By Jeff Hilton, Co-Founder and Chief Marketing Officer, BrandHive

 anniversary as a branding and marketing agency dedicated to the healthy, natural, and organic space. Hard to believe it has been that long. In some ways, it seems like only yesterday that Matt Aller and I hung out our shingle. But it has been and continues to be a wild, crazy, and fun adventure, and I am grateful to be part of such a vibrant and authentic community.

I’m often asked how I think, from my vantage point, the market has changed over the past 20 years. From a marketer’s perspective, then, here are a few observations.

Not to open on a down note, but I miss the days of wide-eyed optimism when companies in our industry were run by founder entrepreneurs who championed new technologies and ingredients, put profits back into their companies, and believed in the power of their products to help people and deliver real health benefits. My point is not that these giants are not still out there, but frankly, there are fewer of them. Our industry was less politically correct when we started BrandHive, and sometimes I miss that freewheeling spirit and unquenchable fire.

There has been a very important and long-awaited shift toward more investment in human clinical research that is slowly but surely making a difference in the natural products marketplace. Consumers and retailers are demanding proof of concept, and that is a good thing. Shame on fly-by-night companies that spring up to take advantage of unsuspecting consumers and then make off with the profits. Part of me believes that karma will find its way around to bad players. But overall, the trend toward greater validation is strong and moving in a good direction.

The consumer landscape has turned completely upside down. Control is no longer with the marketer; it is now in the hands of the consumer. Consumers have all the options. They hold all the cards. And social media has given them strength in numbers. They are indeed empowered beyond what any of us imagined. So we deal with it. And we play the game their way. Boomers have disposable income and they want to not only live forever, but be healthy forever. Millennials want to make the most of life now and are increasingly active in their pursuits, fueling growth in the active-nutrition market, which shows no sign of slowing any time soon.

We as industry companies can no longer segment consumers by shopping channel. Consumers’ purchase activity is fluid and crosses traditional lines. There is no longer a health food store shopper. There are, however, health-aware consumers who shop wherever they need to in order to meet their health and nutrition needs. Loyalty is dead. 

The mobile phone, the desktop or laptop computer, the tablet, and the plasma video screen: these are the four screens in which we live today-and often, we use them at the same time. They don’t compete; they complement each other. They reflect and even create our life experiences. It’s surreal and a bit sobering, but it is the future. Marketers need to embrace that reality.  

 has helped launch and revitalize brands promoting health and wellness. His passion and unmatched industry knowledge have led to innovative and successful marketing strategies that deliver results on time, on budget, and on brand.

Smart Dietary Supplement Marketing: Leverage Both Ingredient Suppliers and Retailers

Will 2016 Be Another Record Year for Acquisitions and Investments?

Consumers Willing to Pay Nearly 50% More for Flavored Milk with Natural Colors and Flavors, Lycored Reports

Articles

As natural products marketing firm BrandHive celebrates its 20th anniversary, co-founder Jeff Hilton talks about what’s changed in the natural products space.

BrandHive Celebrates 20 Years of Marketing in Natural Products Industry

Try as they might to prepare for it, suppliers in just about every segment of the ingredients market face supply shortages from time to time. Flavor firms, in particular, have added challenges to deal with. On top of potential price increases, the distinct taste profile of many flavor ingredients can make reformulating especially challenging during a shortage, explains Richard Brownell, vice president of vanilla products for Virginia Dare (Brooklyn, NY).

“Flavors are complex combinations of many individual components that provide a unique sensory profile in foods, beverages, and pharmaceuticals,” says Brownell. “The difficulty of making substitutions when ingredient shortages occur is especially true of natural ingredients, which often differ from one origin or supplier to the next.”

At the moment, vanilla may be the most famous flavor in limited supply. Bad harvests in Madagascar, the world’s top producer of vanilla beans, sent vanilla prices skyrocketing from $20/kg five years ago to more than $200/kg today. But it’s not the only case. Political turmoil in Syria has disrupted sourcing of Aleppo pepper, and unfavorable weather in Southeast Asia has led to failed coconut and pineapple crops.

The good news is flavor firms have developed a host of strategies to anticipate and address these kinds of shortages. 

As with any investment strategy, diversification is often the best defense. It’s important to avoid relying on a single source of an ingredient whenever possible, advises Synergy Flavors (Wauconda, IL).

“This puts us in a strong position to ensure we have varied sources of supply-even if there is a failed pineapple crop in Thailand-because we also maintain good relations for pineapple options in Costa Rica,” explains Tim Yoho, director of quality, regulatory, and procurement for Synergy. He adds that Synergy’s multi-source strategy has allowed it to keep both coconut and pineapple ingredients in sufficient stock to meet customer needs.

But even with a diverse geographic portfolio, dramatic ingredient shortages in one locale can have an outsized effect on the entire global market, as is the case with vanilla. That’s why it’s also crucial to keep an eye on conditions that could lead to a shortage and plan accordingly. Virginia Dare, for example, began stockpiling extra vanilla bean several years ago in anticipation of the coming vanilla shortage, says Brownell. But sometimes that proactive strategy can only last so long.

“This cycle is now five years old, and we have felt the impact of higher bean prices as we have replenished our bean inventories,” says Brownell. Unfortunately, it could be two or more years from now before the vanilla supply can fully recover.

Once a shortage is here, there are still plenty of ways to mitigate its impact. As vanilla problems persist, Virginia Dare has helped its customers reformulate with lower-cost vanilla beans sourced from countries besides Madagascar, Brownell says.

Other firms, such as Sensient Flavors (Hoffman Estates, IL), stretch the limited vanilla supply further by focusing on optimal extraction techniques.

“We leverage our various extraction technologies to distill the maximum amount of flavor from our raw ingredients and drive down costs,” says Joe Gadomski, purchasing manager for Sensient’s flavor group division.

Sometimes, though, reformulation makes more financial sense if ingredient prices go too high. Since the vanilla shortage began, Gold Coast Ingredients (Commerce, CA) has increased inventory and sales of alternative vanilla flavors, which can be used as hybrid or full replacements for vanilla extract. While this may pose a problem for companies looking to claim vanilla extract on their labels, vanilla alternatives can offer more consistent taste and price, explains Megan Trent, marketing assistant for Gold Coast Ingredients.

“It really depends on what the customer is looking for, and we provide options for every customer’s needs,” Trent says.

Enzyme Ingredient May Help Alleviate Vanilla Shortage

Vanilla Alternatives Address Soaring-High Vanilla Prices

Michael Crane
Associate Editor
Nutritional Outlook Magazine


Suppliers in just about every segment of the ingredients market face supply shortages from time to time. But flavor firms, in particular, have added challenges to deal with.

Flavor Firms Explain How to Navigate Supply Shortages

Selecting a product manufacturer is one of the most important decisions a dietary supplement marketer will make. These days, that decision is even weightier amidst heightened regulatory scrutiny and public attention on the supplements industry at large. With so much riding on the line, some nutraceutical firms are choosing to bring manufacturing in house in order to control, firsthand, the quality manufacturing of their products. While third-party contract manufacturers are still a valuable cog in the supplement production chain, removing the middleman can yield firms who choose to go in house some unique opportunities, says Ken Langhorn, technical director for mixing and blending equipment specialist Charles Ross & Son Company (Hauppauge, NY).

Take the guarding of intellectual property. Faced with an ever-widening landscape of competitors, today’s supplement firms increasingly seek to protect their formulations, ingredient blends, and material sources. By keeping the process in house, a company can maintain the utmost secrecy.

“People are more concerned about competitors popping up and copying their products,” Langhorn says. “We see people bring processes in house because they don’t want to send that information to a toll manufacturer where that technology could potentially be shared with other people.” This sharing may not even be done intentionally, he points out. “A toll manufacturer may be producing blends for several different clients, and their knowledge of what’s in one person’s blend compared to another’s may inadvertently cause them to make recommendations that would be a breach of that confidentiality.”

Advanced Machinery Enables Advanced Quality Control

Once a company does make the decision to manufacture internally, the company will need equipment that enables the firm to control quality. Luckily for today’s supplement makers, many types of equipment on the market today come with quality control built in.

Ross’s own mixing and blending technology, for instance, features built-in manufacturing and batch-production documentation controls. If FDA inspectors should knock on a supplement manufacturer’s door, says Langhorn, “the control system knows what was added in the batch record and then creates the batch record of how long it ran, when it was batched, and confirmation of the ingredients. It then stores that information in an unalterable document so that when FDA comes in, they can pull those unalterable documents and see for certain how each batch was processed.”

“It takes a lot of the liability, a lot of the paperwork, out of the equation, and that’s appealing to a lot of customers that have to comply with FDA,” he adds.

Perhaps one of the most important ways in which equipment suppliers help today’s dietary supplement manufacturers is simply by understanding their needs-their needs for quality control, for regulatory compliance, and for bigger and better production. Langhorn points out that most of Ross mixers and blenders are custom-tailored to a company’s production needs, taking into account such parameters as horsepower, bulk densities, intended (and future) batch sizes, and the diversity of ingredients to be blended, including the ratio of active to inert ingredients.

Not all companies are ready to jump in all at once, of course. Some firms “start off on a small scale and say, ‘We’re going to bring some of this in house.’ And all of a sudden, they’re ramping up to larger blenders to bring it all in house,” Langhorn says.

As conversations around quality and safety continue to develop in the dietary supplements field, equipment suppliers will continue to play a key role in the discussions.

Companies who choose to invest in in-house manufacturing may see unique dividends, says one equipment supplier. 

Quality Control and the Benefits of In-House Manufacturing

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