Fortunately, this is becoming easier with technology. Kreienbrink notes that visibility is crucial to traceability—and that “luckily, through Youtube and the internet, it’s easy to increase visibility. We invite customers to visit our growers, but for those who can’t make it, videos bring things closer to home.” He adds that, while BI doesn’t itself have a Youtube channel, those who manufacture products using its ingredients often do.
This view can be seen echoed throughout the natural products industry. DRT’s videos are a solid example; Sabinsa is known for welcoming customers to visit its facilities. Visibility also increases transparency and faith in quality control systems—bringing us to our next two trends.
6. Focus on Quality Control. Of course, the quality of the product shouldn’t end when it leaves the ground (or the branch, or the tree, or the ocean). Quality control practices are a matter of pride for many companies, including Artemis. Melanie Bush, director of science, says that “The quality of our ingredients is of utmost importance at Artemis. Relationships at the grower level, strong chain of custody control, and audits of the fields themselves help to ensure that the growing practices and quality of the raw materials are suitable for what will ultimately become our finished ingredients. For example,” she continues, “we and our manufacturing partner for our ElderCraft extracts have a long-term relationship in place—spanning decades—for premium supply-chain assurance and consistent quality of our particular Haschberg cultivar of black elderberries.” Artemis’ facility, Bush adds, complies with cGMPs and all audits—and results are cross-checked with third party laboratories, just for good measure. “We do not compromise when it comes to product safety and quality, and we guarantee our product consistency on the basis of purity, potency, and identity.”
At Deerland Probiotics & Enzymes, Tod Burgess, VP of sales, says there’s a reason they invested in a state-of-the-art facility specifically for probiotic manufacturing: “In older facilities, the environment may not be optimized for temperature and humidity control, which may result in the final product having lower than claimed CFU counts. This then may require the manufacturer to require overages that increase the price.” Deerland has gone to great lengths to make this facility the best: “Probiotics are delicate living organisms that will perish when exposed to heat, humidity, and oxygen,” Burgess says. “As such, our facility was designed with sensitive environmental control as a priority: Thick, insulated walls and roofing ensure a vapor barrier with a permeability rating near zero. Air flow is also critical. The ideal environment when working with probiotics incorporates HEPA filtration for incoming air, and either releases the spent air outside or leads it through HEPA filtration.”
That’s not all—production and timing are equally crucial: “There are approximately 30 steps in the process of creating a dietary supplement from raw probiotic material,” Burgess says. “Operating as efficiently as possible within strict time limits allows for a probiotic’s incidental exposure to temperature and humidity to be drastically reduced. A linear flow eliminates over-handling and waste.” And on top of all that—Deerland’s facility has “a 24/7 monitoring system, which also sends an alert whenever the humidity and temperature change.”
The Benefits of Focus
While a broad portfolio allows a company to appeal to a variety of markets and applications, there are perks to focusing on one ingredient or service. “For over 30 years Bergstrom Nutrition has concentrated exclusively on MSM,” says Hammond. “This dedicated focus has enabled us to hone our premium branded product, OptiMSM, into a brand that is recognized and trusted worldwide for its quality. That singular focus and commitment to MSM, along with our proprietary distillation process, has allowed us to differentiate by continually investing in our quality management program as well as research. Bergstrom’s continuous investment in research—we have over 35 studies on OptiMSM—has enabled us to discover new applications for MSM, support related claim language and prove efficacy.”
Ixoreal Biomed has one branded ingredient, KSM-66, and they do a lot with it: Their website notes that they own the entire supply chain, allowing for transparency and traceability. KSM-66 has been evaluated in 22 gold-standard human clinical trials. The payoff of that work: KSM-66 is in 680 products in 524 brands, sold in 42 countries.
7. Research, research, research. After all of this, we have to return to the base of any good ingredient: Research, without which there’s hardly any point in harvesting an ingredient at all. Suppliers see it as a worthy expense. “As we dawn on the third decade of the 21st century, ingredient suppliers need to be fully dedicated to investing in continuous research,” says Burgess. “Consumers will not themselves invest in brands that contain ingredients with borrowed science or no studies. New validations are always enlightening,” he adds, noting that it’s never possible to do too much research. “As with any other supplier with a significant and growing portfolio of research, we are intrigued by the possibilities of exploring potential new applications or mechanisms of action, as well as use.” And probiotics, specifically, are an exciting area: “There are hundreds of strains being discovered, as well as new conditions and systems they can specifically support. In addition, probiotics are central to newer scientific discoveries such as the gut-brain axis, and the numerous microbiomes. So there are tremendous research opportunities for the foreseeable future.” And all this research, particularly into safety, has a payoff: “DE111 just received a no-objection letter from the FDA for GRAS status. It’s a versatile probiotic; its spore-forming ability protects it and allows it the flexibility to be used in a wide variety of products.”
Kaneka Nutrients makes research the cornerstone of its company, however long that research takes. Regarding the decision to sell probiotics, Mike Kolifrath, VP of the probiotics division, says: “Over a decade of clinical, experimental, and in-vitro studies were conducted to provide the foundation for the Floradapt line. Kaneka engaged in an extensive, global search for probiotic strains that impact particular health targets. The multi-year process led our two teams—European and American—to develop a portfolio of advanced probiotic formulations which we named Floradapt. All Floradapt products are formulated with proprietary strains, backed by published clinical trials, and are designed to utilize the actual trial dosages in the finished commercial products. Kaneka’s Probiotic Division has now launched multiple probiotic formulations, and we have a pipeline of future products which can be made from our extensive bank of over 1,000 clinical probiotic strains…the line-up offers distinct solutions for diverse health targets such as children’s colic, cardio, digestive, oral, immune, vaginal, and urinary tract fields.”
Kaneka’s senior R&D scientist, Joshua Garey, notes that this focus on research extends to their original product, CoQ10; Kaneka’s is yeast-fermented, specifically because “CoQ10 from yeast fermentation manufactured in the United States and Japan is what has been used in most of the scientific and clinical research into the safety and utility of CoQ10 supplementation.”
Research has still more benefits: It can open up entirely new markets. Horphag’s Pycnogenol, for instance, given its combination of procyanidins, bioflavonoids and phenolic acids, is generally used in dietary supplements and multivitamins—but research over the past few years has revealed that it is also useful in cosmetics. “Groundbreaking research in 2012, published in Skin Pharmacology and Physiology, showed Pycnogenol to be effective in increasing hyaluronic acid production and hyaluronic acid synthase by 44%. Research published in 2014 in Pshows supplementation to significantly improve the painful and visible symptoms of psoriasis, including redness, flaking, thickness, and total surface area of affected skin patches—an important benefit for the nearly eight million Americans impacted by this autoimmune disease. And a review article published in 2016 in Skin Pharmacology and Physiology shows the body of research behind Pycnogenol and its benefits for photoprotection, reduction of hyperpigmentation, and ability to improve the skin barrier function. Pycnogenol’s natural antioxidant properties and photo-protective capabilities all help to improve skin health and make it a welcome addition to both topical cosmetic products and oral formulations for skincare.” Given the burgeoning nutricosmetics—or “beauty from within”—market, and given the size of the cosmetics market, this shows how research can pay off.
8. Transparency. Manufacturers, retailers and consumers want to know all of this, leading us to trend number eight: Transparency—which, Michaud notes, actually does need to be a consumer trend. “When I say ‘transparency,’” she says, “I also mean ‘transparency beyond regulations.’ In the U.S. market, there is still misleading information about the characterization of ingredients. Using the example of polyphenols and OPCs—oligomeric procyanidins—the ingredients cannot be characterized properly with the UV method. Some players in the market use the ambiguity and the complexity of methods to claim false content of active molecules.” This argument is playing out in the probiotics segment—as WholeFoods reported, at the Dietary Supplements Regulatory Summit in May, a full 50 minutes was devoted to speakers presenting the issue: Quantifying probiotics in terms of weight is misleading at best and gives no sense of a product’s concentration, making CFUs the better choice—but both speakers agreed that CFUs, too, are imperfect, and that different technicians or testing methods can get different counts on the same lot. Better methods are available, but aren’t generally recognized by consumers. Transparency here, in particular, between supplier, manufacturer, retailer, and consumer, is vital—and as consumers educate themselves regarding the challenges of this segment and of the industry in general, they’re likely to start asking more questions, necessitating transparency through the whole product chain right back to the suppliers.
The Trade War… And Other Challenges
“Our reality is that over 80% of the raw material ingredients used in the production of U.S. manufactured vitamins and dietary supplements originate in China,” wrote Scott Steinford, managing partner at the Trust Transparency Center, in July’s Tracking Transparency column, titled Trade War Raises Industry’s China Conundrum… Again. “All aspects of the dietary supplement industry including raw material suppliers, manufacturers, retailers and consumers will be impacted, both short and long term, by this trade war.”
Discussing the impact of the trade wars, Kreienbrink tells us that BI’s pricing actually hasn’t changed yet—but that there are delays. Leslie Gallo, president of Artemis International, says that they’ve had an advantage—“Most of our ingredients are produced in Europe or domestically.” That said, she notes, “The recent round of tariffs is about to hit us hard. We have some unique extracts produced with a partner in China that are included in this latest wave of tariffs. In an effort to mitigate the impact for our customers, where feasible, we ran additional production and are stocking product, but while we are doing our best to offset the impact and will be absorbing some of the added cost, our customers are aware there will need to be a price adjustment—though hopefully a temporary one. In addition, customers are requesting we invoice the added cost as a ‘tariff adjustment’ as they are monitoring the overall impact on their business as well.”
The supplier-distributor relationship faces its own challenges. “Several things are considered when choosing a product,” says AIDP’s Kathy Lund. “First, is there a point of difference and a market need? AIDP spends a significant amount of time vetting products through the R&D process, quality control, and analyzing the market potential. The second consideration is the supply chain: Ensuring a reliable, consistent, and safe product is paramount to the product’s success. AIDP representatives travel the world visiting product manufacturing sites, meeting with the growers and product developers to ensure the highest quality product. Each stage of the ingredient development is evaluated. Once received, the product lots are tested to ensure they meet the required specification.”
The biggest challenge: “Identifying the right supplier or manufacturing partner, and ensuring a consistent product,” says Lund, who notes that AIDP prides itself on offering the best product for that price point. “Quality products do not always have to be expensive, but they need to be consistent and have a reliable supply chain.”
9. Certifications. All of this can be conveyed to the customer through third-party certifications, which customers love—according to Sigvertsen, “Lonza’s research found that third party certifications now carry significant influence for consumers as a sign of authenticity and alignment with their wider values—for example, over 50% of U.S. supplement users would be more likely to buy supplements with either USDA-Certified Organic or Non-GMO certifications.”
Suppliers are investing heavily in this area: “Bergstrom Nutrition’s OptiMSM is the only MSM distilled for purity and produced in the USA, along with being GRAS, ISO 9001:2015, FSSC 22000 and Informed-Sport certified,” says Hammond. “These certifications speak for themselves in terms of demonstrating our commitment to quality and differentiation within the marketplace. Third-party testing is another component of our commitment to quality, safety, and transparency.”
Distributors are looking to up their portfolio of certified ingredients for precisely this reason. “AIDP invests in recognized quality seals, giving manufacturers an added guarantee,” says AIDP’s Kathy Lund, VP of marketing. “Our Magtein and PreticX both have NDI and are FDA GRAS. Over 40 Natural Remedies lines of branded and Signature Botanicals received Non-GMO Project Verified; other products going through the approval verification process include our Vegan D3. All products in our branded product portfolio have some form of third party quality seal.” Non-GMO Verified, Lund says, is particularly helpful with certain products. “It was particularly important for PreticX, which is derived from corn cob.” And AIDP doesn’t just certify its products: “AIDP is one of a handful of suppliers that is NSF Certified and has been for over 7 years. This rigorous achievement ensures a quality supply chain on the back end.” (For more on certification, go here.)
10….and the major trend for 2020. Take a guess: You got it! “Hemp extract,” says Kreienbrink. “That’s overshadowing everything, dominating everything.” It’s a difficult prospect—Shelley Choy, Hawaii’s agriculture department hemp program coordinator, told Hawaii Public Radio that “It is really hard to grow a [hemp] plant [with a THC level] that is 0.3% or below” (1). In Hawaii, she added, it’s particularly difficult—the climate is unique, and strains that work one way elsewhere don’t work the same way there. The hemp market is growing—Global Market Insights predicts that it’ll hit $270 million by 2025—but there will be setbacks along the way, as exemplified by the August news that Hawaii had to destroy more than half its hemp crops due to high THC levels.
The rest of the future—besides the further development of regen agriculture, advances in traceability and transparency—will involve customer research. Majeed notes that “any customer can easily find out about the research and ethics behind Sabinsa ingredients.” And while, as he notes, that’s important for both manufacturers and retailers who are putting their reputations on the line, it’s also going to be something consumers begin doing more often. They want to know where their ingredients come from, and if those ingredients are scientifically supported, and research portfolios don’t fit on labels. Suppliers will want to make their research—at least the abstracts—available online, for consumers trying to decide where to spend their limited dollars. WF
1. Associated Press, “Hawaii Destroys Hemp Growers’ Crops Due to High THC Levels,” Hawai’i Public Radio. Posted 8/27/19. Accessed 9/1/19. https://www.hawaiipublicradio.org/post/hawaii-destroys-hemp-growers-crops-due-high-thc-levels#stream/0