The nutritional raw materials & ingredient supply space isn’t a Birkenstocks and hacky-sacs crowd. At Natural Products Expo West, you simply have to walk down to SupplyExpo in Hall A to experience the difference first-hand. And while the Natural Products Expo side of the show is more popular, the real innovation happens at SupplyExpo.

The business of nutritional raw material & ingredient supply is a lesser-researched part of the nutrition industry value chain. We’ve made it our specialty to shine light on this part of the nutrition industry and try to make sense of the global supply landscape as it pertains to the U.S. market for nutrition products.

High transportation costs, a weakening dollar and a weak economy all conspired to challenge ingredient suppliers in 2007 and into 2008. Mother nature didn’t hold back either. Suppliers of herbs and botanicals were also impacted by droughts, flooding and other server weather across the world.

As with challenges, opportunities for nutritional raw material and ingredient supply companies were fairly universal, according to executives in the nutrition industry’s supply chain.

Regulatory stabilization, geographical diversification and the implementation of GMPs are all on executives minds in 2008 and covered in detail in NBJ’s latest market research report.

All of this and more is covered in NBJ’s Nutritional Raw Materials & Ingredient Supply Report…one of the few places you’ll be able to find a broad and deep analysis of the nutrition industry’s value chain.

-Patrick

At the NBJ Summit this week, we’ll be hosting a panel on “greening” the nutrition industry. Below are a few articles I found on Brandweek.com that caught my attention. They represent a solid balance of perspectives on this challenging, and very new issue for executives. The jury is still out on the longevity of “greening”, but I hope to have some solid suggestions on what to do and what not to do following the NBJ Summit.

-Patrick

Study: ‘Green’ Products Leave Consumers Puzzled

“The good news is consumers are “going green.” But the bad news is they are still pretty green when it comes to understanding what the term really means.

“Here’s the big ah-ha!,” said Suzanne Shelton, CEO of Shelton Group, a Knoxville, Tenn.-based ad agency that specializes in energy efficiency and sustainability. “If you were an alien and you landed on the planet in April of this year, you would think that the ‘green’ market was pretty mature because you’d be hearing about it everywhere—every newspaper, every TV show you turn on somebody is talking about being green. But this is not a mature market.”

Shelton Group recently conducted a national study, called Eco Pulse, which asked consumers open-ended and multiple-choice questions about green issues. What it found was a whole lot of confusion.”

Do Consumers Care that Sun Chips are Solar Powered? Apparently

“It’s getting harder to find a brand that doesn’t claim to be green. But, do they have a solar power factory? Is the rest of their energy use offset by energy credits? And, are they rebuilding a town that was virtually wiped out by a tornado? Not likely.

Sun Chips is different. The Frito-Lay product has rooted its brand in environmental causes as well as health-forward thinking. This strategy has paid off handsomely as Sun Chip sales are up 17.6%, totaling $201.8 million for the 52 weeks ending June 15, per IRI.

Frito-Lay vp-marketing Gannon Jones talked to Brandweek news editor Kenneth Hein about why really being green is healthy for sales.”

Forget the Environment Say the ‘Never Greens’

“About 10% of the population are Never Greens, according to a survey by Mintel International in Chicago, a research firm.

The Never Greens don’t buy green products, don’t remember green advertising when they see it and are irritated by it even if they do.”

One of the new features of the new Nutrition Business Journal website is the editorial calendar page.

2009 is shaping up to be a big year for the nutrition industry with many variables in play, and NBJ will be right there to keep subscribers up to speed on developing business trends, challenges and opportunities.

2009 Issues (Preliminary)

January - NBJ Awards & Executive Review

February – Natural & Organic Personal Care

March – Healthy Foods

April – Organic Foods & Beverages

May – Direct to Consumer Sales Channels

June/July – Annual IndustryOverview

August – Raw Materials & Ingredient Supply

September – Sports Nutrition & Weight Loss

October – Consumer Research in the Nutrition Industry

November/December - Global Nutrition Industry

January 2010 – Executive Review: NBJ Awards & CEO Q&A

2008 Issues Still to be published include:

August Condition Specific Supplement, OTC & Rx Markets

The supplement industry is no stranger to competition: competition between brands, competition between multiple ingredients targeting the same health conditions, and even competition between supplements and healthy diets or functional foods. In a broader context, supplements can also overlap—and even directly compete—with over-the-counter (OTC) products and prescription drugs, even though each is regulated differently—OTC for self-diagnosed conditions, Rx drugs to be prescribed by physicians when medically necessary, and dietary supplements for nutritional support. Over many years the supplement industry has become steadily more condition-oriented in its approach to product development and marketing—a trend reflected in the layout of retail aisles and in the product mix of manufacturers. In this 32-page issue, NBJ looks at trends, developments and statistics related to dietary supplements, OTC products and prescription drugs targeting specific consumer health conditions.

September Sports Nutrition & Weight Loss

The sports nutrition and weight-loss (SNWL) sector is recovering nicely from the low-carb “revolution” and the 2004 ephedra ban. In addition, early successes in supplement industry Internet marketing and sales have come from the sports nutrition & weight loss sector in the forms of bodybuilding.com, musclemaster.com and sportnutrition.com In this 24-page issue, NBJ analyzes the $20+ billion dollar U.S. Sports Nutrtition and Weight-Loss Market.

October Healthy Foods

It is impossible to walk down the aisles of a conventional supermarket and not be confronted by healthy foods & beverages – functional, lesser-evil and natural & organic foods. In this 24-page issue, NBJ reviews healthy food & beverage categories, trends, ingredients and companies.

November CAM

America’s escalating healthcare crisis is fueling a heated debate over how to improve consumers’ health-and to what degree preventative medicine, complementary and alternative medicine (CAM) and dietary supplements should be part of the solution. In this 24-page issue, NBJ reviews how true integration for complementary & alternative medicine and supplements seems closer as healthcare crisis and costs cascade.

December – Raw Materials & Ingredient Supply

Across the board the high cost of transportation and the weakening dollar hit raw material and ingredient supply (RMIS) companies hard in 2008. Price increases, bankruptcies and global supply issues riddled the RMIS industry, making many long for days past and years to come. In this 24-page issue, NBJ presents its annual analysis of the market for raw material supply and value-added ingredients in the U.S. nutrition industry in 2008.

Last week, I attended The 2nd Annual Organic Summit at the St. Julien Hotel in Boulder, Colorado. It was quite and event and garnered a fair amount of media attention from public radio and Grist.org. But the event wasn’t about hype, it was about the issues facing the organic industry today.

Interestingly, this year’s organic summit seemed to be more about the groundbreaking newcomers in today’s organic industry as opposed to yesterdays enormously successful leaders. Daria Myers of Orgins Organics spoke about her company’s organic personal care line and a number of “organic groundbreakers” including Brahm Ahmadi of People’s Grocery and Patrice Gros of Foundation Farm & Farming School also spoke.

Breakout sessions on Thursday allowed attendees to hop in and out of discussions of social investing, nanotechnology, fair trade and organic research, to name a few.

The highlight for me, however, was the closing keynote: Maintaining the Integrity of an Organic Brand when Coa-Cola Calls. Seth Goldman, President and Co-Founder of Honest Tea and Michael Ohmstede, SVP of Business Development for Venturing & Emerging Brands of Coca-Cola together told the story of Honest Tea and the acquisition of 40% of its equity by Coca-Cola.

Though in my opinion, Seth and Michael are still on their “honeymoon”, the principles of the deal seem to make sense. Fortunately, Seth is mentored by Gary Hirshberg, the founder of Stonyfield Farm, who’s deal to sell part of Stonyfield Farm to Dannon - 40% ownership with control of the board staying in the hands of the founders for a period of time and a buyout tentatively planned for the future was the model for Honest Tea. Coke made a smart move and with their prior experience deep-sixing Mad River Traders beverages fresh in their minds, Ohmstede sounded like he’s approaching this deal with more respect of the Goldman’s wishes. Buying in when Honest Tea’s sales were only $27 million was a smart move too. Honest Tea is in dire need of distribution and Coke certainly gives them that. Honest Tea’s sales are projected to be $40 million by the end of 2008, so something is working already.

This is Jylle Lardaro, co-chair of The Organic Summit and New Hope Natural Media’s Director of Organic Industry Alliances. She reflects on what was presented and talked about at The Organic Summit.

This is Erica Stone, the conference director of The Organic Summit (and Natural Products Expo East). She talks about the attendees and the locations…as well as where The Organic Summit will be held in 2009.

For more information from NBJ on the Organic Markets, make sure you check out NBJ’s “Natural & Organic Foods” channel where all our natural & organic foods and beverages research is aggregated.

-Patrick

You may or may not know that New Hope (NBJ’s parent company) and Supermarket News launched a trade show June 18-19, 2008 called Healthy Foods International Expo.

As part of the education program, Nutrition Business Journal presented on the findings of a series of surveys of consumers, conventional retailers and conventional food manufacturers regarding their beliefs about healthy foods. The presentation was entitled New Insights into the Motivations, Attitudes and Behaviors of U.S. Grocery Consumers.

The presentation drew over 100 attendees and two breakouts on retailers and manufacturers were well attended as well. No matter how much credit we give them, conventional retailers and manufacturers of healthy foods still don’t completely get it. They have alot to learn, which made it all the more important that we were there to impart some of our industry knowledge to them over two days.

The show, though a launch, was perfectly produced and went off without a hitch (at least from my perspective). Attendance was a bit sparse, but understandably so in this economy, setting the stage for growth down the road. Approximately 100 exhibitors presented their latest healthy foods offerings to conventional retailer buyers and executives who pounded the floor.

While in the Dallas Convention Center, I took a few videos to show you what the show really looked like. Please excuse the fogginess of the video - my camera didn’t handle the humid climate so well.

This video is of the rush to get on the show floor when it opened Wednesday at 12 noon so you can get an idea of what the show looked like.

This video is of the crowd gathered to hear Samuel Fromartz, author of Organic, Inc.: Natural Foods and How They Grew, give the keynote address Wednesday evening after the show floor closed

This video is from celebrity& author Devin Alexander

To learn more about NBJ’s research on the healthy foods market, go to NBJ’s Healthy, Lesser-Evil and Functional Foods channel, where all of NBJ’s information on these categories is aggregated.

Enjoy.

-Patrick