Outsourcing
Finding partners, whether in the form of contract research organizations, branding and marketing firms or contract manufacturers, is a durable feature of the dietary supplements business. It’s a way for companies to leverage faster growth, but it brings with it its own set of concerns.
Chief among these is remaining clear on where the responsibility lies for GMP compliance. The Food and Drug Administration is clear on this point: You can pay someone to manufacture your product for you but you can’t download the compliance responsibility, but there is still widespread ignorance on this point within the industry, experts say.
“While brand owners certainly want their products made in a clean facility, they aren’t all aware of their own responsibility to have GMPs in place,” said Shaheen Majeed, Marketing Director, Sabinsa Corp. “However, they truly believe much, if not the entire burden of the acronym ‘GMP’, falls on the shoulders of the contract manufacturer.”
Some companies do go that extra step and have a contract manufacturers fill out questionnaires prior to setting up an audit, said Majeed, and he sees that as a good sign that the brand owner knows they are at liability too and is doing their due diligence.
Ed Wyszumiala, president of Wysz Consulting Solutions, added that, while some brand owners have very strong and robust quality agreements and oversight plans in place with their outside manufactures, many brand owners in the market are interpreting the GMPs as stopping at the manufacturer’s door.
“That is not how the regulation works,” he said. “If their contract manufacturer fails, then so does all of the products they produce. We have not seen FDA issuing recalls or public notices yet from the majority of the GMP warning letters, for specific products produced in a non-compliant GMP facility, but I would expect to see those days coming.”
Technology is transforming the outsourcing sector, especially when it comes to the role of smart phones, which can act as individual data portals, accelerating clinical trials and making them cheaper.
Mobile technologies for clinical trials represent the future of the industry, said Jay Udani, MD, founder and CEO of Medicus Research, which recently completed its 20th study using the technology.
The use of mobile technology for patient reminders, compliance, food records is on the rise, said John Marshall, VP of operations for Biofortis, and it’s an innovative trend to help tighten the control of the study.
Harnessing the technology is dependent on participants’ access to it, and Marshall notes that about 40% of Biofortis’ study participants own smart phones, with the number increasing rapidly.
“Our clinical trials management system has smart phone capabilities and we have just begun utilizing this type of technology,” he said.
This technological leap comes at an opportune time, as regulators are looking for every greater amounts of data to back up product claims, experts say.
But none of that means much if the data that is gather can’t be trusted. “Dry labbing,” the practice of providing test results with conducting actual tests is alive and well, experts say, and will require a significant shift in corporate culture to combat.
Bone & Joint Health
Glucosamine has, along with chondroitin, been the old standby ingredients in this category for decades. Quality issues, competition from new ingredients and questions about efficacy of glucosamine have eroded sales, experts say. The global retail value of glucosamine products was valued at $1.895 billion in 2009, which then grew to $2.041 billion in 2011, according to data from Euromonitor International*. But then the market began to flag, with 2013’s value at $1.823 billion, and the 2015 forecast predicting a market worth $1.770 billion. While there may be a decline in the overall glucosamine market, one sector that is growing is in vegetable-sourced glucosamine, said Cal Bewicke, CEO of Ethical Naturals, which supplies a vegetable-derived non-GMO glucosamine called GreenGrown.
Efficacy, quality and smaller dosage sizes are helping suppliers of collagen ingredients gain traction in the joint health marketplace. But suppliers agree that their ingredients occupy the thin edge of the wedge, and that commodity glucosamine and chondroitin supplements still predominate.
Omega-3s are one well know ingredient that has had little success in breaking into the joint health market in a big way. Harry Rice, PhD, chief science officer for GOED, said this has to do with the bifurcated nature of the market, dealing as it does with both osteoarthritis and rheumatoid arthritis. The data for omega-3s in osteoarthritis looks promising, Rice said, but for rheumatoid arthritis, “The data is just not good,” he said.
Latin America
Being among the most dynamic regional markets in the world with double-digit growth, and with an increasing consumer demand, Latin America offers plenty of opportunities for dietary supplement companies, said David Pineda Ereño, regional director for EAS Latin America.
Pineda said a common trend among companies is to focus their business strategies on launching products first in the country with highest population growth rates. While this is understandable, business opportunities could be missed by not identify those markets that have the most favorable conditions for the characteristics of the dietary supplements and ingredients that companies plan to launch.
In order to identify those markets with the most interesting conditions, companies need to observe the features of each market by looking at the profile of the population, including the social changes and the evolution of lifestyle. We will be seeing different growth rates in relation to different population groups, such as an increasing middle class with a growing purchasing power, which will also help identify where the most interesting rising incomes arise and where the consumers of today and tomorrow are located.
Mexico, one of the vibrant and easily penetrated markets in the region, is in the midst of a government-sponsored campaign to combat obesity. While this is not the best of news for the purveyors of sugar-sweetened soft drinks, it’s good news for dietary supplement companies. Sales of vitamins and dietary supplements grew 9% in 2013 to reach Mx$15.7 billion ($1.2 billion) as increased visibility over the country’s main diseases have consumers thinking more about prevention, according to a report from Euromonitor International.
Latin America is dynamic in some not so good ways, as well. Experts say that high inflation in Argentina is likely to put a damper on the growth of sales of dietary supplements there.
Healthy Aging
The healthy aging market is growing significantly. According to a report from Transparency Market Research, the market exceeded $120 billion last year and will hit $200 billion by 2020.
The industry considers and addresses the healthy aging market as a collection of health conditions associated with the aging process, said Barbara Davis, PhD, Director, Medical and Scientific Affairs, PLT Health Solutions, and that includes eyes, cognitive, joint, skin, heart, and immune health.
“In many ways, the development of new concepts, ingredients and formulations in the natural products industry tracks developments in the medical field as seniors,” she said. “For example, the significance of immune health for healthy aging is highlighted by the development of vaccines, targeted toward the aging population, such as influenza, shingles and pneumonia.”
One area that the company has seen a dramatic increase in interest is in cognitive health. “We see this both in the aging population as they look to learn and function as they did at a younger age, but also in a younger demographic who look to achieve peak performance throughout their lives,” said Dr Davis.
But within that growing market with ingredients targeting a variety of health conditions, where do the opportunities lie for brand holders and formulators? NutraIngredients-USA talked to a panel of experts to find out.
Functional Foods
This last special edition of the year focused on functional foods, which is where an increasing number of Americans are consuming bioactive ingredients. One of the things often mentioned as driving innovation in this space is pill fatigue, where consumers are just tired of taking pills, especially in dosage forms that require multiple large pills per day. Is this real, or just a marketing ploy? No, say many experts in the field. It’s a real phenomenon and it’s driving both dosage form innovation and the movement of bioactives into functional foods.
Peter Wennstrom, of the firm HealthyMarketingTeam, in a guest article looked at how the development of functional foods has put the whole notion of processed food under fire. Consumers know ever more about nutrition, he said, which in his view means the handwriting is on the wall for some venerable categories like cereal.
It can be a tricky category to navigate. In another guest article, consultant Julian Mellentin looked at why some big pharmaceutical companies have consistently failed at having a lasting presence in the sector. But that doesn’t stop them from trying, Mellentin said.