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The next generation of disruption in dairy alternatives

The large, complex U.S. dairy market faces several forces that are influencing growth and challenging the status quo. One trend impacting the industry across cheese, milk and yogurt, among other categories, is the competition from plant-based alternatives.

Once a nascent, niche trend driven by a narrow subset of consumers, plant-based formulations are now surging in popularity with more products entering the mainstream market. Growing concerns about the environment, animal welfare and personal health are attracting consumers to plant-based products, poaching sales from traditional dairy sectors in the process.

The rise and disruption of plant-based dairy alternatives has been steadily building for many years. Most notable is the category’s recent evolution from a rapidly growing upstart sector to one with widespread availability and mainstream appeal. In a way, this signals the onset of a second generation of plant-based alternatives, beyond merely acquainting Americans with the idea of consuming plant-based products and focused on expanding the sector to new frontiers and diversifying its offerings.

In the minds of many, dairy alternatives remain associated with traditional cow’s milk. For generations, cow’s milk has been as much of a staple commodity for U.S. consumers as any food item can be. Understandably, soy-based milk alternatives were the face of this sector for many years. More recently, the most sector expansion has been a result of developing other popular milk alternatives from ingredients such as almonds and cashews. In fact, sales of milk alternatives other than soy-based varieties skyrocketed in the U.S. from less than US$100 million in 2008 to just under US$2 billion in 2018, according to Euromonitor International.

Competition has increased significantly as more players enter the market, and, much like other fast-growing industries, concerns have grown over the potential of an impending stagnation as a ceiling is approached. Considering these concerns, manufacturers of dairy alternatives have sought new growth frontiers, a pursuit that has influenced the evolution of new formats that are quickly gaining popularity. Free-from-dairy ice cream and yogurt products have rapidly proliferated. According to Euromonitor International, both categories achieved double-digit retail sales growth in each of the last five years behind strong consumer enthusiasm for products, surpassing taste expectations and carving out notable portions of the market as a result. Though much smaller sales, free-from-dairy cheese products and even coffee creamers have also seen promising recent developments, demonstrating the potential for plant-based products to thrive well beyond serving as a contrast to milks and instead functioning as a class of viable alternatives to dairy more broadly.

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Where is innovation in sports supplements?

Food and beverage delivery have grabbed much of the cool factor attention in the sports nutrition market. However, the most bang for the buck is still in supplement form, which can deliver higher amounts of beneficial ingredients for building muscle and improving recovery/adaptations, among other body goals. Where supplement brands have a tougher task in innovating delivery—will gummies infiltrate the sports supplement space?—they can create unique products in areas such as formulation and flavor.

How is your brand innovating in the sports supplements market? NEXTY Awards at SupplySide West 2019 is a chance for such brands and products to win recognition for quality innovation.

Flavor licensing is one area where some brands are winning consumers. While pre-workouts that break free from the usual common citrus flavors to bring candy or mocktail flavors, for example. Protein powders that go beyond the Neopolitan ice cream flavors to bring a wider array of dessert (think pie) and indulgent flavors (e.g. crème brulee and hazelnut latte).  

Industry market specialist Josh Schall, J. Schall Consulting, explained Man Sports first introduced flavors based on famous candy brands like Sour Patch Kids and Starburst, but the company had to use similar sounding names. Then Ghost Nutrition licensed actual consumer brands such Warheads, Swedish Fish and Chips Ahoy. Licensing flavors is part of what Schall calls creating an exclusive experience for consumers.

Schall and Ghost CEO Dan Lourenço will present during SupplySide West’s sports summit, Finding New Pathways in Sports Nutrition, on Wed. Oct. 16 in Las Vegas.

Novel and emerging ingredients may also help sports supplement brands standout. This is a bit harder to do on the protein side, even with the slight whey protein tweaks like native and grass-fed whey. New Hope’s NEXT data analysis (based on Expo West exhibitors) has shown a big dip in innovation in the whey, casein and milk protein categories, with more opportunity for these ingredients in food and beverage. Egg protein was the only animal protein showing positive innovation numbers in supplements. Most protein innovation activity in supplements was on the plant side, with pea and rice dominating and hemp lagging—a real opportunity area, NEXT said.

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Higher intake of linoleic acid may reduce type 2 diabetes risk

Linoleic acid, a polyunsaturated omega-6 fatty acid (PUFA) found in nuts, seeds and most plant oils including soybean, canola and flaxseed, is one of two essential fatty acids (EFAs) humans must obtain through diet. The findings suggest swapping saturated fats, trans fats or carbohydrates for linoleic acid is inversely associated with risk of type 2 diabetes.

For the study, researchers from the Chinese Academy of Sciences in China used data from 83,648 women participating in the Nurses’ Health Study (NHS; 1980-2012), 88,610 women from NHSII (1991-2013), and 41,771 men from the Health Professionals Follow-Up Study (1986-2012) to examine the association between intakes of n-6 polyunsaturated fatty acids (PUFAs) and type 2 diabetes risk. There were 18,442 type 2 diabetes cases during 4.93 million person-years of follow-up.

The researchers found dietary n-6 PUFAs accounted for an average of 4.4 to 6.8% of total energy and consisted primarily of linoleic acid (at least 98%). When extreme n-6 PUFA quintiles (highest versus lowest) were compared in multivariate-adjusted models, the hazard ratio for type 2 diabetes risk was 0.91 for total n-6 PUFAs and 0.92 for linoleic acid. In a model allowing for isocaloric substitution, type 2 diabetes risk was 14% lower when linoleic acid isocalorically replaced saturated fats (5% of energy), 17% lower when substituting for trans fats (2% energy), and 9% lower when substituting for carbohydrates (5% energy). There was no impact on diabetes risk when n-3 PUFAs or monounsaturated fats were replaced with linoleic acid.

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Unpacking the consumer mindset driving sustainable food product production

The crosshairs between environmental concerns and global warming, and diet and lifestyle choices affecting personal health, is bringing the concept of sustainability into the forefront of the U.S. consumer’s mind. In fact, these ideas are driving consumer product purchasing decisions and impacting ingredient supply chains and processes.

Learn more about this changing market and the growth in plant derived ingredients in this Food Insider Journal infographic.

To View The Infographic Click HERE

Food and supplement industries battle sharply higher tariffs

The dietary supplement and food industries face continued tariff challenges, including a recent increase to 25% for many dietary ingredients imported from China and new retaliatory tariffs from India on nuts and produce coming from the U.S. Industry leaders, including several trade associations, have fought the tariffs via Congress, submitting comments and participating in public hearings on the China tariffs, but exclusion from the tariffs is far from a guarantee.

President Donald Trump and China president, Xi Jinping, agreed at the G-20 economic summit in Japan on June 29 to refrain from imposing any new tariffs while they restart trade talks. This puts a halt to the pending List 4 tariffs that would essentially cover the approximately US$300 billion in remaining imports from China not included in the first three lists of tariffs, including several dietary ingredients—many other dietary ingredients appeared in List 3.

While the Trump administration approved an exclusion process that will apply to the many dietary ingredients already subject to the higher tariffs, the exclusions for the earlier waves of tariffs were few and took a long time to process.

At G-20, Trump also spoke to India’s Prime Minister Nerendra Modi about the recently enacted tariffs by India on nuts and produce imports from the U.S., including apples, walnuts and almonds. The tariffs were widely seen as retaliation for the early June removal of India as a U.S. preferred trade partner—the Trump administration said India did not give the U.S. “equitable and reasonable access to its markets.”

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Supply chain partnerships deliver innovation to consumers

Consumers shopping for the latest beverage, snack or supplement have their list of criteria. They’re looking for clean labels, great taste, powerful nutrition … or all of these. And they’re increasingly interested in the story behind the brand. The growing interest in transparency is shining a light on the full supply chain, and offering companies the opportunity to showcase the partnerships they’ve developed.

Last year, Natural Products INSIDER called out some of these partnerships in the Esca Bona Supply Heroes series, designed to highlight brands that are using new approaches to repairing and solving challenges in today’s global supply chain.

Consider the work done by Alter Eco, maker of decadent chocolate products and holder of organic, Fair Trade and B-corp certifications. The company has developed strong collaborative relationships with cacao producers on the ground, focusing on improving the quality of life of all stakeholders. But it’s also taken things a step further with its work with Pur Projet, supporting the organization’s insetting philosophy and model with the goal of becoming a carbon negative business.

At the same time, not all aspects of the supply chain attract the same level of interest. Consider the laboratories that play a critical role in ensuring products meet established specs and are safe for consumption. Whether in-house or third-party, labs are an important part of the full process. Consider how Gaia Herbs, via its Meet Your Herbs program, is offering a look at not only the ingredient—traceable to the field—but also the testing results for every product.

Ultimately, it takes a village to raise a CPG brand. From the ingredient suppliers through contract manufacturers, the packaging suppliers and laboratories, each one has a role to play in helping a finished brand marketer bring a unique product to life.

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Digestive health market flourishing

Digestive health used to be a taboo topic, but the times they are a-changin’. NMI’s 2019 Supplements/OTC/Rx Consumer Insights & Trends report revealed 46% of consumers managing digestive problems are using supplements to do so, reflecting 52% growth from 2011 to 2018. In fact, the market research firm named digestive health among 2019’s top trends.

Probiotics deserve kudos for the years it took to educate and penetrate the market. They paved the way for simple conversations around yogurt and fermented food and beverages contributing to “regularity,” to more sophisticated messaging on the key role of the microbiome in overall well-being. Probiotics also opened the door for a range of ingredients, including prebiotics/fiber, postbiotics and digestive enzymes—some of which are just starting to gain momentum.

Although the market is ready for new offerings, brands must be thoughtful in their approach. “With digestive health gaining more popularity by consumers, many me-too products on the market are popping up, where formulations are simply copied and do not offer either a true unique point of differentiation, or nutrients in levels that have been supported in science to actually have a true benefit to the user,” noted Kara Landau, founder at Uplift Food. The nutrition advisor to the Global Prebiotic Association added, “I always recommend brands think about how their products can be developed with a unique spin to ensure they have a strong message that speaks to consumers, as well as one that incorporates ingredients in levels that can really bring about a positive effect on either digestive or gut health.”

To her point, a 2017 review pointed out only 5% of adults consume the recommended level of dietary fiber—and that although fiber supplements appear to provide a concentrated, convenient source of fiber, most do not provide the health benefits associated with it (J Am Assoc Nurse Pract. 29[4]:216-223). The review authors noted, “Not all fibers provide a laxative effect or regularity benefit, and some can even be constipating.”

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Nutraceuticals for immune support: Growing standards, room for improvement

From traditional herbal infusions to today’s sophisticated formulations, nutraceuticals for immune support have come a long way. Owing to the pull of scientific progress and push of demanding consumers, we are entering an era where certain products are delivering the promised value with guaranteed safety and clinical proof. But this is far from the standard. 

Astragalus, elderberry and Echinacea infusions are among the earliest immunity-boosting additions to diet. With their successful track record and word-of-mouth popularization, it is understandable they are still regularly used, yet in most cases, they have not advanced in decades or have even dropped in quality. A large portion of immunity nutraceuticals are still simple herbal extracts, commodities that rely solely on historic use and bibliographical data for proof of efficacy. Additionally, ingredients included in a product don’t necessarily have a connection to assumed benefits apart from the name. Questionable origin, interchangeableuse of different plant parts and adulterants are producing ineffective, unsafe supplements that contribute to consumers’ decreasing trust. For a credible product, herbal extract inclusions need to be traceable, have direct research and an established safe dosage, especially when formulating for children.

With increased understanding of biochemical processes in the human body came the next big players of the immunity market: vitamins and minerals. Starting as simple chemical compounds such as ascorbic acid, vitamins and minerals have made an immense leap to what we see today. Branded, patented, clinically supported ingredients with advanced delivery technology are widely available and boast increased stability, controlled release, enhanced absorption or bioavailable chemical states. More importantly, consumer awareness of the range of quality and consequence of lower price is most present for these ingredients. We see partners on markets worldwide increasingly interested in formulations containing vitamins with improved characteristics, seeking to satisfy the growing demand of educated users and to differentiate in a noisy category.

Differentiation can also be achieved by more biologically complex ingredients that later entered the global spotlight. Colostrum, propolis and fungal extracts have brought a new dimension to the industry, correlating with the natural alternatives trend and sparking substantial investment into clinical research. The relatively new concept of immunostimulation is showing undeniable results (Diets, Immunity and Inflammation. 2013;416-434), but keeping the immune system in an excited state should be approached with caution. The benefit of long-term use of activating ingredients such as beta-glucans is questionable. Harmful over-boosting is a new topic, not yet widespread in the industry, and will likely be an influence in future product development trends.

The realization of the complexity of the immune system and its connection to the gut has sparked an exciting new era of research and a completely different angle. Investments into consumer education have made a remarkable shift in gut health. Probiotic product launches with immunity positioning are steadily rising yet may come with some drawbacks: the discrepancy between claim and effect due to personal microbiome differences, and stability issues. The latter are solved with convenient and booming prebiotics.

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FDA to issue ‘discretion policy,’ interim rule on CBD in dietary supplements

U.S. Sen. Ron Wyden on Tuesday urged top federal health officials to announce a “formal enforcement discretion policy” by Aug. 1 regarding CBD as a food additive or dietary ingredient in supplements.

Without such a policy, “hemp producers and their customers will continue to be left in a regulatory gray zone,” Wyden, a Democrat from Oregon, wrote to the leaders of FDA and the U.S. Department of Health and Human Services (HHS).

In a letter to HHS Secretary Alex Azar and FDA Acting Commissioner Ned Sharpless, M.D., Wyden also urged FDA to publish an interim final rule to ensure CBD can be lawfully sold in food and dietary supplements, pending the agency’s publication of a final rule.

Congress in 2018 removed hemp from the federal Controlled Substances Act (CSA), but lawmakers preserved FDA’s authority to regulate cannabis-derived products.

FDA has maintained CBD cannot be lawfully added to conventional food or marketed as a dietary supplement because essentially the compound was first studied as a drug. The agency, however, has authority to create an exception, and it hosted an all-day public hearing May 31 to examine issues around its regulation of cannabis-derived products.

Wyden characterized as “fully unacceptable” a suggestion by FDA that publishing a final rule authorizing the use of hemp-derived CBD in dietary supplements could take three to five years.

“The regulatory confusion and uncertainty surrounding CBD cannot continue for that length of time,” the senator wrote.

Wyden also urged FDA to streamline the process for reviewing safety-related notifications for hemp-derived CBD ingredients and dedicate staff to the process.

“I feel strongly the FDA must undertake a process to make lawful a safe level for conventional foods and dietary supplements containing hemp-derived CBD,” Wyden said.

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Sports nutrition for active consumers

The weekend warrior, the person cramming most of their exercise into two days off from work, is not new. Yoga is not new, but its huge bloom of devotees in western countries like the United States is newish. CrossFitters and Tough Mudderers also are newer. Add to these high-profile exercisers a cornucopia of active consumers at gyms, parks, beaches, trails and all manner of courts, tracks and fields, and you get a big mass of amateur athletes ripe for sports nutrition product use.

We are talking many millions of active people. CrossFit has more than 15,000 official affiliates, with around 4 million participants, according to CrossFit. More than 3 million people have competed in one of the many races annually, and the organization said participation is growing thanks to shorter race options. According to the Outdoor Association, almost half of Americans (49 percent, or 146 million people) engaged in outdoor recreation in 2017, and running, including jogging and trail running, was the mostpopular activity in terms of both participants and total annual outings.

Anthony Almada, a co-founder and fellow of the International Society for Sports Nutrition (ISSN) and consultant to and spokesperson for Indena, highlighted “some inspiring findings from the ongoing USA National Health and Nutrition Examination Survey (NHANES), published in February,” such as: about 8 percent of Americans are performing 2.5 to <5 hours of vigorous, or 5 to <10 hours of moderate exercise per week, and  about 41 percent are engaged in ≥ 5 hours of vigorous, or ≥ 10 hours of moderate exercise, per week.

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