Regulations and quality issues increase demand of proprietary ingredients.

In the last 15 years or so, the supply of natural ingredients has exploded. Dietary supplement and/or functional food manufacturers are faced with an ever-expanding array of ingredients to consider for their formulations. The concept of branding an ingredient has become more popular over the past 10 years, and it remains a viable way for suppliers to help differentiate their products within the marketplace.

In general, two major forces are driving growth—recent quality issues in the marketplace and current good manufacturing practices (cGMPs), said Bob Green, president of New Jersey-based Nutratech Inc. “While finished product manufacturers are ultimately responsible for meeting cGMPs, they recognize the benefits of working with suppliers of scientifically supported ingredients that follow strict quality assurance/quality control guidelines. Branded ingredients meet these criteria and provide a quality value. With branded ingredients, manufacturers enjoy the safety, security and support necessary for the long-term viability, confidence and stability of a consumer brand.” 

Director of Marketing and Communication Mathieu Dondain with Nexira, a global supplier of innovative ingredients based in Rouen, France, said that regulatory issues in the EU slightly hindered the booming market of proprietary ingredients as some manufacturers preferred to use generic ingredients with approved claims in their formulations.

“However, we can say that the market for proprietary ingredients is still a relevant market and the differentiation criteria are more demanding than few years ago,” he added. “Today, a proprietary ingredient needs to be easily recognizable with a real identity perfectly targeted to specific category and supported by a strong scientific background that is regularly updated.” 

Weiguo Zhang with Maryland-based Synutra Ingredients, which specializes in nutrients for healthy joints, said that after years of treating ingredients as commodities, the industry realized that “garbage in, garbage out” is a problem, and now proprietary ingredients are on the upswing. “The responsible core of the industry has become more engaged with suppliers in identifying where their ingredients are from, how they have been handled and verifying through ingredient testing in a more skilled way,” he said.

“In terms of our experience,” added Zhang, “when we started educating the industry about ways to combat chondroitin adulteration, we branded our chondroitin sulfate materials to provide guarantees on purity, quality and material integrity. We quickly grew from the fifth largest chondroitin supplier to the largest in the world.” 

Also enjoying popularity is Advantra Z®, Nutratech’s proprietary bitter orange extract, with double-digit growth since its introduction almost 20 years ago. “This year, we are experiencing our best year since 2004 and anticipate this pace to continue into 2014,” Green noted. “We attribute this growth to the recovering economy, the impact of the cGMPs and the FDA’s (U.S. Food and Drug Administration’s) new office in China, which has enabled closer regulatory attention. Our formula for success is a winning combination of scientific research, high-quality standards and highly developed supplier relationships, which actually anticipated the cGMPs.” 

Green added that Nutratech has been working with the best sources for bitter orange in Asia—primarily China—for almost two decades. “We’ve shared our knowledge and experience to help our longtime Asian partners hone their manufacturing practices and adopt Western quality control standards.” 

Differentiation 

A branded ingredient in the natural products arena usually begins with a hypothesis. Nutrients are rooted in nature, steeped in research and harvested through proven, real-life applications. “Without the proof, what’s the difference between a branded ingredient and generic?” Green asked. “Research investment must be ongoing for a branded ingredient to meet cGMPs, add value to a formula, build interest at retail, withstand detractors’ scrutiny and endure the test of time in an alwaysevolving industry.” 

“Commodities are often aggregated, which means where they came from, what they were made from and how they have been handled is anyone’s guess,” added Zhang, noting that while they are always cheaper, they carry inherent risks because of their anonymous origins. “Branded ingredients, if they have substance behind the brand in terms of quality and science, are going to give the consumer a better outcome, and be a much higher quality. 

” Nutratech has participated in and supported ongoing research ever since Advantra Z’s launch, which has uncovered the most significant benefit and differentiating factors for the ingredient, Green pointed out. “We discovered Advantra Z’s dominant amine is p-synephrine, a stable isomer of synephrine responsible for triggering thermogenesis and lipolysis. Advantra Z is devoid of m-synephrine, a vasoconstrictor often found in nasal decongestants and sprays and some generic bitter orange ingredients that has the potential for raising blood pressure in humans. Thanks to research, we discovered a huge selling point for why our branded ingredient should be selected over a generic alternative.” 

In addition, scientific research helps to precisely describe the ingredient’s activity and its mechanism of action, based on specific dosages and conditions of use. Branded ingredients offer an additional guarantee in terms of origin, traceability, Production process, quality and efficiency, Nexira’s Dondain pointed out. “A heavy scientific background helps to clinically demonstrate [an ingredient’s] nutritional or healthy properties. Proprietary studies utilizing clinical trials provide the strongest proof of efficacy, safety and uniqueness. Further, research allows to control efficacy, dosage and determine administration pathway,” he said.

No one denies that generic ingredients offer advantages: in addition to providing cost-effective solutions, traditional medicine shows a long history of use. Still, branded ingredients give additional guarantees, supported by scientific data coming from years of research, which increases the value and reinforces the ingredient’s benefits.

“Branded ingredients thus have remarkable marketing points that manufacturers of finished products can claim to differentiate their products,” Dondain added.

Consistency, Better Marketing 

By opting for a branded ingredient over a generic, manufacturers of finished products get the assurances that the ingredient has been carefully developed and scientifically tested. By choosing a branded ingredient, manufacturers buy an active ingredient, a full scientific dossier, a documented history of the existing ingredient uses and the guarantee of its activity in specific conditions of use, Dondain said.

Moreover, manufacturers can take advantage of the branded ingredient’s reputation and add reliable selling points to their marketing strategy.

Stable supplier relationships are another key step in the quality control process, added Green, as most branded ingredients require stringent harvesting and manufacturing methods and other quality assurance protocols from production through packaging. “It’s simply not feasible to change suppliers overnight and expect them to deliver the quality U.S. consumers—and the cGMPs—demand,” Green noted. “We’ve always developed long-term partnerships with our Asian suppliers. And we work with them—hands-on— on an ongoing basis to help them hone their manufacturing practices. That’s the only way to guarantee consistent quality from every batch.” 

The assurances vary depending upon the ingredient, but in the case of Synutra’s branded chondroitin, the assurance is that the material has been tracked from raw material through processing, so the animal origin and handling of the material is guaranteed, said Zhang. “This is particularly important for those ingredients that are subject to adulteration, like chondroitin.” 

Cost is often an issue with branded ingredients, so what exactly are manufacturers paying for and why is it worth the investment on their end?

“With the growing awareness of economic adulteration, responsible supplement manufacturers began turning back to branded ingredients for a number of reasons,” said Zhang. “The cost is higher, but there is much less risk of adulteration, the consumer will realize the benefits they expect and liability is minimized. Additionally, the less trouble manufacturers have with ingredients coming in to their facilities, the more they are free to focus on other areas of GMP compliance.” 

Science Requirements 

To show the efficacy of its branded ingredients, Nexira conducts at least a clinical study, which means that preliminary studies (in-vitro, in-vivo and pilot studies) were already completed. “Clinical studies are necessary as the branded ingredient needs to be tested in human nutrition. In-vivo and in-vitro studies could help to understand the mechanisms of action,” said Dondain.

These scientific results are benefits in the value of the branded ingredient. Suppliers have to build a complete scientific dossier describing the properties and the beneficial activity of their branded ingredients in an understandable way.

“Even in B-to-B relationships, the supplier needs to present its branded ingredient to convince manufacturers, retailers and consumers,” Dondain added. “Scientific results can be associated with an educational brochure to explain the benefit of the branded ingredient in human health.” 

To increase the scientific credibility, the publication of the study results in renowned scientific reviews offers a strong advantage. “That is what we did at Nexira with our branded ingredients such as Cacti-Nea™, NeOpuntia™, Fibregum™, etc.,” Dondain noted. “Finished product manufacturers who choose our branded ingredients have a complete knowledge of the scientific dossiers and can be confident on the efficiency of what they buy.” 

With branded ingredients and their specific research, companies can build credibility and their competitive advantage. It allows a company to convey that it truly values science, ethics and integrity, which establishes long-term success with consumers, retailers and the scientific community.

For Synutra Ingredients, the company’s area of expertise with chondroitin is in its testing methods. “The commonly used method does not identify adulteration,” Zhang explained. “We lead the industry in efforts to keep the material clean and assay values true. This is different from ingredients that don’t already have such extensive documentation for efficacy.” 

Green offered the key question for a finished product manufacturer and consumer to ask: Has this ingredient been on the market long enough to confirm its efficacy and safety? Advantra Z’s efficacy and safety are supported by more than 30 research studies conducted over more than 15 years, he said. “It is truly compelling when an ingredient is validated not just by one or two studies, but by a preponderance of evidence conducted over a period of time. That is the case with Advantra Z.” 

In fact, he noted, more than 15 double- blind, placebo-controlled research Studies support the safety and efficacy of bitter orange (Citrus aurantium). “Most of these studies use Advantra Z rather than generic bitter orange extracts. The most recent published research study underscores the proven track record of Advantra Z in the arena of long-term studies. This is particularly significant because long-term studies are a rarity in the natural products industry.” 

Regulatory Watch 

The cGMPs have increased regulatory scrutiny and, as industry leaders, proprietary ingredients should anticipate added scrutiny because these are easier to find for regulators than some generics. As a consequence, branded ingredients should always be a step ahead in quality standards, Green added.

For Nutratech, the bar is set even higher. “Not only is Advantra Z a branded ingredient, but it is intended for three of the most highly scrutinized categories in the natural products industry: diet, fitness and energy,” Green explained. “Within the diet category, many suppliers overpromise with claims that aren’t supported by scientific studies. Sports nutrition has experienced trials with adulterated ingredients. And energy supplements have come under the gun for containing too much caffeine or other stimulants.

“Because it is a branded ingredient in such high-profile categories, Advantra Z must not only meet, but also exceed regulatory requirements,” he added. “Indeed, we’ve anticipated cGMPs. Advantra Z requires stringent harvesting and manufacturing methods to ensure the highest quality.” 

Dondain added that with branded ingredients, suppliers engage their credibility; they must be cautious on what is said about their ingredient in terms of activity. “However, thanks to scientific studies conducted on their own ingredient, suppliers can highlight precise results without any regulatory related risk related.”

Branded Ingredient Future 

In September, Zhang gave a presentation on economic adulteration of certain dietary ingredients and supplements at the Food and Drug Law Institute (FDLI)- hosted conference on Safeguarding the Functional Food and Dietary Ingredient Supply Chain, held in Washington, D.C. 

Zhang’s presentation, titled “Prosperity and Challenges of the Industry,” discussed how the length and complexity of the supply chain along with price pressures has led to serious adulteration of the chondroitin supply.

When asked his opinion on the future of proprietary ingredients, it is these challenges that ensure Synutra Ingredients’ bright future. “With commodity models, you see a lot of spot market transactions, meaning many suppliers behave like street vendors, assembling a pile of aggregate materials in front of the stall and haggle for the highest price offers from passing customers,” he said. “With our branded and proprietary materials, we have been able to switch our interactions with customers to a long-term and stable business model.

“This is a new aspect of the trend in branding. We believe this will help both the buyers and sellers,” Zhang added. “This is definitely good news to the industry. Quality guarantees thrive only on longer-term supply arrangements with verifiably trusted relationships between customers and suppliers.” 

Green added that because of cGMPs, he predicts finished product manufacturers will select branded ingredients. “Branded ingredients offer the manufacturer a level of security and confidence that isn’t found with generics. Manufacturers reduce the potential for regulatory and other issues because branded ingredients are backed by better quality control and research. One reason Advantra Z has seen growth is due to the challenges facing many ingredients.

“As we know,” Green concluded, “there have been prior regulatory problems and questionable safety (DMAA); lack of adequate clinical studies and questionable efficacy (hoodia, African mango, raspberry ketones, yohimbine); and high cost and short supply (Coleus forskohlii). Some manufacturers prefer to get out in front of these potential regulatory, scientific substantiation and supply issues. Many are reformulating with proven, branded thermogenic ingredients like Advantra Z.” 

Extra! Extra!

Visit www.niemagazine.com to read about a proprietary flax protein powder ingredient just launched by Glanbia Nutritionals.

FOR MORE INFORMATION:

■ Nexira, (+33) 2 32 83 18 18

■ Nutratech, Inc., (973) 882-7773

■ Synutra Ingredients, (301) 840-3888