US_Market Brief 2011 Presentation (Josef Brinckman)

8/3/2019 US_Market Brief 2011 Presentation (Josef Brinckman)

http://slidepdf.com/reader/full/usmarket-brief-2011-presentation-josef-brinckman 1/24

The North American Market

for Natural Products

By: Kerry Hughes and Josef BrinckmannITC Consultants

Date: 26th September 2011



What Looks More Healthy?

2

or



Overview-Key Trend: “Super Foods”

According to Nativas (a marketer of Super Food Products) President,Zach Adelma:

[The] “ appetite for international food combined with the growing trend for healthier organic options is fueling the popularity of organic 'power foods' from around the world…”

3



Overview-Key Trend: “Super Foods”

“…By reintroducing ancient, natural foods to the western world, Navitas Naturals is expanding the functional food

category and providing options with more bio-available essential nutrients, vitamins and minerals than most supplements and chemical extracts."

4



Market Brief Structure

Sections:

1. Market overview

2. Product descriptions

3. Market access

4. Prices

5. Distribution channels

6. Supplier qualifications

7. Packaging and labelling

8. Sales promotion9. Market prospects for exporters

5



1. Market Overview - The economy and the

natural foods marketKey Trends Predicted by Food Flavor and Ingredient Outlook 2011 Report:

Flavors from Around the Globe- ethnic foods and flavors, providing interest without taxingsmaller food budgets

Sustainability - greater use of natural, organic, local and antibiotic- and hormone-free ingredients& these are connected to more holistic lifestyle

Wellness Overhaul- food will get more attention as the foundation of health & Better integratedinto lifestyle with wellness

Plethora of Produce- vegetables will move into the center of the plate and meals more focusedon vegetables

Flavor & Ingredient Crossovers - crossover of sweet and savory in recipes

Satisfying Sweets- Agave syrup, due to its low-glycemic appeal, will continue to grow inpopularity, as well as extracts made from Stevia leaf. Superfruits, such as blueberries andpomegranates, will grow in popularity

6



1. Market Overview - The economy and the

natural foods market

“American consumers are more engaged than ever in managing their

health through food in hopes of curing what ails them or preventing ailments to which they are susceptible,” says Kimberly Egan, CEO of CCD. “ Many of these curative foods have roots in ancient times, and have been consumed by cultures around the world for centuries.”

7



1. Market Overview - Market Channels

• Dietary/Herbal SupplementIn the US - Regulated by FDA as a subset of food products. FDA Notificationrequired.

In Canada, these products are called Natural Health Products (NHPs) andregulated as drugs requirement pre-marketing authorization.

• Food & Functional Foods (Superfoods fit here)Regulated as Foods by FDA, or by Health Canada - Need to satisfy safetyregulations of Foods. No Official Definition of Functional Foods or Super Foodson either market

• Cosmetics & Body Care

In US- Federal Food, Drug & Cosmetic Act (FD&C Act) and Fair Packaging andLabeling Act. There are “non-drug” cosmetics and “drug” cosmetics.

In Canada-Health Canada’s Cosmetic Program (through various acts).

8



1. Market Overview - Market Channels

• Botanical Drugs

In US- some of the top-selling herbal products are OTC drug products (e.g.psyllium- and senna- based laxative drugs) sold mainly in pharmacies. And awide range of herbal homoeopathic drug products are sold in health and naturalfoods stores placed right alongside herbal dietary supplement products.

In Canada- botanical drugs (herbal medicines) require product license applicationand pre-marketing authorization under the Natural Health Product regulations.

• Pet Foods

In US- regulated similar to other animal feeds-no premarket approval needed, butneed to be safe.

In Canada- there is the “Specified Risk Materials (SRM)” list.

9



3. Market Access - sanitary & safety regulations

• GACPs (Good Agricultural & Collection Practices) – not legislativelymandated but buyer’s may inspect and qualify harvest sites according to aspecific GACP Standard.

• GMPs (Good Manufacturing Practices) – GMP compliance is mandatorywith different sets of GMPs for different types of products (e.g. cosmetic,

dietary supplement, food or homoeopathic drug)

• Bioterrorism Act – requires registration of foreign facilities and prior noticeof imports to FDA

• Phytosanitary Certificates – required by USDA for shipments of plants

and plant parts.

• Food Color Certification – Natural colors of plant origin are exempt.

10



3. Market Access – what about new ingredients?

• Dietary Supplement – if the substance was not in U.S. commerce priorto 15 October 1994, a New Dietary Ingredient (NDI) submission to FDAis necessary.

• Drug – if the substance is not already classified by FDA as GenerallyRecognized as Safe and Effective (GRASE), a New Drug Application(NDA) would be necessary.

• Food– if the substance is not already classified by FDA as Generally

Recognized As Safe (GRAS), it needs to be affirmed as GRAS for itsspecific intended use as a food.

11



3. Market Access - Quality Requirements

• Supplier Qualifications – Under GMP rules, buyers can purchase only from“qualified” suppliers. The QC Unit should be responsible for qualifying suppliers.

• Specifications – Under GMP rules, specifications are required to test identity,

composition, quality and purity. Dietary supplement and food products can havefood-grade specifications. Pharmacopoeial quality standards are voluntary fordietary supplements but mandatory for herbs used as actives of drug products.

• Monographs – There are FCC and NF monographs available for food quality

standards and USP monographs for both dietary supplement and drug qualityspecifications.

• Canada’s NHP Compendium of Monographs – Quality standards

accepted for NHP active ingredients include BP, PhEur and USP monographs.

12



3. Market Access - Emerging Ecological and

Social Certifications / Labels

• Fair Trade (including FLO Fairtrade, FWF FairWild, and IMO “Fair forLife” Fair Trade Certified)

• Organic (NOP or Demeter)

• Rainforest Alliance

• Whole Trade Guarantee (Whole Foods Market)

13



5. Distribution Channels - Understanding Supply

Chains

Direct-to-Consumer:

Producer ∩ Consumer

Direct:

Producer ∩ Manufacturer ∩ Retailer

Less Direct:

Producer ∩ Processor ∩ Manufacturer ∩ Distributor ∩ Retailer

Indirect: Producer ∩ Processor ∩ Exporter/Port ∩ Importer/Port ∩ Distributor ∩ ContractManufacturer ∩ Retail ∩ Consumer

14



5. Distribution Channels - Successful models for

foreign natural ingredient suppliers in the US market

• Difficult to succeed in the US market without maintaining a strongpresence inside the US, including sales, marketing, warehousing,technical support, etc

• Without own warehousing or sales/marketing operation, still possibleto succeed through strategic relationships with well-positioned UScompany. For example, by granting the American company exclusiverights to distribute and market your brand of natural products to the US

market. This could occur under your brand, or co-branded or under theirestablished brand.

15



5. Distribution Channels - Succeeding in the

Supply chain- Finding the right partner or adding value

• Increasing Sales, or Increasing Margin

Consider that…

• Finding the right partner and investing in this relationship

may be a more valuable use of time

16



8. Sales Promotion – natural ingredients

Supply Side West

Las Vegas, NV

10-11 October 2011

engredea Ingredients & Innovation

Anaheim, CA

9-11 March 2012

17

18



8. Sales Promotion – finished products

Natural Products Expo West

Anaheim, CA

9-11 March 2012

Natural Products Association Marketplace

Las Vegas, NV

15-16 June 2012

18

19



9. Market prospects for exportersIdentified by Market Brief 2011

1. Stable prospect for herbal medicines/dietary supplements

• Growth has now slowed considerably – market maturation, and

increase in regulations and enforcement.

• Dietary supplements in the US have proven to be ‘recession-proof’, asthe older “baby boomer” generation have favored them as a way to stayhealthy compared to prescription drugs and preventable medical

procedures – particularly true for supplements that have been found tobe effective for specific gender- and age-related conditions…

19

20




2. Growing Prospect for Super Foods

Super foods are particularly popular among the younger generations

(those 18-29 in the US)• Group with a some discretionary income

• Remained the most optimistic about the future of the economythroughout the recession

• More likely than other generations to say they like to try out new foods

and drinks

20

21




3. Growing prospect for interesting oils

• Top sellers in the US and Canadian market is DHA and other omega-3

fatty acids

• Among the Peruvian natural products, sacha inchi is showing the mostpotential in this area, however, issues around source, stability andpricing have not yet been well established – it may be possible to

reposition sacha inchi oil with a “qualified health claim” if product can beshown to meet the specified omega-3 fatty acids content requirementsfor the allowed claim.

21

22




4. Growing prospect for sustainable & ethnical

Certifications, such as Fair Trade, combined with organic

• High area of market growth (especially for Fair Trade coffee, chocolate,cosmetic (cocoa butter), ice cream, spice and tea brands).

• Fair Trade (& other Social Certifications) also provide opportunities forproducers, guarantees of higher prices or premiums in the market,

along with good working conditions for farmers or farm workers in thesupply chain and long-term relationship building with caring buyers inthe U.S.

22

23



Peruvian / South American Botanicalswith High Interest

Camu Camu a juice, super food, functional food and dietary supplement (for itsVitamin C content, antioxidants, and anti-inflammatory properties), and perhaps incosmetics (the seed oil or fruit pulp extract), or as a natural color or flavor

Cupuaçu juice, super food, functional food and dietary supplement (for itsantioxidants), and perhaps in cosmetics (the fruit pulp extract), or as a natural flavor

Lucuma juice, super food (for its nutritive content, including fiber, vitamins andminerals), functional food and dietary supplement (for its antioxidants), and perhaps incosmetics (the fruit pulp extract), or as a natural flavor

Sacha Inchi super food (as the nut), functional food and dietary supplement (for itsomega-3 fatty acid content), and perhaps in cosmetics (the oil)

Maca super food (as a powder), functional food (in various potential forms), and willcontinue to have a market for its dietary supplement use

Chia super food (as the seeds or oil), functional food and dietary supplement (for itsomega-3 fatty acid content), and perhaps in cosmetics (the oil)

23

24



Key Concluding Thoughts

• Exciting time for Botanicals on North American Market, asConsumers interested in exotic new foods & flavors, increasinghealthy attitudes

• However, also stricter scrutiny by consumers and government:safety requirements, sustainable and eco-social demands, andstronger evidence needed to support claimed benefits

• To reach market, will have to score well in all these areas, andprove efficacy through clinical research

24

US_Market Brief 2011 Presentation (Josef Brinckman)

Documents

Transcript of US_Market Brief 2011 Presentation (Josef Brinckman)