Keeping Your Ear to the Ground

How consumer trends can inform raw material suppliers and vice versa.

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Raw materials determine the quality of any finished product. This is something responsible manufacturers of dietary supplements, food and cosmetics understand and therefore strive for the highest standards when sourcing their ingredients. Of course, not every manufacturer has the same standards and many conventional mainstream products continue to sell genetically modified, pesticide laden foods, and chemicals to customers. However, it is clear that the consumer is becoming wise to their act and increasingly reading labels, concerned about what they are putting in and on their bodies. This has been a common theme throughout the articles WholeFoods has published, but how does this influence the other end of the supply chain, the raw materials supplier?

Consumer Trends and Industry Response
The most obvious result of consumer demand for higher quality products are perhaps the highly visible seals marketed on product labels such as the U.S. Department of Agriculture’s (USDA) Certified Organic seal as well as the popular third party certification Non-GMO Project Verified. While the entire supply chain is responsible for determining the status of the final product, it all begins with the raw ingredient, based on the agricultural methods used to grow it as well as the processing of extracts and powders to be used in finished products.

“Consumers are looking for more organically-derived materials and moving away from materials with excipients and synthetic preservatives,” says Sendhil Pani, president, Bayir Inc, based in Hamilton, NJ. “For example, our industry was using rice flour and dicalcium phosphate as fillers for some time. We’ve moved away from this towards more natural alternatives because of consumer interest.”

As Randy Kreienbrink, VP of marketing, BI Nutraceuticals, based in Rancho Dominguez, CA, explains, consumers want clean label, fewer ingredients, natural flavors and colors as well as local, regional ingredients. Besides that, he explains, things that can really turn off a potential customer are chemical-sounding ingredients, so they’re really looking for simplicity and minimally processed ingredients. Consumers demand from the manufacturer and the manufacturer demands from the supplier, but now, given the amount of discourse about GMOs, organic agriculture and other issues, suppliers are listening more closely to consumers to get ahead of the competition and give people what they want.

Sandra Gillot, CEO of Benexia, based in Santiago, Chile says that vegan and allergen-free are two trends well suited for her company’s chia products that support food, cosmetic and dietary supplement applications. “In the growing area of vegan and allergen-free dietary supplements, [chia raw materials] combine well with others such as rice powder, coconut powder, cocoa powder,” she explains.

What becomes clear is that people want to be healthier. For many, this means avoiding what is bad for them, either by choice or necessity. But health, as we all know, is more importantly about what a consumer puts into and on one’s body, which is why people pursue products that showcase specific ingredients such as chia, which is rich in plant-based omega-3 ALA. Understanding the potential that plant-based ingredients have, not only in food but nutraceutical applications, Benexia appears to have listened to what consumers were looking for and expanded its portfolio of chia-related products.

“Benexia Chia LM is more likely to be linked as food, while some customer in the soap industry (saponifiers) uses the chia seed. The chia seed oil, rich in omega-3 ALA, has a more direct, and desirable impact beauty rather than the whole seed itself,” says Gillot. For example, the firm’s Benexia Xia Oil is better suited for cosmetic and dietary supplements due to its high 63% concentration of Omega-3 ALA. However, when it comes to meeting trends and the nutritional profile consumers are looking for, food also needs a boost. “Xia Powder-435 is a multifunctional fiber that is used in food to boost fiber and omega-3 content to enrich bakery products’ nutritional profile as a 100% natural and minimum processed raw material,” Gillot explains further. Another chia powder in the firm’s portfolio is Xia Powder-125 which is used in foods to boost protein, fiber and omega-3 content in items such as cereal, protein bars, beverages and pasta.

Consumers are moving away from materials with excipients and synthetic preservatives.­­­­­
– Sendhil Pani, Bayir, Inc.

This brings us to food fortification which has been ongoing for some time with nutrients such as calcium, instituted by the government, but the latest demand for fortification has been from consumers for products rich in protein and most prominently, probiotics. “Probiotics continue to be a growing trend in the food space; more and more applications, ranging from cereal to snacks and beverages, are utilizing probiotics,” says Shaheen Majeed, president, Sabinsa Worldwide, based in East Windsor, NJ. “They have also moved strongly into the animal nutrition category.”

While this trend started out with naturally probiotic-rich foods such as yogurt, sauerkraut and kombucha, food safety laws regarding pasteurization do not allow much of that beneficial bacteria to survive so live cultures are added in after the fact. This created a demand for different strains that could be incorporated more effectively into specific products and would better survive the digestive tract. The demand for probiotics drove innovation and products fortified with probiotics are more numerous than ever.

The trend of probiotics is a result of greater awareness about digestive health and the impact it has on our overall health. “In recent years gut health is increasingly gaining popularity due to advancements in research and a growing understanding of how the gut also affects other areas of human health,” explains Alan Rillorta, director of marketing, AIDP, Inc., City of Industry, CA. “As a result, the new gut microbiome story is expanding and is not just about immune health any more. The gut health message now also includes among its growing list: cognition, mood, energy, skin health, weight management, regularity, heart and metabolic health.”

In terms of numbers, he explains, “In 2016 digestive health positioned products grew 9% globally and reached approximately $55 billion in global retail sales. Digestive health is now the third largest product category in the worldwide health and wellness market.”

However, the thing with trends is that they come and go. For example, while omega-3s from sources such as fish oil and krill have been a pretty consistent category in the dietary supplement industry, its performance is not as strong as it used to be. There is still interest in omega-3s, but it has since expanded into the plant-based food category, as those making lifestyle choices to go vegan seek the most nutrient-rich foods. Firms like Benexia are moving in on this trend with their new nutraceutical applications, understanding that these consumers will also rely on dietary supplements to support their health.

That is not to say that marine oils are going away, simply that there is greater competition and therefore greater consumer engagement is required. This is where Aker BioMarine Antarctic US, based in Metuchen, NJ, has stepped in. Their new initiative, the Omega-3 Project, is an effort to call attention once again to the relationship between omega-3s and heart health.

“Omega-3 deficiency is a global issue,” says Becky Wright, director of marketing for Aker. “The sad reality is that many are unaware of the ramifications of omega-3 EPA/DHA insufficiency, which is why education on this topic is essential. Healthy omega-3 levels should be greater than 8%, but a recent study, published in Progress in Lipid Research, mapped out omega-3 levels of humans across the world and the results showed that low levels of EPA/DHA (<6%) affected most developed nations globally.”

Aker is engaging with consumers in a unique way and giving omega-3s greater context by giving it measure as well as providing a call to action. In a time when people are spitting into vials to determine the composition of their DNA, this could be a great and effective marketing tool. “The Omega-3 Index Project provides tools to help consumers and practitioners alike, identify, correct and maintain healthy levels of omega-3s EPA/DHA while reducing the risk of chronic disease,” says Wright. “The project educates everyone on how to measure their omega-3 levels using the Omega-3 Index Test, a nutritional tool used to assess cardiovascular and overall health.”

To accomplish this, Aker is collaborating with Dr. Bill Harris — an internationally recognized omega-3 expert, president of OmegaQuant Analytics, and co-inventor of the Omega-3 Index Test. Harris believes the Omega-3 Index Test will be the “new cholesterol test” and that people will brag about their number. “With this project, Aker BioMarine is hoping to elicit positive change and bring more awareness to omega-3 deficiency,” says Wright. “By communicating these important messages, consumers can make better choices and take control of their health, especially when it comes to omega-3s.”

While consumers drive trends, just as important are the gatekeepers to consumers, the retailer. Natural products retailers care about what they put on their shelves and give their customers. This is why many retailers have such high standards, but a new retailer-driven initiative launched by the Natural Products Association (NPA) called Supplement Safety and Compliance Initiative (SSCI) is bringing together some of the largest dietary supplement retailers to, as its website states, “provide a harmonized benchmark to recognize various safety standards throughout the entire dietary supplement supply chain.”

Retailers participating in SSCI include GNC, Walmart, Whole Foods Market, Walgreen, Target and Vitamin Shoppe. “It’s really a platform of collaboration between the biggest retailers and manufacturers in the world and then service providers, the service providers being the certifiers,” says Daniel Fabricant, Ph.D., president and CEO of NPA. “I think consumer confidence is key and it brings these companies together in a number of technical working groups to tackle dietary supplement compliance and safety issues.”

SSCI is developing schemes, quality and compliance practices, for a number of scopes that apply to different aspects of the supply chain, such as botanical raw materials. Certifiers will have to benchmark their standards against them and manufacturers/suppliers will have to meet these standards in order to achieve SSCI approval and acceptance from retailers. Once achieving SSCI approval, all participating retailers can carry that product, which helps standards remain consistent and greatly reduces redundancy when auditing manufacturers. In order to achieve this, the entire supply chain must be involved. “We can’t just take a piece of it, we’ve got to go all the way to the inception of the product to when it gets to the consumers’ hands,” says Fabricant.

For example, the botanical schemes being developed include herbal growers, processed ingredient suppliers and extract manufacturers agreeing to adopt the relevant portions of American Herbal Products Association’s “Guidance on Good Agricultural and Collection Practices and Good Manufacturing Practices for Botanical Materials” (GACP-GMP). More raw material scopes are being developed and pilot audits of manufacturers and suppliers are under way, and the goal is to have standards in place by Q1 of 2018. SSCI will continue to grow and adapt from there and ultimately, says Fabricant, the goal is to cover regulations across the globe. “The world is flat in that regard now,” he says. “Products get made in the U.S., they go to Europe, they go to Canada, Australia and there are specific rules that apply to each of those jurisdictions, so we’re really looking at how to build that out.”

In a lot of ways, this protects retailers. Using the actions by New York Attorney General Eric Schneiderman as an example, says Fabricant, “Who gets the questions? It’s the retailers. Customers go in and say, ‘I just saw this news story, what do I do, what do I buy?’” However, SSCI can be good for everybody. “It gives us a way in the industry to punch back,” adds Fabricant. Ultimately, compliance and quality becomes streamlined across the board, much to the benefit of retailers, the delight of consumers, all while protecting industry members.

Compliance
Of course, first and foremost is compliance with federal regulations. Different standards exist for food, cosmetics and dietary supplements, as Kreienbrink explains, “Each ingredient must follow the FDA Code Of Federal Records known as 21 CFR. Each category, food, supplement or cosmetic has their own requirements that a manufacturer must follow.”

An ingredient that is to be intentionally added to the food supply, he explains further, is considered a food additive and is subject to extensive pre-market review and approval by FDA. For many firms, GRAS status is an important alternative to this pre-market approval. GRAS status or Generally Recognized as Safe has become an important aspect of FDA compliance. “The industry demands GRAS and it would be difficult to market an ingredient that is not GRAS,” says Abdul S. Alkayali, VP international division, Certified Nutraceuticals, based in Pauma Valley, CA. “Our patented ingredients are GRAS and clinically proven to be effective.”

“A regulatory requirement that applies to any substance intentionally added to a food (as a food additive), [GRAS] is a determinant of its safety and quality under the intended conditions of use,” explains Majeed. “Self-affirmed GRAS allows the manufacturer to determine the safety of its substances, which are directly or indirectly added to food, after careful consideration of views from qualified experts, based on ‘scientific procedures.’ Specific data and information that demonstrate safety, characteristics of the substance, the estimated dietary intake, and the population that will consume the substance are reviewed.”

“For larger food manufacturing companies, they may prefer an FDA GRAS ‘no- objection letter,’ which means that a company has submitted safety data on an ingredient to the FDA and upon review the agency sees no reason to object to those safety conclusions,” Majeed adds. The no-objection letter is useful because it is something one can show clients interested in purchasing a GRAS substance.

GRAS is one of two regulatory pathways for dietary ingredients, the other being the much debated new dietary ingredient notification (NDIN). While industry and FDA continue to dispute the intricacies of the NDI draft guidance, in some ways, it might be an easier pathway, depending on the ingredient. For example, NDINs can use proprietary data to support safety while GRAS status requires published data, which can be supported by additional proprietary data to demonstrate safety. While FDA’s “no objection” response is not necessarily approval, if an ingredient is GRAS and has been used in the food supply the ingredient does not require an NDIN. The ingredient’s use in the food supply is the important part here. As Fabricant explains, “If you have GRAS, there’s nothing in law that says if you have GRAS you’re not an NDI. If you have GRAS, you could be part of the diet, but if you have a GRAS substance that’s never been put into food lawfully there’s nothing that says, ‘Now that you have a GRAS notice you’re not an NDI.’” Therefore, it may be best to submit NDIN for novel dietary ingredients in order to get official FDA sign-off.

GRAS status is not without its detractors. For example, a lawsuit was recently filed against FDA by Center for Food Safety and Earthjustice on behalf of Breast Cancer Prevention Partners, Center for Food Safety, Center for Science in the Public Interest, Environmental Defense Fund and Environmental Working Group for “illegally delegating” the authority to “self-interested food and chemical manufacturers” to deem for themselves what substances are safe to add to food. They argue that while the GRAS rule was initially designed for ingredients widely known to be safe such as vegetable oil, it has since become a loophole by which companies can bypass rigorous premarket approval (1).

I think consumer confidence is key and SSCI brings these companies together to tackle dietary supplement compliance and safety issues.

– Daniel Fabricant, Ph.D., president and CEO of NPA

Lawmakers, too, are questioning the rule. For example, Senator Edward J. Markey (D-MA) sent a letter to then-commissioner of FDA, Robert Califf, MD expressing concern for how companies use the GRAS rule, stating, “Given the loose structure of the voluntary notification program and the allowance for GRAS substances to be self-determined by the food industry, conflicts of interest have pervaded the system” (2). Another thing to consider is the FDA’s future guidance on the use of GRAS panels, which have been criticized for the potential of conflict of interest when companies hire GRAS experts to determine if an ingredient qualified for GRAS status. While the final rule does not address the possibility of enhanced oversight, given the noise, the potential is out there.

Another important regulation to be aware of is the Foreign Supplier Verification Programs (FSVP) under the Food Safety and Modernization Act. “FSVP requires importers to verify that their foreign suppliers of food for human and animal consumption meet applicable FDA safety standards,” explains FDA. “More specifically, FSVP requires that importers verify that their suppliers are producing food using processes and procedures that offer the same level of public health protection as the preventive controls (PC) requirements in the preventive controls and current good manufacturing practices rules for human food and animal food and produce safety FSMA rules, and that the food is not adulterated and properly labeled with respect to allergens” (3).

The latest compliance date for FSVP passed on May 30, 2017 pertains to foreign suppliers that will not be covered by the preventative controls (PC) requirements or produce safety rules; foreign suppliers subject to the PC for Human Food rule and are not “small businesses,” “qualified facilities” (certain very small businesses) or subject to the Pasteurized Milk Ordinance; or foreign suppliers subject to the current good manufacturing practices (CGMP) requirements in the PC for Animal Food rule, and are not “small businesses” or “qualified facilities.” There is still time for “small businesses,” “qualified facilities” (certain very small businesses) or those subject to the Pasteurized Milk Ordinance, though if you feel like you’re in the dark, you’re not alone, as many in the industry would agree.

“There hasn’t been a lot of clear direction from the agency, in terms of what importers have to verify, for the PC rule at this point,” says Fabricant. “We don’t even know what the agency, at least for our industry, considers an appropriate hazard analysis.”

Pani adds that while he welcomes the regulation, “FSVP isn’t as clearly defined as we’d like.” Christian Artaria, CEO, BGG Europe SA, based in Lugano, Switzerland, finds that this is not unusual for regulation in the United States, compared to other markets.

“Unfortunately, both in Europe as well as in the US there are still some gray areas in the regulations and it’s not always easy to understand if an ingredient can be marketed or not” he explains. “I believe all food operators would prefer to work without any sort of gray area and any improvement in this direction is welcome.”

Quality Control
Compliance is something every raw material supplier must achieve, but it is the way quality and purity is monitored and sustained that sets a company apart. As Majeed explains, the hard work starts at the very beginning. “Right from the first step of raw material sourcing, adulteration must be guarded against,” he says. “Herbs are normally supplied in dried form and must be authenticated for identity, including part of the plant. Since the chemical profile and in turn activity of [the] plant extract is dependent on the authentic raw material, screening is critical.”

“Our first step is ensuring a high purity level of over 99.99%, which is guaranteed by agricultural and nursing best practice know-how developed by Benexia’s Agricultural Specialist, and implementing agrochemical and pesticide programs, GAP, GMP, and HACCP in the Agricultural process,” says Gillot, describing her firm’s practices. “We have designed and implemented the first (and still only) unique exclusive chia ingredients manufacturing facility in Arica (Chile) [that is] FSSC 22000-certified, which is equivalent to [Global Food Safety Initiative] Level 2…All products are produced under Benexia’s Quality Management System, which integrates certification, Hazard Analysis Risk, Policy and Procedure, third-party audits and customers audit ensuring the consistency and quality in all our products.”

These are only two examples of the efforts raw material suppliers make to ensure quality, consistency and safety. It’s the right thing to do and it’s also good for business. “Because most of our ingredients are branded, and many patented, our investment is substantial, so quality, consistency and safety is imperative,” explains Majeed, about protecting his company’s investment.

It also gives assurance to your clients, especially when operating transparently. “Bayir’s focus has always been on maintaining a fully integrated production system operated under Global Quality Standards,” says Pani. “To formalize this program, Bayir launched ‘Bayir Gold’ to provide full accountability and traceability for every single product it manufactures.”

“Transparency is ‘A,B,C’ in the alphabet,” states Artaria. “If you are not transparent with your customers you will never have long-lasting relationships. We invite customers to our plantation locations, we invite them to our facilities so they can see exactly what we are doing there, we are also very open on price trends and how the crops are growing.”

Besides creating a lasting relationship with clients, this quality control and transparency reaches consumers through the manufacturer you are selling to, reinforcing the relationship. Terms like transparency and sustainability are important to the end user because people want to know what they’re buying and feel good about buying it. This is particularly true when it comes to products sourced from animals such as marine oils. Consumers in the supplement aisle buying omega-3 fish or krill oil want to see those third-party certifications such as Friend of the Sea: Sustainable Seafood Products Certification (FOS) and the Marine Stewardship Council (MSC). When it comes to krill, one of the main draws to it is the claim of greater environmental sustainability to its fish oil counterpart and this is important to emphasize when competing with an established ingredient like fish oil.

“According to 2016 data from the Natural Marketing Institute (NMI), supplement users are looking more closely at where ingredients are sourced from, showing strong preference for natural, organic and sustainable sources,” explains Wright. “Sustainability has been at the core of Aker BioMarine’s mission since inception. The company is committed to supplying health ingredients that benefit people while operating in a manner that does not compromise the health of our planet and its oceans. Aker BioMarine is known for its proprietary Eco-Harvesting technology, which reduces by-catch to near-zero. The company is also MSC certified and for two years in a row, has received an ‘A’ rating for sustainability from the Sustainable Fisheries Partnership (SFP).”

Not only that, but Aker provides manufacturers and end consumers the tools to verify sustainability. “In terms of transparency, Aker BioMarine owns and controls its entire supply chain, assuring brand holders (and consumers) a secure supply volume, product quality and seamless service,” explains Wright. “Aker utilizes a GPS tracking system that can pinpoint the exact location of each krill batch processed and some of its clients actually use those coordinates on their bottle labels.”

Suppliers of raw materials should always take the long view, because despite being at the beginning of the supply chain, suppliers and end consumers can greatly inform each other. Watch and learn, innovate, then set trends that have lasting, positive impacts on the industry. WF

References
1. “Groups Sue FDA to Protect Food Safety.” http://earthjustice.org/news/press/2017/groups-sue-fda-to-protect-food-safety, Accessed 8/28/2017
2. E.J. Markey. https://www.markey.senate.gov/imo/media/doc/GRAS_04%2026%202016.pdf, Accessed 8/29/2017
3. S. Mayl. “FSVP: What Do Importers Need to Know?” https://www.fda.gov/food/guidanceregulation/fsma/ucm560689.htm, Accessed 8/29/2017

Published in WholeFoods Magazine October 2017

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