"Recent reports indicate that while the overall growth rate for the nutritional supplement industry has slowed significantly from double digit growth tnhroughout the 90's, there are other economic forces working in favor of well-positioned companies. Future growth potential for Solgar remains strong due to an increased consumer focus on quality, licensing of new, proprietary formulas with strong scientific support and international expansion. We enter the coming year with an extensive new product pipeline of innovative products.
"The future success of the nutritional supplement industry in general hinges on quality and science. As industry guidelines evolve, government regulations tighten and savvy consumers become more demanding, there will be greater need for supplement manufacturers to step up efforts to ensure their products measure up to the highest possible standards. We believe that safety and quality are the most critical issues facing our industry today.
"In the past year, we've also seen the industry come under the microscope of the mass media. Unlike prior years, the vast majority of these reports are highly critical of the dietary supplement market. We anticipate this heightened scrutiny will continue. Furthermore, we suspect it will motivate some consumer groups and politicians to call for more government regulation of dietary supplements. We will continue to lead the industry by manufacturing our products at levels significantly higher than most stringent proposed regulations. We also encourage FDA to publish the much-awaited proposed rule for Good Manufacturing Practices (GMP) for dietary supplements and establish an Adverse Event Reporting (AER) system for dietary supplements."
-Dennis O'Donnell, executive vice president & general manager, Solgar Vitamin & Herb
"It's an election year so we should have anticipated turbulence. Some spectacular supplement hits and more to come from products like glucosamine. A shakeout in B2C Internet companies and more consolidation on the way and a mixed bag of results for functional foods. Soy growing strong but some branded foods struggling to make headway despite big budgets.
"In a world where we overcommunicate, marketers need to find a way to establish intimacy with consumers. This category is important to people and the way they lead their lives. Are we always remembering that?"
-Steve Allen, vice president, new business development, Nutrition Division, Nestlé USA
"Our greatest strength as the industry that encompasses sustainable economy, healthy lifestyles, personal development, alternative health care and ecology is that we have the most dynamite mission statement of any industry on the planet! We are about health, quality of life, quality products, healing the planet and a green, restorative business model. Our greatest weakness is that we are still young and immature and have not learned how to communicate our messages to the consumer or the media. Negative reactive media is working against us right now. We need to support the trade associations, non-profits and educators that can help us overcome consumer confusion, mistrust and misinformation."
-Lynda LeMole Sadler, president, Traditional Medicinals
"The last year has seen the convergence of two factors that will change the supplement industry for the foreseeable future. The first is the clear emergence of 'science' as a compelling marketing tool and the second is the continued growth of the Internet as a powerful method for educating consumers about specific products. The important distinction between 'then' and 'now' is that consumers are less likely to look for 'ingredients' (e.g. ginkgo and St. John's Wort) and are instead learning to ask about specific brands used in clinical studies. Instead of accepting supplement claims at face value, consumers are now telling manufacturers and marketers to 'show me the data'-a situation that raises the bar for the entire industry and encourages investment in science to support product claims."
-Shawn Talbot, senior scientist-nutrition research, Pharmanex
"The year 2000 has brought many changes to the natural foods industry. According to The Natural Marketing Institute, the proportion of new natural products consumers is on the rise and becoming harder to define. The old stereotype of depicting natural foods as appealing only to the aging hippie or health nuts gnawing on foods that require a lot chewing is changing. Now we find that the natural foods consumer profile includes button down or blue collar workers, college kids or suburban soccer moms and dads-and all are embracing the concept of organic and all natural. The natural foods industry has definitely made the proverbial 'turn in the road,' capturing the attention of everyone. The growing trend of the 'self-care' consumer will be a powerful factor in driving supermarkets and natural food retailers toward serving the 'Whole Health' consumer.
"In the dairy market, specifically the yogurt category, sales of natural and nutritionally superior yogurts have been steadily climbing as consumers become more educated on the functional properties of yogurt, specifically its probiotic benefits. The notion that certain foods, such as yogurt, can provide additional health benefits and still taste great is quite appealing to many types of consumers on many levels. Stonyfield Farm products have been largely unchanged in 17 years and we are now watching the mainstream food companies such as Nestlé and Dannon begin to introduce to the general consumer the beneficial effects of probiotics in yogurt.
"The rise in public demand and desire for organic and all-natural foods is also driving the trend of acquisitions and mergers in the food industry. This year alone saw many of the big food conglomerates purchasing natural foods companies in order to strengthen product line offerings and capitalize on a $28 billion (and growing) natural foods industry. The year 2001 will see many of these companies continuing to woo the consumer with increased health claims appearing on the product packaging of traditional supermarket foods and increased purchasing and marketing of natural foods lines by mainstream companies like Kraft, General Mills and Nestlé in order to build brand recognition and loyalty amongst consumers.
"Niche products and emerging growth companies in the natural foods industry, like Stonyfield Farm, will definitely enjoy the 'wind in our sails' in 2001!"
-Gary Hirschberg, president & CEO, Stonyfield Farms
"Lifestyle choices-personal health, exercise, eating habits, education and overall consciousness-are driving consumers to be more selective about what they buy. Daily health maintenance will bypass OTC supplementation and we will see a trend toward ethical functional foods. Dietary supplements will continue to shrink as retail stores rationalize SKU's and the media prints stories that distinguish between nutrients with true clinical efficacy and questionable value. Leaders will focus on products that deliver measurable health benefits. The environment is open for a company, a brand, a publication, a group of credible spokespersons or a regulatory agency to take the lead in setting the standards."
-Mark Braman, president and CEO, OmegaTech, Inc.
"Unlike the retail health food and mass sectors of the dietary supplement industry-whose growth has slowed dramatically in recent years-the practitioner channel has remained bullish with the near term looking to continue the trend. This channel's strength is a result of the therapeutic nature and superior quality of the non-ledgered supplements marketed through practitioners to their patients.
"The reality is that the 'high ground' image maintained by the producers of nutraceuticals to the practitioner channel, and the products they produce, will ultimately be the reason for first-time users of dietary supplements to turn to the sector."
-Derek Hall, chief executive officer, Integrative Therapeutics
"Following the phenomenal growth in the 90's, the dietary supplement industry now looks like it's maturing. The downside is lower overall growth in consumer sales from year to year; the upside is that major supplement manufacturers are now focusing on producing high quality supplements and establishing long term brand loyalty and relationships with consumers. Product quality, efficacy and consistency have become important purchasing criteria.
"At Linnea, we've seen strong growth, particularly in our traditional products such as ginkgo biloba, bilberry extract and 5-HTP. On the negative side, however, we've seen a shift in emphasis in the industry press over the past 12 months; stories about herb safety issues have been getting lots of coverage and as a result, our own customers have been increasingly demanding full supply chain audits, detailed technical and analytical data and full raw material traceability. From a raw material manufacturer's perspective, this impacts on costs, although at Linnea we have been providing this sort of thing for the pharmaceutical sector for over 20 years. With more pharmaceutical and multinational companies entering into the herbal business and with increasing FDA interest, the move toward high quality standards looks set to continue. The challenge for bulk extract manufacturers is to provide true value to our customers, the dietary supplement manufacturers. In overall terms, however, better product standards can only be good for the consumer and for long term health of the industry."
-Michael Granville, president and Don Stanek, director of sales, Linnea
"It has been a very exciting year thus far with some wonderfully new and different foods and beverages soon to be launched. I see the food and beverage industry 'validating' their fortified product entries. There were approximately 60 fewer fortified beverages introduced so far this year and beverages are the largest fortified food segment. Within the new product entries, there is a significant decrease in the use of herbs as fortifiers and we are involved with many flavor improvement projects as companies begin adding vitamins, minerals, amino acids and fiber to their products.
"Natural and organic products are on the rise. They are no longer specialty items as they continue to move into the mainstream. The recent acquisition of smaller companies by multinational food companies will continue to increase mass market availability. The introduction of new organic regulations will have an interesting impact on this industry over the next year. Soy has been the big word thus far in 2000. Soy is being formulated into almost every conceivable application, from a wide array of soy-based beverages to desserts, bakery items, sports nutrition bars and beverages and in hot and cold cereals. I think we will see many interesting soy and other grain based foods and beverages on the market shortly. Very high quality and good tasting products are being developed, which should gain consumer appeal. It is invigorating and very exciting to be a part of this growing market."
-Maureen Draganchuk, vice president, business development, Virginia Dare
"We see a shift in demand for health benefits from supplements to food and beverage delivery vehicles. The lines between what are called foods, nutraceuticals or dietary supplements have become more blurred. Consumers are looking for convenient and tasty ways to get the specific health benefits. Getting those benefits through foods or beverages is more rewarding than popping a pill-and you have to eat and drink anyway, so why not do something good?
"In addition, we're seeing a resurgence of antioxidant products (A, C, E) and the candy/snack field adding nutritionally sound products in an area nobody thought about some years ago."
-Raimund Hoenes, Ph.D., marketing manager, Roche Vitamins
"This is a fascinating time to be part of the nutraceuticals industry. As little as ten years ago, the industry was made up of a small number of innovative but undersized entrepreneurs and a small but loyal customer base. Today our industry is worth an estimated $10 billion, due in large part to the dedication of both large and small companies alike to producing safe, natural products backed by sound science.
"Unfortunately, as the industry grows, so does the possibility that some organizations may market questionable products with questionable health claims. This, and the industry's rapid growth, has put us squarely on FDA's radar screen and consequently, in the gun sights of the mainstream media.
"We risk our credibility with the public and the government if we continue to allow the actions of an irresponsible few to taint the conscientious many. We as an industry should spend what is necessary to tell these consumers, our customers and state and federal legislators what we're doing right, to tell them that DSHEA is working and to remind them that millions of people are enjoying better health as a result of our actions."
-E. Charles Brice, senior vice president, sales and business development, Kemin Foods
"The slowdown in the growth of the nutrition industry is accompanied by a shift towards higher quality. This trend is visible for supplement marketers as well as for raw material suppliers. As a leading raw material supplier you nowadays have to have (voluntary) FDA approval of your plant and you should adhere to cGMP pharma standards for the production of the active ingredients you are supplying to the industry. Furthermore it is absolutely important not only to sell the ingredients, but also to provide scientific support, support in technical and regulatory issues and to cooperate with customers in various marketing activities."
-Elmar Zurbriggen, director of marketing and sales, Lonza Ltd.
"We see a shift in demand for health benefits from supplements to food and beverage delivery vehicles as the lines between what are called foods, nutraceuticals or dietary supplements become more blurred. Consumers are looking for convenient and tasty ways to get the specific health benefits they are looking for.
"The manufacturer today faces increased competition on multiple fronts. Retail space is at a premium and it is becoming more and more difficult to compete for shelf space. Competition is fierce and it is increasingly difficult to give the retailer a point of difference.
"The success of our industry is a challenge that can only be addressed with a creative and innovative collaborative approach. Together, through education, we can continue to build strong product categories for a lasting healthy future of our industry."
-Marc Brucker, president, Nutratech
"The overall negative press received on items like St. John's Wort and the continued reluctance by the American medical community to embrace herbal products has made 2000 a difficult year for the industry. However, on a positive note, this has led to a worldwide effort to raise the quality standards of herbal extracts and herb powders. We expect the U.S. government to play a much larger role in the marketing of herbals. We also see increased interest in herbal products from pharmaceutical companies. This could bring new opportunities for the whole market and make the focus more on the quality rather than the retail price of the products."
-Allan Himmelstein, president and Dr. Ralf Spreemann, director of technical services, The Martin Bauer Group
"The bulk ingredients distribution industry is one of deep maturity, in which mass merchandisers are dominating a once-innovative field. With all the power concentrated among only a few manufacturers, mom-and-pop operations-traditionally more creative than corporate entities-are dwindling in number.
"As a result, consumers suffer from a decreased number of items from which to choose. Ironically, as consumers-especially health-conscious baby boomers-demand more options in nutritional supplements, they are getting fewer because mass merchandisers tend to offer a more limited selection, often only the best sellers.
"In addition, consumers tend to be wary of supplements due to the barrage of negative publicity from groups such as ConsumerLab.com. Some of these groups 'bad mouth' supplements without adequately testing them. That is doing consumers a real disservice."
-Gilbert Gluck, president/founder, Cyvex Nutrition
"The dietary supplement and functional food industries are in the midst of an evolution, from a 'wild west' of novel and sometimes untested dreams to a 'civil society' of standards and legitimate consumer concerns. The chain of responsibility starts with the raw materials supplier, joining hands with the formulation laboratory, manufacturer and retailer, to offer products of consistent high quality, well documented and supported by good clinical data. Along the way, mistakes will inevitably be made. But, as long as a high level of transparency is maintained, the consumer should be certain that this industry is serving our most important needs."
-Gary Brenner, director of marketing and business development, Solbar Plant Extracts
"Our observations in the last two years clearly show a trend towards using better bioavailable organic mineral salts rather than badly soluble inorganic minerals for the fortification of food and nutritionals. This trend is driven by the consumer, who has become more sensitive regarding quality, origin and bioavailability of mineral supplements. The focus in the nutritional market was clearly directed to calcium fortification, followed by magnesium and other essential minerals in the last few years.
"In general, high standard products produced under cGMP conditions with high purity, excellent microbiological quality and low content on heavy minerals will be the future in the organic mineral salts business."
-Ernst Guenther, global marketing manager, Boehringer Ingelheim
"The last year in the natural products industry could be characterized as the year of extremes-extreme claims and negative publicity, while on the other hand extreme advances in promoting health naturally. Looking ahead, we should continually strive to take better care of the quality end of business. Also, what I find most valuable for our industry's future is the continuation of steady, credible research and peer-reviewed science on natural products. This helps improve our industry's reputation by offering consumers proven, efficacious alternatives that they can feel confident taking."
-Nina Likins, director of marketing, Natural, Inc.
"While sales of MSM (and other joint care products) have remained strong, we have seen some incursion in the marketplace from unlicensed and off-quality material. This is particularly distressing with all of the emphasis on NNFA GMP's and product purity. Many major brands used licensed products like 'OptiMSM' but they are having to compete with other companies who are willing to risk all of the progress that we have made with consumers and FDA just to save a few cents. We just completed our GMP audit and are moving aggressively ahead with solid research, but the industry needs to realize that unless they support legitimate companies that are doing the testing and research to support their own future growth, then expect the industry to continue its sales and profit decline throughout 2001."
-Tom Haberer, director of sales & marketing, Cardinal Nutrition
"In our segment of the business, which is the cultivation and extraction of botanicals, it is clear that there is and will continue to be a consolidation of suppliers. It will become critical for extract suppliers to demonstrate that they can control product from the ground through the extraction process. Increasing safety regulations regarding microbiological and pesticide panels required by many governmental agencies will necessitate the need for a vertical supply chain. I believe many brokers without factory affiliations will find that they will not be able to compete in this environment. Testing standards and validated methods for standardized botanical extracts will continue to play an important role in our end of the business. The open exchange of testing methods between laboratories, suppliers and customers will continue to improve the quality and consistency of products that our industry, as a whole, delivers to the marketplace."
-Larry Martinez, president, USA NutraSource
"Probiotics will become one of the 'mega-trends' in the functional food and nutraceutical industries. However, at the present time, probiotics are a year and a half away from reaching mass-market status partly due to a lack of consumer education. Some fundamental issues driving the growth of this market include the demographics of a changing population, the emergence of alternative medicine and the movement toward self-care.
"What will be seen in the industry is much heavier marketing expenditures, mainstreaming of sales and marketing, increase in alliances, higher demand for recognized quality science, a big focus on proprietary intellectual property and high expectations from individual product launches."
-Jean Leclerc, sales manager, Institut Rosell-Lallemand
"Given the current erosion of industry growth, a strategic approach is critical to future success. Consumers, who once bought everything on the shelf, are becoming much more savvy and discerning. The twin keys to winning their confidence and business are quality and education. Companies must develop top quality, proprietary ingredients that are backed by solid scientific research and branded to differentiate themselves from imitators.
"Equally important, media and manufacturers must partner to educate consumers about brand-specific research and differentiate between those products and low quality ineffective knock-offs. Branded quality must retake the lead from price if we are to thrive and provide the health-enhancing products that consumers demand."
-William Seroy, president and Founder, InterHealth Nutraceuticals
"Last year, I predicted that there would be an increase in independent evaluations of dietary supplements to help consumers identify better products. While the forecast was correct, I can't boast prophetic powers because much of this work came from my company, ConsumerLab.com. Many things have come about as a result. Based on several hundred messages, I know that consumers, healthcare providers and retailers are breathing a sigh of relief to have this information. They have also expressed increased comfort with those products that have passed independent testing. In fact, in the past six months alone, more than 20,000 people have voluntarily signed up for ConsumerLab.com's e-mail list to be informed of new results. I also know that many manufacturers have become more discerning regarding raw materials, manufacturing practices, label claims and product standards.
"What's ahead? The independent quality testing initiative will certainly continue and encompass all types of supplements sold. It will also extend into other areas of nutrition, such as fortified and functional foods, as well as fortified topical/cosmetic products. There will be increased focus on the purity of products, such as lack of pesticide contamination. Also, now that they know it exists, consumers, healthcare providers and retailers will be seeking more information about product quality and begin looking for specific seals of approval on products.
"As consumers gravitate toward approved products there is likely to be a 'quality consolidation' in the industry. Manufacturers of approved products will profit from increased sales due to increased product loyalty and recommendations. Such products can also be premium priced. Furthermore, because higher quality products are more likely to work, consumers will be more likely to re-purchase products that, in the past, they may have stopped buying on account of quality-related ineffectiveness."
-Tod Cooperman, president, ConsumerLab.com
"I think this year has been particularly interesting because along with all of the Internet stocks falling from the sky, you have seen a lot of supplement stocks mimicking the trend. A few months ago it was a great time to be selling your company, but today people are finding that they cannot get what they could have earlier. While the food sector still has some value in it, valuations will start to calm down soon. Going forward, to maximize value, companies are going to need to change their attitudes about science and scale. I feel the big players will be inherently worth more and the reputable players' valuations will not be nearly as volatile. The key is to become a $500 million company and not have Dateline doing exposés on your company."
-Adam Ismail, analyst, Health Business Partners
"From a regulatory perspective, this year lacked the significant victories of 1999. Indeed, FDA even won its appeal in the Pharmanex case. However, confusion still reigns. For instance, it is still not clear when a particular structure/function claim would be considered an impermissible disease claim by FDA. In this regard, many of the agency's courtesy letters to various companies seem to be in direct contradiction with the preamble to the agency's final rules governing structure/function claims. Moreover, FDA still has not addressed the issue of structure/function claims for functional foods except to indicate that such claims must be based on the nutritive value of the food. In short, another year has passed and still there is no clear guidance from the agency regarding the type of claims that it will considered permissible.
"On the other hand, FTC has stepped up its effort to police the supplement industry. Several dietary supplement companies have entered into consent decrees with FTC over the last year and all indications are that FTC will continue to pressure industry to ensure that the claims being made for dietary supplements are truthful and nonmisleading."
-Todd Harrison, senior associate, Keller & Heckman
"2000 has been the year where the present pain of languid sales finally exceeded our fear of risk of change. The change needed is a cleansing of the dietary supplement industry, beginning with our sense of guiding values and specifically taking a hard look at our commitment to quality and integrity of products and benefit statements. The present commercial malaise won't end until we address these fundamentals:
- New products that add new value to interested but wary consumers.
- Quality products that deliver what they promise.
- Returning the price/value equation to consumer buying decisions.
- The support and goodwill of opinion leaders, including health professionals and the media.
"We can no longer wrap ourselves in the political victory of DSHEA as an excuse for failing to meet our most basic obligations to our consuming public. We have consumed most of the available oxygen and must now invest heavily in research and development, meaningful analytical standards, self-regulatory practices and meaningful public relations efforts.
"Natural health and self-care remains one of the most compelling and promising consumer markets, but this potential can only be realized by accepting the responsibility of being the leading provider of healthy lifestyles, products and services to a willing but worried public."
-Loren Israelsen, president, LDI Group
"For the first time since the Federal Food, Drug and Cosmetic Act (FFDCA) was passed in 1938, industry has led regulators in directing the future of the emerging category of health-related food products. FDA has done a good job of attempting to address many of the spill-over issues that persist in the drug-versus-food-versus-dietary supplement definitional arena.
"The FFDCA nonetheless begs for amendment. The traditional food/drug distinction simply does not work with proliferating matrices into which health-promoting or disease-preventing ingredients are being injected.
"While the U.S. leads other nations in the evolution of the dietary supplement category under DSHEA, countries such as Japan and Canada have taken bold moves toward the recognition of nutraceuticals and functional foods. At the same time, the EU has adopted a protectionist stance, falling back on non-scientific safety determinations under the 'precautionary principle.'
"The Internet and the growing multinationalization of these products will probably bring some worldwide consensus, although if the Codex proceedings are any indication, it may take some time for a definitive consensus to emerge. In the meantime, the category will continue to expand, in part because the Internet will carry information and product expansion that consumers on all continents are demanding."
-Scott Bass, partner, Sidley & Austin
"The experience of the last year in Japan is yet another confirmation that the future of nutraceutical ingredients and functional foods in Japan is very bright. Retail sales of the increasingly-popular Foods for Specified Health Use (FOSHU) are up significantly, by nearly 50% according to some estimates, and the number of approved FOSHU products has increased by another 30% to a total of 194 foods. This is a clear indication of the growing consumer interest in foods with healthy 'functional components' and with on-label health claims endorsed by the important Japanese Ministry of Health and Welfare. More growth in the category can be expected during the coming year also, primarily as a result of the conversion of popular non-FOSHU foods to FOSHU status."
-Ron Bailey, president, California Functional Foods
"The Canadian supplement market has been flat the last 12-18 months with some growth but at the much-reduced rate of 6-8% annually. Competition in mass market outlets has intensified with the entry of such companies as Rexall-Sundown, as well as greatly expanded 'house' brands in most major chains. Natural food stores are feeling the heat now that such a wide variety of supplements are readily available in mass outlets and 2000-2001 could be a pivotal year for many independents.
"The regulatory environment has not changed, although the new Office of Natural Health Products is expected to start bringing forth new regulatory criteria for supplements in the middle of 2001. With consumer interest remaining high, the category should continue to grow but where the consumer will be purchasing these products could take a dramatic shift."
-Bill Reynolds, President, Reynolds & Associates
"The industry today faces compelling challenges from our regulatory agencies and part of the blame lies at our doorstep. Demonstration of the benefits of our products is difficult at best. Even with information to give the consumer, we are progressively unable to communicate it to an increasingly skeptical consumer. This situation comes from several regulatory actions and the continuous barrage of negative publicity. Our inactivity and elusion of issues in the recent past good times resulted in this state. Abundant opportunities to proactively engage in the process remain. We simply must avail ourselves of them. Y2K set the stage for this industry to either engage in action or face a stern future."
-Jim Lassiter, principal, The Lassiter Group
"The international market for supplements as well as functional foods is still far from being harmonized. Between the U.S. and various European nations, different substances are allowed, different claims are possible and different regulatory routes are required. Today it is practically impossible to market the same product with the same label around the word. We see this changing especially in Europe, where the markets move faster than the regulations.
"In many countries supplements are sold in 'gray markets' and mail-order and Internet sales are growing as consumers overcome national restrictions through new trade channels. Intelligent marketing sees today the openings of tomorrow, to be among the first with new strategies for the internationalization of their products."
-Joerg Gruenwald, president, PhytoPharm Consulting
"The industry as I have seen it this past year could best be described by two characteristics: frustration on the part of the ingredient suppliers and caution on the part of the marketers. I've seen a lot of 'bio-active ingredients' being pushed by chemical and food ingredient companies whose perspective has essentially been, 'We've got a lot of this left over after we finish processing something else-surely someone must want it.' The marketers have been in retreat for two reasons: FDA's recent ridiculously restrictive proclamations and the disappointing sales of Benecol, Take Control and 'Ensemble.'"
-Bob Jones, managing director, Functional Foods LLC
"The most significant area of interest currently in Canada concerns regulatory initiatives underway by the newly established Office of Natural Health Products and by Health Canada to allow health claims on natural health products and foods. Even though the Canadian health food and supplement industry has been experiencing considerable growth over the last few years, the industry lags behind the U.S. in terms of development and marketing. In part this has been attributed to a very restrictive regulatory environment as the Food and Drugs Act in Canada does not deal specifically with natural health products and functional foods. These products are currently considered as either foods or drugs depending on the type and concentration of the active ingredient and whether health claims are made. It is hoped that proposed regulatory changes will have a positive impact on the Canadian industry as the development and supply of these products represents an opportunity to expand and add value to many areas of the economy, of most significance, the agricultural sector."
-Kelley Fitzpatrick, president, Saskatchewan Nutraceutical Network
"More than three out of four consumers today believe that there are active components in foods that can enhance health and prevent disease. They find nutritional solutions to health concerns highly believable. These consumers, especially 40-50 year old boomer women, are and will continue to drive mainstream opportunities in the functional/nutraceuticals category. Manufacturers and marketers need to enable these gatekeepers to self-prescribe for themselves and their families. Knowledge-based marketing strategies will be key to success in this consumer driven market."
-Linda Gilbert, president, Health Focus
For industry development a sound regulatory framework is needed. In the course of this year the EU Commission has come up with proposals for new directives for food supplements and fortified foods. These proposals are based on the 'Upper Safe Level' nutritional paradigm rather than the former 'Deficiency' paradigm. As such, the EU Commission is favoring a more liberal approach, leaving more room for industry but also for consumers to make their own informed choices.
"As part of a consulting consortium, I have assisted the EU Commission in carrying out a pan-European study on nutritional, health and ethical claims. The study, which was presented to the EU Commission in mid-2000, clearly shows that claims must be better regulated at the EU level. The Misleading Advertising will require amending as well as the Nutritional Labeling and Food Labeling Directives. The EU is expected to tackle these issues before the summer of 2001. Given the various developments in Codex and many other organizations, I expect the amended directives to allow the use of generic health claims, enhanced function claims and disease risk reduction claims given various provisions. Pan-European claims will eventually be part of pan-European brands."
-Tage Affertsholt, president, 3A Business Consulting
"This year has been a year of reflection by manufacturers, especially on what products and benefits are meaningful to consumers. The science is there, in many cases, but the winners are those that will do great marketing, communicating those benefits to consumers in a meaningful way. I think we will continue to see products that are 'evolutionary' as opposed to 'revolutionary.' Soy and calcium in functional foods will continue to be big, as consumers understand the benefits there. Companies will continue to put more structure/function claims on foods, as FDA continues to drag their feet with respect to opening up health claims."
-Mary Mulry, Ph.D., president, Foodwise, Inc.
"Driven by demographics and DSHEA, the nutraceutical market continues to grow at three times the rate of conventional foods. The growth continues despite negative press and recent aggressiveness by FDA/FTC. "Mergers (Kraft/PowerBar) and partnering (Heinz/Hain Foods) provide instant market share. Big pharma (Bristol Myers, SKB, J&J) enters non-drug markets pioneered by the dietary supplement industry, e.g., joint health, cholesterol lowering. Foreign corporations such as Numico, Novartis and Nestlé are powerhouse players in the U.S. nutraceutical market. Natural health food supermarkets are booming with many new stores being opened. Despite the competition, the number of health stores has not decreased."
-John Cassens, president, Cassens Consulting
