2010 Forecast Article
- 1. NMR News: Volume 2, Issue 8, Nov/Dec 2009 WHAT’S NEXT FOR DIETARY SUPPLEMENTS: NMR’S OUTLOOK ON INDUSTRY FOR 2010 By: Latesha Richards, Marketing Coordinator The opportunities for dietary supplement and functional food companies to brand and differentiate their products and be more innovative are limitless moving forward into 2010, as more consumers embrace better nutrition and healthier lifestyles. Products that can be perceived as those that bring value to the everyday lives of consumers will do exceptionally well against competition. Nutraceutical Medical Research, LLC (NMR) foresees that companies that can provide proof of effectiveness backed by strong scientific and clinical research will win consumer/customer loyalty. Outlined below are examples of key industry players and concepts that will likely seize market leader positions in 2010 as companies continue to make science and clinical substantiation the main focus. 1. BRANDED INGREDIENTS: It’s all about branded ingredients in 2010. Major branded ingredients like Pycnogenol® (Horphag Research), Resveratrol® and others with a strong supporting body of scientific and clinical evidence will continue to grow tremendously next year. As clinical research evidence points strongly to condition- specific benefits and efficacy in areas such as cardiovascular health, antioxidant and inflammatory health benefits, many more natural product manufacturers who want to meet consumer demand will be drawn to using these ingredients in newly developed or reformulated dietary supplements. Be prepared to see these ingredients added to more 1
- 2. NMR News: Volume 2, Issue 8, Nov/Dec 2009 functional food and beverage formulations as well. The ingredients that show antioxidant properties, most notably vitamin C, vitamin E, tocotrienols, α-linolenic acid, kiwi seed oil for its omega 3/vitamin E/water-soluble antioxidant composition, which are all thought to be highly beneficial against aging and wrinkles are being incorporated into functional beverages and foods and positioned as “nutricosmetic” products. High-quality, Generally Recognized As Safe (GRAS) status and wealth of supporting evidence will continue to be the characteristics manufacturers seek when choosing an ingredient to add in their formulations. Consumer-targeted ingredients that are branded will continue to attract consumers looking for safety, quality, and uniqueness. Consumers will be reminded of the value of the product when those characteristics are emphasized and proven with solid clinical research data. 2. CONDITION-SPECIFIC SUPPLEMENTS: Committed dietary supplement users choose supplements based on their naturally intrinsic value or value from added ingredients. Condition-specific supplements that target eye, cardiovascular, joint, bone and even brain health will continue to see growth among consumers looking for a trusted name on product packaging. Condition-specific supplements in particular with a combination of ingredients, proprietary or non-proprietary, that have claims substantiated by clinical research, a clear list of ingredients and dosages on product labels, and are efficacious in improving quality of life, will continue to present a highly convincing 2
- 3. NMR News: Volume 2, Issue 8, Nov/Dec 2009 alternative to prescription medication going forward into 2010. To gain loyalty, product manufacturers must see to it that they are delivering an effective dosage or bioactive amount of ingredients in their formulations. Proprietary Nutritionals Inc.’s GynDelta®, a 100% whole cranberry supplement for urinary tract health and Sytrinol®, a citrus polymethoxyflavone (a flavonoid from citrus juice) and palm oil tocotrienol combination for maintaining healthy cholesterol, for example, are supplements with strong scientific and clinical backing that can clearly be differentiated from their pharmaceutical counterparts as having a better quality of life profile, safer, and preventative while being efficacious and of high quality, and from their generic equivalents. Consumers will perceive value in a product with clinical backing. Retailers are highly attracted to carrying brands that have condition-specific benefits that are in high consumer demand. Condition-specific product manufacturers will continue to reap the benefits of having either a brand name that consumers can recognize and trust or a non-branded ingredient that has proven efficacy. On this note, look out for more companies to use branded or non-branded ingredients with tons of research in their formuations. 3. FUNCTIONAL FOODS & BEVERAGES: Functional foods and beverages will continue to gain tremendous popularity among consumers looking for inexpensive ways to gain specific benefits or overall wellness, but as mentioned above, look for more functional food and beverage companies to launch or re-formulate products using GRAS 3
- 4. NMR News: Volume 2, Issue 8, Nov/Dec 2009 and scientifically-backed ingredients in 2010 to position themselves to gain competitive edge. To meet consumer demand, beverage manufacturers and soft drink companies have trended towards fortifying their beverage formulations with value-added ingredients (proprietary or non-proprietary). Most recently in 2009, Minute Maid® announced its Enhanced Strawberry Kiwi juice drink with yerba mate extract. Preliminary scientific and clinical studies of yerba mate seem to suggest natural stimulating properties and energy enhancement benefits from the naturally high amounts of caffeine. Beverage companies like PepsiCo and the Coca Cola Company both jumped on the stevia bandwagon in 2008. In May 2008, Coca Cola teamed with Cargill to launch their version of stevia called Truvia.™ In January 2009, Coca Cola launched Sprite Green®, a soft-drink made with Truvia.™ In July 2008, PepsiCo launched a stevia- based all-natural zero calorie sweetener, called PureVia™ (Whole Earth Sweetener Co. LLC) into their “SoBe” Lifewater brand. In May 2009, Tropicana launched its new Trop 50 orange juice with PureVia™ claimed to have half the calories of regular orange juice. Stevia comes from the leaves of the species Stevia rebaudiana (South America) and is known for its natural sweetness, no calories and its ability to maintain healthy blood sugar levels. Stevia was GRAS approved in December 2008. By 1st quarter 2009, these stevia brands already made their way in kitchen cupboards across the U.S. 4
- 5. NMR News: Volume 2, Issue 8, Nov/Dec 2009 Sports nutrition beverages like ABB Speed Stack, Twinlab Ripped Fuel have incorporated Advantra Z® (Nutratech Inc.) into their formulations. Advantra Z® is a patented bitter orange ingredient claimed in clinical studies to stimulate thermogenesis (heat production) and metabolic rate for weight reduction, and to improve athletic performance. Companies will also continue to make functional foods and beverages with healthy nutrients and ingredients that meet the needs of consumers day-to-day lifestyle. Fun to eat foods such as pasta, pizza and bread are being fortified with probiotics, as these “good” bacteria are beneficial for digestive health and associated gastrointestinal conditions. Foods such as baby food are being fortified with omega-3 DHA. As more research is being conducted on it and baseline dietary intake references are established, more companies will include omega-3s into their formulations. Preliminary evidence for fish-derived omega-3 DHA fatty acids suggests that they provide heart health benefits as well as cognition and brain development health in young children. Whether the product is a functional food or beverage, the quality and evidence supporting the inclusion of specific ingredients in formulation will matter most to consumers. 4. EDUCATION: In 2010, education will be a major initiative taken by most branded ingredient and finished supplement companies targeted to consumers and customers. 5
- 6. NMR News: Volume 2, Issue 8, Nov/Dec 2009 Education of evidence, quality and safety is very important because it reminds consumers and customers of product attributes, value and why the brand is different in the first place – concepts needed to drive purchase behavior. Empowering Consumers: For the most part, consumers represent a large portion of revenue for companies, so the most dollars will be invested in educating this group. There are two types of consumer stakeholders in the supplement industry – traditional healthcare consumers and regular supplement users. Traditional healthcare consumers are consumers who are typically satisfied and compliant with the traditional healthcare system.1 This group, however, have become more open to seeking wellness alternatives. They desire more natural care and better quality of life from self-care and complementary brand use. They are actively seeking more information about nutrition from due- diligence efforts and dietary supplement users before making any purchase decisions. Despite available scientific literature, traditional consumers are still eager to learn more about dietary supplements and how they can benefit from them. On the other hand, committed dietary supplement consumers know what they benefit from the most. They are trending towards dietary supplements, functional foods and beverages that offer intrinsic health benefits or benefits from value-added ingredients. Consumers are demanding the most up-to-date and easily understood information that is relevant and sufficient. Educating them about looking for scientific and clinical validation will be important as a means for them to and differentiate price and quality value among 6
- 7. NMR News: Volume 2, Issue 8, Nov/Dec 2009 competitors. Companies have the opportunity to educate these market segments on the clinical evidence and remind them of brand quality, safety and uniqueness – attributes that all point to value. The overall idea is to connect with the consumer by empowering them with the information they need and want to make the right decisions. Product Manufacturers: Product manufacturers will continue to be extremely attracted to ingredient suppliers who can provide insurmountable evidence for their ingredients. Although product manufacturers are less emotionally driven than consumers, they value scientific and clinical data so much so that it will drive their decision-making and purchase behavior. As consumers are demanding more value for their buck, product manufacturers will continue to want to use ingredients that have been tried, tested and proven to maintain consumer loyalty. Education of evidence will be the key to winning over this market. Retailers: Similarly, retailers who have been educated on their products and have easy access to supporting scientific and clinical data will find that responding to consumers’ inquiries will be a lot easier. Medical Professionals: In addition to consumers and product manufacturers, medical professionals represent a growing stakeholder of dietary supplements and complementary and alternative medicine (CAM), for their own personal use and recommending them to their patients. 7
- 8. NMR News: Volume 2, Issue 8, Nov/Dec 2009 A market research survey published in Nutrition Journal in 2009 reveals data on physician and nurse use and recommendation of dietary supplements. The survey, conducted with 900 physicians (including PCPs, OB/GYN and other specialists) and 277 nurses across the U.S. in 2007, found that 79% of physicians and 82% of nurses recommend CAM. 51% of physicians and 59% of nurses regularly use dietary supplements and a large proportion of each group recommend supplements to their patients (85% of physicians and 84% of nurses). Of those who recommend CAM, 41% of physicians and 62% of nurses recommend supplements for overall health and wellness, and a sizeable proportion recommend them for condition-specific reasons like bone, joint, heart, immune health, musculoskeletal pain, energy, and flu or colds.2 We predict that these figures have trended upwards for 2008 and will continue to increase for 2009 and beyond. The survey also reveals that physicians and nurses had no prior education or training about dietary supplements and CAM, but did express interest in continuing medical education. Although the study did not gauge specific types of dietary supplement or CAM recommendations, a huge opportunity exists for finished dietary supplement manufacturers to capture the healthcare professional market with information about specific products. Healthcare professionals are more likely to recommend certain brands to their patients if they have been won over by strong scientific and clinical research. 8
- 9. NMR News: Volume 2, Issue 8, Nov/Dec 2009 CONCLUSION 2009 was the year of what apparently was the start of a changing clinical substantiation environment, thanks to both FDA’s final guides on claim substantiation early this year and FTC’s revised guides on advertising made effective on Dec 1st. But given the not-so- coincidental timing of these guidances, clinical research and claims substantiation will have new implications for new product launches, reformulations and even those currently on the market. Those companies that have not performed clinical research will have the opportunity to familiarize themselves and change gears in 2010. As the traditional healthcare landscape is changing quickly, and more consumers opt for complementary care, expectations of dietary supplement companies will quickly change. Traditional healthcare consumers will be demanding more information about product efficacy, safety and quality, while regular users will be demanding more naturally intrinsic value from supplements and more lifestyle brands to be fortified with nutritional ingredients. Both perceptions of value, though, rests on the assurance that the products will do what they purport. Branded ingredients and finished products with overwhelming evidence will continue to outpace their raw commodity and “me too” generic competition with a lack of such evidence. As the industry becomes more consumer driven, companies will look to differentiate themselves in consumers’ minds by using proven ingredients or engaging in clinical research to make specific claims about their product’s capabilities. 9
- 10. NMR News: Volume 2, Issue 8, Nov/Dec 2009 Can your brand(s) compete in 2010? Do your products have the evidence it needs to be innovative and advance in this changing market? Contact NMR for a free consultation. About NMR: Nutraceutical Medical Research, LLC is a premier contract research organization dedicated to substantiating your product's claims with clinical research. Our medical writing services include journal publication, brochures and review papers. Our goal is to partner with you to help establish the efficacy and safety of your products using an evidence-based approach. We can be reached at (914) 220-8325 or info@nutraceuticalmedicalresearch.com. REFERENCES 1. 2009 Survey of Health Care Consumers: Key Findings, Strategic Implications. Deloitte Center for Health Solutions. Accessed on December 1, 2009 at: http://www.deloitte.com/assets/Dcom- UnitedStates/Local%20Assets/Documents/us_chs_2009SurveyHealthConsumers_March 2009.pdf 2. Dickinson, A, Boyon, N, Shao, A: Physicians and nurses use and recommend dietary supplements: report of a survey. Nutrition Journal 2009, 8:29. Also available at http://www.nutritionj.com/content/8/1/29 accessed on November 30, 2009. 10