In the crowded retail space, everyone is looking for that boost that will help them stand out. Enter branded ingredients. “Working with a branded ingredient can really help manufacturers with so many different aspects,” says Elyse Lovett, marketing manager for Kyowa Hakko USA, “including quality, transparency and marketing support.”
Branded ingredient suppliers are the drivers of nutrition science and technology innovation, and as such hold keys to industry growth, adds Lauren Clardy, VP branded ingredients, AIDP. “Branded suppliers have been the early adopters and voluntary enforcers of the quality and safety standards for our industry. On the clinical research side, branded suppliers lead the industry with innovative clinical models, and analytical tools to show the nutritional and clinical efficacy of the ingredients and the products that incorporate them.”
Using AIDP as an example, Clardy sums it up: “AIDP’s success is grounded in our depth of experience and commitment to strong science for functional food, nutritional and beverage product development. All these drivers: clinical research, science, intellectual property and quality/safety standards, not only benefit the industry as a whole but ultimately benefit the consumer. Branded ingredients have raised the bar overall.”
That can all translate to sales. “Just as individual finished products can increase in popularity,” says Mallory Junggren, senior director of marketing at Nutrition 21, “so can a branded ingredient. If a specific ingredient has garnered a level of popularity, companies with finished goods may benefit from that preexisting demand, helping to drive their sales.”
Tim Hammond, VP of sales & marketing, Bergstrom Nutrition, says, “Data reflects that products containing branded ingredients inspire consumer confidence and increase customer retention, leading to improved sales and higher margins.”
That said, many factors must be considered when deciding which partnerships to make. “Ingredients can be complicated,” acknowledges Shaheen Majeed, president worldwide, Sabinsa. “The selection of ingredients for product formulations impact—and are impacted by—all aspects of a company. Managing supply chain challenges, short-term profits versus long term investment, health care professional approval, regulatory compliance and consumer expectations all merge in this one choice.”
Here, a closer look at the benefits of branded ingredients—and potential pitfalls to consider.
“It is so important when manufacturing a product to make label claims that are substantiated and have proven research to support them,” says Lovett. “Kyowa Hakko’s ingredients are made from an innovative fermentation process to ensure the very best quality and purity.” What’s more, she continues, “Our branded ingredients are backed by healthy human clinical studies to ensure manufactures and consumers of the efficacy and safety of what they are receiving.”
Understanding how and why an ingredient works by performing biochemical analyses, then graduating to animal in-vivo trials, then human clinicals, tells the full story—and that’s important, adds Annie Eng, CEO, HP Ingredients. “We don’t rest on [our] laurels. We continue to re-invest in new research so that the body of evidence grows and remains current.”
Overall, maintains Clardy, long-term sustainable growth has not been in commoditized products, but in branded ingredients and clinically researched bio actives. “At AIDP, we realize the importance of science in strategic promotions. Consumers are now asking and demanding good clinical research and premium ingredients because of their standardization, composition, quality and safety. Consumers are better informed, and with the internet and social media platforms, a ‘need to know’ the science behind dietary supplements has grown exponentially as a source for health and wellness choices.”
Branded ingredients invest in marketing support due to the investment required on the research side, Clardy points out, and that benefits everyone from the brand partner to the retailer and the consumer. She adds that AIDP has an extensive research-based portfolio with over a dozen branded ingredients.
This is also a plus for customers who utilize Nutrition 21 ingredients; Junggren says they gain access to a unique marketing tool: “An inventory of scientifically backed claims—or CARSE substantiated claims—that can be used in their marketing materials whenever they incorporate any of our ingredients into their finished goods. These claims have been reviewed and approved by independent science experts, so they essentially provide our end customers with validated benefits and end points they can use to better position and market their products, without overpromising.”
That, Junggren stresses, is extremely important when considering the development of a product or reformulation. “You never want to overstate efficacy without scientific substantiation—or you may have a lot of unhappy customers on your hands.” She adds that over the course of 30 years, Nutrition 21 has developed and launched a suite of dietary ingredients that are backed by clinically substantiated claims. Among the offerings: Nitrosigine (which is composed of bonded arginine silicate and, Junggren says, safely enhances energy levels and boosts mental acuity) and Velositol (a proprietary amylopectin chromium complex that formulators can add to protein products to help enhance muscle protein synthesis).
Sabinsa’s Majeed points to another benefit: “The supply chain for commodities remains problematical, particularly with traceability, but branded ingredients engender trust because they are inherently more substantial. More often than not, branded ingredients are supported by Intellectual Property in the form of research and patents. Because so much is invested in a branded ingredient, suppliers go to great lengths to deliver consistent quality.”
2) Quality & Compliance
Top suppliers of branded ingredients aim to go beyond simply supplying. At Deerland Probiotics & Enzymes, Sam Michini, VP of marketing & strategy, explains, “Both probiotics and enzymes are complex, especially the former as they are living organisms. To ensure product viability, we have a product development team that can formulate a wide range of fully customized supplement products containing enzymes, probiotics and prebiotics blended with companion botanicals and nutraceuticals. We are a start-to-finish provider—we can contract manufacture custom enzyme formulations, including encapsulation and tableting and coating, bulk powder, as well as labeling and bottling, and ensure the formula is fully compliant with FDA regulations.” Add to that consistent investments in research to reveal and/or validate mechanisms of action and efficacy for label claims and numerous certifications of quality (Michini lists Non-GMO Project Verification, Kosher and Halal status for the company’s branded ingredients DE111, ProHydrolase, PreforPro, Dairylytic and Glutalytic) and you get a clearer sense of the full-spectrum benefits of branded ingredients.
At Euromed, Woodman says, “Our firm has seven industrial certifications and we perform a minimum of 20 laboratory tests on each production batch, from the raw plant material to the final extract. We recommend marketers display our Phyto-Proof logo on their label to communicate the quality of the ingredient(s) used and distinguish from other price-oriented products.”
Earning that distinction doesn’t come easy. Hammond says Bergstrom Nutrition’s OptiMSM has a reputation for its purity, safety and consistent quality, but it took work. “Bergstrom Nutrition has committed more than 30 years of consistent efforts to build the brand—through ensuring safety and quality—for the benefit of our manufacturing customers and the consumers who use OptiMSM.” And, he adds, “Our recent announcement that shipments of OptiMSM will feature the Informed-Choice logo is another example of how to further a commitment to quality, consistency and safety.”
Yet another plus that can help ensure the quality of what lands on retail shelves, as noted by Sabinsa’s Majeed: “We take action against companies that infringe on our patents, which protects the brands that contain our ingredients. Additionally, we speak out, loudly, when we see something wrong, such as curcumin being adulterated with petroleum-based synthetic that is not revealed on labeling. We have each lot of our curcumin Carbon 14 tested to assure it is of natural origin.”
3) Traceability & Transparency
Consumers increasingly want traceability in the ingredients that are in their supplements. Notes Woodman, “Some ingredients have superior traceability, quality and efficacy, but not all do. Euromed prides itself on conducting efficacy studies on its branded ingredients to support the potency of its products. Efficacy studies can result in approval by health professionals and reduce negative feedback that supplements don’t provide a health benefit to consumers.” To help with traceability, he adds, Euromed communicates the origin of the plant material and its extraction facilities in Spain on its website, www.euromedusa.com.
Lovett also points to transparency. “We are moving into an era where consumers really want to know where their ingredients are sourced from, the quality and information on the research. Including branded ingredients gives manufacturers tools to educate their consumers on their ingredients and consumers transparency in the qualities they are looking for in a product.”
That is a significant postive. “Being able to backup the benefits of your ingredient with sound clinical evidence, at least in my opinion, is paramount—especially in an industry like dietary supplements and nutrition, where transparency is not always present but is of the utmost importance,” contends Junggren. “As consumers become more and more dialed-in and educated about what they are putting into their bodies, having that substantiation to support the efficacy, or at the very least, the safety of a product is very important.”
To ensure a company is investing in a quality ingredient and a quality provider, consider how much attention that company is paying to their quality assurance department, regulatory guidelines and research and development protocols, according to Junggren. “If quality is absent at the ingredient level, there’s no way that the final product can deliver on the payout it promises.”
Bergstrom Nutrition, Hammond says, makes OptiMSM exclusively in the USA, and manufacturing it in a dedicated cGMP-compliant, ISO-registered facility help provide transparency and traceability. “The investment we’ve made in science and the safety supporting our GRAS-designation inspires consumer confidence and increases customer retention, which in turn leads to improved sales and higher margins for our manufacturing customers,” Hammond notes. “We are also committed to ongoing investment in research that furthers the understanding of MSM’s efficacy, safety, applications, and mechanisms of action. All of this, combined with a commitment to customer service and a dedication to continuous improvement on both the technical and customer support side, delivers branded value to any product.”
Another thing consumers are increasingly seeking: sustainability. Eng says HP Ingredients ensures true sustainability of the natural resources and supporting the communities that cultivate those resources. “For example, in Malaysia, we continue to support the Orang Asli communities by hiring only the Orang Asli to collect Tongkat ali from the rainforests, and we likewise continue to employ the Mapuche Indians in Chilean Patagonia to collect maqui berries for us. In tandem, we also practice fair trade by paying the Orang Asli, Mapuche Indians, and organic farmers in Italy and India fair prices for their efforts.”
4) Education & Marketing
As demonstrated above, the ingredients and the company itself often have other virtues that establish trust and credibility. And as Majeed notes, educating on these factors can set a brand apart. “For example, Sabinsa has an extensive fair-trade cultivation program with thousands of small farmers. In return for a fair return on their crop, the farmers get training in good agricultural practices and improvements to their community infrastructure. We also distribute the research on our products widely, from press releases to trade press to hosting Sabinsa On Wheels, a program where we spend a day educating customers about the research on our branded ingredients. This helps them with formulation and with marketing product benefits. Many of our branded ingredients have their own websites with extensive information, such as CurcuminC3Complex.com and LactoSpore.com.”
As part of the marketing strategy at Nutrition 21, Junggren says, “we dedicate a significant amount of time and energy around educating the consumer, as well as the manufacturer/formulator, about the benefits of our ingredients. We find that the better understood our ingredients are, the more likely consumers are to actively look for products containing them.”
Michini also points to the difference this makes. “Brand marketers that use our probiotic and enzyme branded ingredients have full access to the research and other ways we can be of assistance to educate their retail network and thus, the retailers’ customer bases. And, as we are at the forefront of what is happening in the research community and the latest findings, we can serve as a clearinghouse of quality new information that may be of impact to probiotic and enzyme products.”
This, he says, is more important than ever because of the access that consumers have to information on the internet. “Much of it that they take as gospel may be wrong, and they will take this misinformation to retailers. Therefore, ethical branded ingredient suppliers are more willing to work with the brand marketers and also retailers to ensure that misinformation isn’t spread. This helps drive sales as stressing continual product education creates the ultimate trust among consumers.”
Cautions to Keep in Mind
“Choosing a partner that can co-develop with a manufacture is always a plus,” says Lovett. “An ingredient supplier that knows the market, outlets and product can really be of great help to provide unique concepts to the manufacturer from a marketing standpoint. I also think it is critical to look at how an ingredient manufacturer raises awareness of their own brands. Getting consumers familiar with brands and their benefits should be part of an ingredient manufacturer’s overall strategy.”
That said, there are potential pitfalls to consider when entering into a partnership. “Products produced under third-world manufacturing conditions require a greater level of laboratory testing to verify the proper species, potency and potential presence of impurities,” says Woodman. “Buyers of branded ingredients need to be aware of the level of quality that has been invested.”
And watch out for posers. “There are ‘branded’ ingredients that just have clever names and marketing,” says Eng. “True branded ingredients have distinctive science portfolios that cannot be replicated by ‘me too’ facsimiles or generics. Their distinctions begin at the source, from those who grow and collect, then how the material is processed to standardized active compounds that research shows provide a clear benefit in human health.”
Another caution from Eng: “Considering that new ingredients and new research are the heartbeat of new product generation, suppliers need to approach introducing new ingredients with caution, as the media is always looking for that new sensation. After the glitter quickly fades, the negative reporting eventually follows. As an industry we cannot afford the snake-oil flavor of the month.”
Majeed stresses the same. “Fringe companies breaking the laws that regulate supplements get a disproportionate amount of press coverage, so it’s important that we meet the resulting skepticism with rigorous quality and transparency.”
Advice for Retailers
“Branded ingredients allow retailers to feature the best in class for a particular product,” says Clardy. “In most cases, branded ingredients help define trending therapeutic applications or new technologies. At AIDP we are skilled at identifying innovative science combined with market trends and have introduced a number of breakthrough ingredients.” Among them: Magtein for cognitive health and alleviating anxiety; KoACT for bone strength beyond bone mineral density; and Ocibest in the stress health category.
To retailers considering adding new formulations, Eng stresses the importance of doing your homework, including communicating with the supplier for detailed research validating the ingredient’s efficacy. “Retailers should be reassured that the science includes original work on the ingredient, not borrowed from other sources. They should also have the complete story—the origins of use of the ingredient, often going back centuries by indigenous peoples, inspiring more modern clinical investigations. Also, be aware of how the ingredient is being touted. It it seems too good to be true, it may be.”
Another caution comes from Woodman: “Branded ingredients that become popular will experience the introduction of generic products from third-world firms. Price-oriented marketers will not use the actual branded ingredients used in clinical trials, but a lower-priced replica.” For this reason, he advises merchandising Euromed products (like saw palmetto displaying the Prosterol logo) by company, not category. He points to products from China using alterated saw palmetto oil extract. “Adulterated products establish an artificial price point. Consumers may not be aware of the quality differences and select the product based on the lowest price point.”
When it comes to the probiotics/prebiotics and enzymes, Michini says these categories are more recognized by consumers than ever and in growing demand as they relate to good GI and immune health. Therefore, when the branded ingredients make claims of scientific results, make sure that the results from that specific research actually belong to that supplier. “For example, our Glutalytic has been shown in a human clinical study to reduce symptom intensity from gluten consumption when taken daily with meals. No other generic enzyme ingredient can allow the supplement marketer to tout this study’s results.”
To drive sales, Michini adds, “Our branded ingredients support common health areas such as digestion, immune health, cardiovascular wellness and fitness. There are many in-store or community opportunities that can be created.” His example: March was colorectal cancer awareness month; in-store centers that tie together foods, essential oils, homeopathy and supplements that cater to lower GI support would be beneficial. “And to really have some fun, although there is no official National Probiotic Week, create one!”
And of course, retail staff must be in-the-know. “Make sure your staff have access to the industry’s trade magazines and subscribe to industry online newsletters so they can learn from branded ingredient suppliers in articles about health conditions,” says Majeed. “Convey to your staff, as well as customers, how carefully you select the brands on your shelves.”
WholeFoods is here to help. In addition to the magazine, retail staff have access to a wealth of information at www.WholeFoodsMagazine.com. And encourage your staff to sign up for our weekly In The Know newsletters. There are four each week (In the Know, In the Know Grocery, In the Know Dietary Supplements and In the Know Supplier), to make it easy to get the latest news on topics most relevant to your needs. WF