NAXA head launches five new single-ingredient trade associations

17-May-2017 - Last updated on 18-May-2017 at 15:00 GMT

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The principal of a consulting firm that is the motivating force behind two single-ingredient trade organizations has launched an ‘incubator’ program that debuts with the formation of five new trade groups targeting categories such as ashwagandha, chondroitin, and vitamin K2.

The idea, formally known as the Ingredient Association Incubator Program, comes from Scott Steinford, principal in the Woodlands, TX-based consulting firm Trust Transparency Consulting. Steinford is also the CEO of two relatively new existing single ingredient associations, the Natural Algae Astaxanthin Association (NAXA), and the CoQ10 Association.

Fringe players can drag down whole

Steinford said his history in the industry led him to believe that associations formed around boosting the transparency, quality and efficacy stories of single ingredients can be an effective way to raise the trustworthiness of given supply chains. In his early days in the industry Steinford said he witnessed CofAs being routinely doctored, and middlemen representing themselves inappropriately as manufacturers. The need was clear, he said, for someone to step up to the plate to champion ingredient quality for the whole, rather than to let the ragged fringes drag the center down and have an entire category forever branded as junk.

GOED proves concept

Steinford said he lobbied for the formation of a CoQ10 Association several years before the formation of the the Global Organization of EPA and DHA Omega-3s (GOED), which has become the standard of success against which all such organizations must be judged. The time was not ripe, he said, because the Japanese manufacturers that dominated the CoQ10 supply at the time were not comfortable with the concept of competing on some aspects of their business while cooperating on others nor were they at ease with ceding some responsibility to an association director. But GOED’s success has changed minds across the industry, he said.

“GOED was formed and demonstrated, over time, benefit and purpose. Probiotics [in the guise of the International Probiotics Association, or IPA], Astaxanthin and CoQ10 have also emerged as viable entities providing value and purpose. The introduction of the Ingredient Trade Association Incubator Program by Trust Transparency Consulting was a culmination of my beliefs, industry discussions and experiences leading up to the concept of launch,” Steinford told NutraIngredients-USA.

Five new associations

The idea, Steinford said, is to share expertise and back office support staff across ingredient platforms so that such associations do not have to continually reinvent the wheel. Steinford said his personal experience shows that a CEO can handle two or three such associations, and the back office functions are pretty much common to all. The concept bears some resemblance to the way one property management firm can put together and administer multiple individual condominium associations.

Steinford said the following nascent trade associations have been formed as far as filing the IRS 501c(6) paperwork is concerned:

Global Ashwagandha Association
Global Prebiotic Association
Global Curcumin Association
Global Vitamin K2 Association
Global Chondroitin Association.

In the case of several of these ingredient categories, there are some serious disagreements among the major players. These include what forms the ingredients should take, which bioavailability enhancements are real and which ones are marketing hokum, whose IP toes are being trod upon, etc. In some cases there are some outstanding lawsuits over these issues making their way through the courts.

Perfect alignment not necessary to start

It’s easy now to forget that not everyone in the omega-3s sphere was on the same page to start with, either. Adam Ismail, who for more than 10 years has been executive director of GOED, said some disagreements can be left to simmer on the back burner while an association gets around to the work of defining a baseline for quality and assembling a positive and cogent message on the science behind the ingredient. The important thing is not to let the perfect (no IP wars, and precise specifications agreed to and in place) be the enemy of the good.

“When GOED was started, there were not really any IP battles hanging over the omega-3 industry. However, IP issues like we have seen in the krill oil or algae oil industries have certainly arisen from time to time, but we have focused our work on promoting and protecting the overall EPA and DHA category. The omega-3 industry has seen its share of IP lawsuits, but it has not really affected our work because matters like educating consumers and healthcare professionals about omega-3s, establishing health claims and RDIs, or ensuring consumers get high quality products have more impact on the overall category,” Ismail said.

“It is true that the Monograph helped establish our impact early in our existence, but I do not think that precise step is necessary for every organization to succeed. However, if you look at what the Monograph was functionally trying to achieve, it was trying to address a universal problem in the industry. I do think that the single-ingredient organizations' ability to solve key industry issues is important for their success,” he said.

Getting all parts of the value chain to the table

One of the key successes that GOED had was to bring all the players, those trading on a high-dollar, high-quality message and those competing on price, to the table for the benefit of the whole. Steinford said that’s the ultimate aim of his new entities.

“There will always be companies, and people, that choose to demonstrate their benefit and value by denigrating another. In the end, this practice, as a strategy, rarely succeeds. There are two steps to selling ingredients: first, educate on the benefit of the ingredient and second, communicate the value adds or superiority [of a particular brand]. Very few consumers will be concerned about the bioavailability of an ingredient before they are sold on its initial benefit. Additionally, the industry litigation often is led by the producers of branded ingredients but a large population of lesser known ingredient manufacturers also exist to support mass market, private label and MLM channels. These manufacturers should and can have a voice as industry educators and contributors to the science behind an ingredient,” Steinford said.

Keeping the science straight

Eric Anderson, senior vice president of global sales and marketing at vitamin K2 supplier Nattopharma, which markets a branded ingredient called MenaQ7, said in principle he welcomes the idea of a group focused on his ingredient. Anderson said Nattopharma has already been in discussions with other K2 suppliers on establishing a minimum quality standard.

“I am generally in favor of trade organizations that are based upon the criteria of 1) safety, 2) quality, and 3) validation of the science substantiating the individual ingredients,” Anderson said.

“The greatest criticism I have of the natural products industry is the tendency for suppliers to steal science. Quoting science done on one proprietary ingredient to try to support a different proprietary ingredient is not borrowing -- it is flat out theft,” he said.

“An association that can ensure there is a line of demarcation for quality, that proper safety data gets put into the public domain, and, most importantly, provides clarity on the science that substantiates individual ingredients can play a vital role in helping develop a category.’