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    Columns

    Nutraceuticals Multiverse: The Value Chain Gang: Quantum Leapers

    What if the norm was for active nutritional ingredient manufacturers to launch and grow their own consumer brands?

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    Anthony Almada11.01.10
    Location: Multiverse Business Week multivision broadcast, 1 January 2011.
     
    David Marcus, News Anchor: “Good evening and welcome to the first edition of MBW for the New Year. 2010 was a fascinating year in business across the multiverse. In today’s first segment, our own Jacques Villeneuf profiles a unique value chain shift, from Earth.”
     
    Jacques Villeneuf, investigative reporter: [Video background roll footage of assembly line of computers] “Every household and multiversal transporter has them: computers. They guide every action of the artificial intelligence around us. But have you noticed a new brand of computers? [Image of Artel Corporate headquarters] Surely five years ago you noticed the Artel Around logo, the heart of your home, work or communications computer.
     
    “Artel built a business around making and supplying computer processors to the leading computer manufacturers of the multiverse. Last year, Artel quantum leaped the value chain and launched its own brand of computers, marketed directly to consumers, schools and businesses, and the rest is history.
     
    “This ostensibly precarious tactic has only boosted Artel’s processor business—by 14%—while their computer sales hit $150 million in the last three quarters of 2010, with projected revenues surpassing $295 million this year. But this is not unique to Artel and computers. In the consumer healthcare space the companies that have been the prime innovators are now extending primary invitations to consumers to try their own brands—straight from the laboratory or manufacturing facility.
     
    “More than 125 years ago Dutch Metallurgical Sciences, or DMS, began from literally the Earth’s roots, as a mining company. It has evolved into one of the biggest nutritional ingredient manufacturers on Earth—through both inorganic and organic growth. Last year the company wrestled with and ultimately embraced a shape-shifting strategy: The existing nutrition finished goods brands aren’t embracing our ingredients, science and intellectual property. We will take it directly to the consumers. And so was birthed three finished goods brands, designed for condition- and disease-specific-minded consumers [images of brand trio]. Three years ago we interviewed one of the co-CEO’s of DMS on this show. Here is what he had to say:
     
    [Archive video footage of Jan Vanderstoop, co-CEO, DMS]: “We are an ingredient manufacturer that allocates a significant amount of human and financial capital to creating, acquiring, validating and insulating the best nutritional ingredients for human and animal health. Our consumer is the national, multinational or multiversal brand, not the end user. Admittedly, we don’t want to, nor try to, connect with the end user. We assign that task to the finished goods brand. Our task is to offer the marketer the best ingredients for their products.”
     
    Jacques: “Quite a change of strategy. It is still too early to tell as to the success of this strategy, and its impact on DMS’s ingredient business. We were not granted an on-camera interview. However, a spokesperson for the co-CEO told us that, quote, “’Our ingredient business continues to thrive and we are pleased with the success of the ‘my’ branded products, including ‘myViz,’ ‘myCirc’ and ‘myBend.’”
     
    “On a closing note: when one of Earth’s biggest food ingredient companies—Stargil (still privately held)—does the same thing as DMS, introducing its own natural, non caloric sweetener [flash of image of ‘NuVina’ multi-serving bags and single-serving sachets] we have to ask: is this a trend that will beget many more followers, especially in this age of digital shopping and finished goods brands that are unwilling to pioneer the ingredient innovations of others more consumer-distant on the value chain? This is Jacques Villeneuf for MBW, on Earth.”
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