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Driving New Product Development

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The Driver of New Product Development: The Empowered Consumer

Today’s supplement consumers have more options, more knowledge and higher expectations than ever before. They know the difference between an ad and a listing or a review and a sponsored post. This consumer skips the marketing jargon and heads to the comment section, they have Google at their fingertips and unlimited access to information. They compare ingredients, benefits, verify certifications, have preferred dosage types and are excited by new technologies. They have a voice and more outlets in which to share their opinions. Understanding and translating what they’re saying into new product development or NPD is the driving force behind success, growth, or survival for many nutraceutical manufacturers.

Factors to Consider During NPD

Several considerations go into developing profitable, safe, effective and compliant nutritional supplements. “No business activity is more heralded for its promise and approached with more justified optimism than the development and manufacture of new products,”1 but success rates are low when it comes to NPD. Boston Consulting Group predicts that for every 1,000 ideas created, only 100 will be commercially viable and just a few will succeed in launching their product.2

Asking the right questions is important to fully assess the product value, correctly position the product in the market and justify the need.

Considerations on market and consumer trends, research and development, formulation and choosing the correct delivery and dosage type, ingredient availability and sourcing, and scientific and regulatory considerations are the groundwork of NPD, and every choice matters.

Market & Consumer Trends

The constantly evolving consumer, increased competition and technological advancements are a fraction of what goes into NPD, but in the end the customer will always be the most important component of new product development. While some brands are taking off with TikTok ads and influencer discount codes, others are focusing on unique combination formulas that target multiple needs, are personally tailored or naturally sourced—whatever the sales driver, the market is saturated and the competition stiff.

Research & Development

An effective research and development plan will identify new opportunities and explore new ingredients, products and applications. How much money and resources should be committed to R&D is an extremely crucial component of a company’s long-term success in the market, and comprises of research, batch testing of new samples, reformulating a product for taste, and other activities in addition to clinical research trials and bench studies. Companies with access to highly trained and educated scientific support are at a distinct advantage over their competitors in the development and new product areas.

Formulation in NPD

To increase market appeal and improve sales, manufacturers often use new formulas to differentiate their products. However, incorporating nutritional ingredients into novel formats can be problematic, particularly because many herbals and botanicals are bitter, gritty or difficult to process. Successful nutraceutical development requires an understanding of the fundamental aspects of the physical and chemical properties of various forms of the ingredients, as well as the application of appropriate manufacturing techniques, selection of the appropriate excipient, and use of appropriate manufacturing processes.3

Choosing a Dosage Type For Your NPD

Despite all of the advancements in delivery systems, such as gummies, lozenges, tincures and even jelly beans, studies show that 42 percent of supplement users still prefer capsules, while 41 percent prefer tablets.4

As manufacturing trends continue to evolve and new formulas become available, the informed consumers will have even more options and will be able to tailor their supplement for their specific needs. The ability to choose from various delivery and flavor options, absorption rate, benefits, convenience factors and visual appearance, will continue to challenge development in the nutraceutical market and push the boundaries of innovation.

Post COVID Ingredient & Supply Chain Challenges Affecting NPD

COVID-19 caused a seismic shift in the demand for nutraceuticals, which was countered by the fact that a wide range of ingredients and manufacturing components are produced in high-impacted areas of the world and were directly affected by the lockdowns, closures, skeleton crews and modified production schedules.

The natural products industry is particularly dependent on China for raw materials. Upward of 75-80 percent of all the natural product raw materials used in dietary supplements are sourced from China5 and supply shortages increased 638 percent globally in the first half of 2021.6

In addition to ingredient shortages and delays, suppliers, distributors and manufacturer alike are all experiencing longer transportation times and shipping cost increases. During these volatile and unstable times it’s more important than ever to source functional and quality ingredients and choose a reliable manufacturing partner with the materials and infrastructure needed to satisfy rising demand and help strengthen your supply chain.

Scientific & Regulatory Considerations

When it comes to claims, purposes and marketing methods, nutraceuticals are pragmatic. Their definitions aren’t universally accepted, and they hold varying regulatory definitions and registration processes globally. In the U.S., nutraceuticals are regulated as “drugs, food ingredients and dietary supplements” due to the lack of a definite definition.6 In contrast, in Europe, the European Food Safety Authority (EFSA) acknowledged the nutraceuticals terminology and outlined regulations to ensure their safety.7 For companies in the natural products market, science and regulatory compliance play important roles in NPD, and they must evaluate what steps need to be taken to access the market and what requirements need to be filled in order to be compliant with the regulations.

NPD Recipe for Success

Successful NPD is dependent on many variables such as market demand, ingredient availability and quality, production capabilities and regulatory processes, but in the end the product development process begins with consumer trends and finishes with consumer acceptance and adherence. NIE

References:

1 https://hbr.org/1989/05/the-new-product-development-map.

2 Boston Consulting Group https://www.bcg.com/publications/2020/using-uncertainty-to-your-advantage.

3 www.longdom.org/proceedings/formulation-of-nutraceuticals-and-dietary-supplements-formulation-and-regulatory-challenges-32379.html.

4 NMI, “2015 Global Supplements/OTC/Rx Consumer Research Study.” www.nmisolutions.com/opt/studies/NMI-2015-Global-SORD-Research-Study.pdf. Accessed October 4, 2017.

5 www.nutraceuticalsworld.com/contents/view_Content-microsite/2020-03-19/covid-19-and-supply-chains-the-story-so-far/.

6 www.resilinc.com/press-release/factory-fires-up-150-in-the-first-half-of-2021-contributing-to-record-breaking-supply-chain-disruptions-and-supply-shortages/.

7 www.researchgate.net/publication/335682329_Nutraceuticals%27_Novel_Formulations_The_Good_the_Bad_the_Unknown_and_Patents_Involved.

Evelyn Reinson is the Head of International Marketing at ACG, responsible for global marketing strategies of the company’s product range of capsules, films & foils, engineering, and inspection worldwide. For more information, visit www.acg-world.com.

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