• Brian Appell, Activation Marketing Manager, OmniActive Health Technologies, Morristown, NJ, www.omniactives.com
• Tim Hammond, Vice President of Sales and Marketing, Bergstrom Nutrition Vancouver, WA, www.bergstromnutrition.com
• Dan Lifton, President Proprietary Branded Ingredients Group, Maypro, Purchase, NY, www.maypro.com
• Elyse Lovett, Marketing Manager, Kyowa Hakko USA, New York, NY, www.kyowa-usa.com
• Shaheen Majeed, President-Worldwide, Sabinsa, East Windsor, NJ, www.sabinsa.com
• John Quilter, Vice President and General Manager, Wellmune and Ganeden, Kerry Functional Ingredients & Actives, Mayfield Heights, OH, www.kerry.com
• Golan Raz, Head of Global Health Division, LycoRed, Orange, NJ, www.lycored.com
• Doug Reyes, EpiCor Immune (Embria Health Sciences), Ankeny, IN, www.embriahealth.com
Manufacturers of proprietary branded ingredients (PBIs) are experiencing a surge of interest in, and demand for, their science-backed and innovation-fueled branded ingredients. This panel of experts deep-dives into how and why PBIs provide critical value for manufacturers and marketers so they can effectively leverage the published science, technology and claim portfolios behind each of these unique ingredients.
NIE: PBIs. Commodity ingredients. It used to be a race to the bottom: price per gram, price per kilo. Pharma wasn’t interested because ingredients couldn’t be patented. What happened next?
Lifton: For some manufacturers and marketers, it still is a race to the bottom—price per capsule for finished or semi-finished, net profit per gram or kilo for raw materials sold. While cost of goods manufactured does need to factor into the equation, it shouldn’t be the only factor.
Consumers, retailers—and let’s face it, competition—have driven an overarching focus on value as the primary driver. If you’re providing value, the profit will follow. What are the unique functions and benefits of your PBIs that will provide solutions for, and meet unmet needs of, consumers? What USP (United States Pharmacopeia) or key differentiators will that allow the manufacturers to leverage in that value proposition?
And with the dramatic improvements in extraction, fermentation, processing, and encapsulation technologies, PBI manufacturers are able to trademark or patent unique processes, and that has not only allowed greater investment in these proprietary technologies, but has largely rendered “borrowed science” as irrelevant, since clinical studies are carried out on PBIs that cannot be applied to other, similar but impossible to be the same, ingredients and compositions.
Raz: When planning a new product launch, a product development team should choose the path the new product is going to take. Is it going to be an innovative and proprietary product? Or is the goal a cost-effective product that is based on commodity ingredients? The difference between these two paths is far from being just the patents. It is an entire approach to product development, claims substantiation and consumer trust.
Historically, any team could create any formula simply by combining ingredients together and make claims that are based on data collected on each ingredient separately. [Today] the demand for true substantiation is growing rapidly. We see a growing list of brands that are insisting to launch products based on true innovation, proprietary science and finished product-specific data. When this is the case, pharma is also starting to look at such products, realizing the potential to generate new IP and secure market exclusivity.
Quilter: The nutrition category has benefited from a more health-focused, educated consumer. What’s more is that an increasing number of people have come to realize that a healthy diet, supplemented with functional foods, beverages and supplements fortified with efficacious functional ingredients, can help them live a healthier and happy life.
According to Euromonitor data, the global functional food and beverage category is estimated to be worth $256 billion a year, and the global supplements category another $96 billion. Unsurprisingly, with sales figures like these, more and more businesses have seen an opportunity to meet consumer demand. As a result, competition in nutrition is fierce.
In light of this, using branded ingredients has become a highly effective strategy for achieving differentiation in such a crowded market.
Reyes: The lifeblood of any consumer-packaged goods (CPGs) offering is differentiation, and proprietary branded ingredients offer dietary supplement brands with one important way to differentiate. A proprietary branded ingredient also offers the ingredient maker itself the opportunity to earn a return on their investment in their ingredient—in terms of brand awareness with consumers as well as scientific research. This is a classic win/win/win for suppliers, CPG brands and consumers.
Appell: Making sure your ingredient or ingredient combinations are protected in some way—trade secret, patented combination, patented method of manufacture, novel research angles—is key to securing business in today’s nutritional products industry. This is why OmniActive offers several layers of protections for their ingredients to ensure they don’t fall prey to commoditization. To bolster our patent positions, we’ve also conducted several key studies backing these ingredients for specific indications.
NIE: While you could make the argument that PBIs only add cents per capsule, not every ingredient in a finished product can be a PBI. What criteria should finished product manufacturers use when deciding which PBI to use or use as flagship ingredient?
Quilter: Just giving an ingredient a fancy name is nowhere near sufficient. Consumers attracted to a branded ingredient tend to more informed and curious about the story behind the brand—specifically, what it offers and the key criteria are safety and efficacy.
In the immune and digestive health categories, branded ingredients give consumers a clear point of reference when they’re browsing shelves crammed with products claiming to offer these benefits.
They also help consumers understand exactly what a product has been fortified with and allows manufacturers to showcase specific research and information that supports the branded ingredient. This builds confidence in a product and then, once a consumer’s trust is gained, it helps to keep them loyal to a product they know works for them.
Majeed: Often the decision to add a PBI depends on the formulation. Definitely it’s best to have a science backed PBI to support the health claims on a product. The choice of PBI depends on the health claims and within a class of functionally closely related PBI, often the cost per dose becomes an important factor in choosing ingredients.
For a single ingredient product, the presence of a PBI supported by good science can be the important factor for its success. It can be augmented by other supporting PBI ingredients if the science on their synergistic benefits exists or has been proven clinically.
Replacing the PBI with commodity items may not be a good idea when dealing with multi-ingredient products with clinical evidence, as there can be several marked differences between the standardization and levels of active in a commodity item when compared to the PBI.
Lovett: I think if a manufacturer is formulating for a condition-specific product and making condition-specific claims, a PBI should be used as a flagship ingredient. I also think the manufacturer needs to look at what the ingredient supplier is doing to educate the consumer on the PBI, as well as the consumer awareness of that ingredient.
Lifton: Does it provide real value? If it is only going to be included in trace or “fairy dust” dosages so that the registered trademark can be listed or the bug put on the bottle, then are you really providing honest value to end users, regardless of whether your supplier or licensing ingredient even allows that?
Will it play well with the other ingredients in the formula so that there could be additional or synergistic functionalities? Will it be a signature ingredient in a whole suite of enhanced products or a flagship ingredient in a one-off, specialty formulation? What’s the intended use and structure-benefits for inclusion of this ingredient or compound? Does published science support that?
Where is the product going to be marketed—whether the U.S., E.U., Canada, South America, Asia, elsewhere, or all of the above, are NDI (new dietary ingredient) non-objections needed, EFSA (European Food Safety Authority) approval needed, TGA (Therapeutic Goods Administration) or Health Canada pre-market approvals needed?
There is no “right” answer to many of these questions, but manufacturers should have answers to questions which will help them make that well-thought-out decision in every single case.
Reyes: The short answer regarding criteria is brand equity and scientific substantiation for compelling structure function claims. A fancy logo for an ingredient does not equal brand equity. Brand equity results from multi-faceted investments in connecting the brand with consumers, influencers and the trade.
In terms of science, PBIs that have high quality, published human clinical trials allow supplement CPG companies to make strong, differentiated claims that will resonate with consumers. To be confident in their health claims, product manufactures should look for PBIs backed by well-designed, double-blinded, placebo-controlled trials that were published in peer-reviewed journals. Furthermore, these studies should use subjects that are normal, healthy people in order to reach the widest possible audience.
The immune studies using our ingredient EpiCor were done on subjects that were non-stressed, healthy and not immune-compromised. EpiCor’s human clinical gut trial conducted on people who reported mild constipation symptoms, but who were not otherwise taking medication or seeing a doctor. All major trials on EpiCor were randomized placebo-controlled studies.
NIE: There is a place for commodity ingredients, correct?
Majeed: Yes, there is definitely a place for commodity ingredients, but it’s important to exercise due diligence in choosing them. While selecting commodity ingredients, one has to be careful from several points: infringing intellectual property of any existing PBIs, levels of actives, methods of preparation, safety (basic science generated on toxicology, for example), chain of custody and suitability to address their intended function.
Quilter: Commodity ingredients will always have a role to play in the nutrition category. But the imperative to differentiate in this ultra-competitive space means that the use of branded ingredients is a commercially sound move for any manufacturer looking to build a sustainable and loyal customer base. In fact, both ingredient suppliers and CPG manufacturers are realizing that it takes more than just adding a generic ingredient to win the loyalty and trust of label-savvy shoppers.
Food, beverage and supplement products that will find the most success in the functional space are those fortified with high-quality, well-studied, branded ingredients that consumers can trust. Because of this, the popularity of branded functional ingredients will continue to grow in 2018 and beyond, as will the demand for digestive and immune health ingredients that are safe, effective and can be formulated into convenient, everyday products.
Successful functional ingredients give product manufacturers the competitive advantage they need through solid science and consumer-focused positioning while offering safe, effective benefits that can be easily communicated—all of which keeps consumers coming back to the products they trust and value.
Raz: Absolutely! Different products are aiming at different health objectives. If a consumer has a decline in their B12 levels, what they may need is to consume a good quality sublingual B12 tablet. When this is the case, commodity ingredients may be a good answer.
We can say with confidence that when it comes to basic vitamins and minerals, there are many quality finished products that are being produced with 100 percent commodities.
NIE: In line with this, has the quality and confidence of commodity ingredients from China and India improved over the last five to 10 years? If so, how? If, not why?
Lifton: As to India, the Food Safety and Standards Authority of India (FSSAI) has made great strides in helping all boats—or at least, many boats—to rise in India from a raw materials standpoint. From the trade side, the Bio-Dynamic Association of India (BDAI), IFOAM and the Organic Farming Association of India (OFAI) have helped to drive some valuable voluntary quality-control and food safety programs there.
China, however, is a slightly different story. In terms of Chinese suppliers of raw materials for in-country use and export, there is a need for more regulatory reform—and a more open and transparent regulatory and quality assurance environment. The Health Products Association – China (HPA – China) has been working hard to work with regulators and industry there to encourage improvements in those areas.
Reyes: Embria sources all of the materials used to manufacture EpiCor in the U.S. That said, it is true that new laws and regulations have helped improve the safety of ingredients that are imported into the U.S. With compliance beginning May 13, 2017, the Food Safety Modernization Act (FSMA) required that importers perform certain risk-based activities to verify that food imported into the U.S. has been produced in a manner that meets applicable U.S. safety standards.
Majeed: Commodity items today are facing competition from PBIs as growing numbers of marketing companies are finding consumers far more interested in the ingredients in their products and expecting information to be available on their origin, science, company quality practices, etc.
This has made the commodity players look at their supply chain, what value they add to the product and not just dollar-to-dollar saving in terms of cost.
[In] the areas of supply chain transparency, clean labels, actual declaration of ingredients and clarity, are the methods of quality evaluation that have all improved a lot.
NIE: Talk about transparency initiatives and programs that you are part of, and why.
Majeed: Sabinsa practices transparency in a variety of ways. For one thing, our door is always open to customers to come tour our manufacturing facilities and the small farms where many of the herbs are grown in our fair trade cultivation program. Last year we brought a number of industry trade publication editors over to India and showed them everything. We also have an extensive video library, giving a virtual tour from farm to facility.
Appell: Our Lutemax range of ingredients are produced from a fully integrated supply chain which starts at the farm level with GMO (genetically modified organism)-free seeds, growing, and harvesting of premium marigold flowers, followed by our energy efficient dehydration plant, on to our state-of-the-art extraction and puriﬁcation facilities and ending with multiple delivery platforms including powder, oils suspensions and beadlets. This means our customers can be assured that we have oversight at each step in the production process.
Most recently we achieved Non-GMO Project Verified status for Lutemax 2020 and Lutemax Free Lutein (Sunflower 20 percent Oil Suspension). The Non-GMO Project Product verification program is North America’s only third-party verification for non-GMO foods and products. To ensure the materials and facilities used to produce the Lutemax range were non-GMO compliant, verification was completed and confirmed through a rigorous process by our technical administrator NSF International.
Lovett: Kyowa is committed to sharing research on both of our branded ingredients as well as our Kyowa Quality Amino Acids. Information is shared through consumer awareness outreach, social media outlets, advertising as well as our websites.
Quilter: Wellmune is manufactured in facilities that are cGMP (current good manufacturing practice) compliant with U.S. Food and Drug Administration (FDA) regulations. In addition, our facilities are certified kosher, halal and certified against one or more Global Food Safety Initiative (GFSI) programs in addition to independent, third-party audits.
Lifton: We are proud members of the AHCC Research Association, NPA (National Products Association) and DCAT (Drug, Chemical and Associated Technologies Association). Wherever possible, we ensure that our PBIs meet many of the following certifications: dairy free, gluten free, kosher, halal and non-GMO.
NIE: What is your top PBI? When was it introduced? How was it and is it differentiated from other PBIs in the segment or other ingredients in the category?
Lovett: Cognizin Citicoline is one of our top PBIs. Cognizin is the branded form of citicoline and is backed by multiple human clinical studies. Cognizin is made by a patented fermentation process yielding high purity and high quality. Cognizin is marketed in the brain health category and is getting a lot of pick up in the sports nutrition category to really differentiate products that are currently on the market for its focus, attention and mental energy benefits. Cognizin has been studied in multiple demographics including middle aged women as well as adolescent males.
Raz: The first proprietary ingredient introduced by Lycored was Lycomato and that was almost two decades ago. Together with a short list of legendary ingredients that were developed and manufactured by quality ingredients brands, Lycomato sets a standard in both quality, research and intellectual property. The level of scientific data that was generated in the past and is still being generated today, sets Lycomato as an example of a true proprietary ingredient.
Lifton: Some of our strongest-performing PBIs include: AHCC, which we introduced in 2007; BioPQQ, which we introduced in 2009; MicroActive CoQ10, which we introduced in 2010; Oligonol, which we introduced in 2011; and MicroActive Curcumin, which we introduced in 2012.
As one example, in the broader category of mushroom extracts, AHCC is in a league of its own. A unique, cultured mushroom mycelia extract manufactured through a patented, extended liquid culturing process, AHCC’s acylated alpha glucans boast a molecular weight of only 5,000 daltons. Compared to most extracts that are at more than 200,000 daltons, AHCC has superior absorption andis backed by over 30 human clinical studies.
Another example is PQQ (or pyrroloquinoline quinone), which is the first new vitamin discovered since 1948. BioPQQ is the form that has been used in all of the human clinical studies, and BioPQQ is the only natural, FDA NDI-accepted PQQ on the market.
Regular curcumin is very popular, but it is very difficult for the body to absorb; what little is absorbed is quickly excreted. However, MicroActive Curcumin uses a micronized, sustained-release technology that allows for better, more uniform absorption and retention. Two studies show that 12-hour, multi-staged-release MicroActive Curcumin is absorbed 10 times better than regular curcumin and reaches desired blood levels 50 percent faster than standard curcumin.
Oligonol is a great example, too. While there are some fruit extracts and green tea ingredients out there, Oligonol is a patented, low-molecular-weight polyphenolic extract derived from both lychee fruit (85 percent) and green tea (15 percent) that offers excellent absorption. And to support the many structure-function claims associated with it, there are 30 human clinical trials.
Hammond: Bergstrom Nutrition produces the only U.S.-made and the world’s only GRAS (generally recognized as safe)-designated proprietary form of MSM (methylsulfonylmethane) in its GMP-compliant, ISO 9001:20015 registered and FSSC22000 certified, MSM-dedicated production facility, exceeding industry standards for optimal purity and product consistency.
Bergstrom Nutrition’s focus on purity sets OptiMSM apart. Bergstrom Nutrition pioneered the distillation process of MSM to ensure the highest levels of purity and safety. Today, the multi-stage distillation used for purification is recognized as the superior method on the market.
OptiMSM is a premium form of trademarked MSM that is supported by U.S. clinical published research. OptiMSM was introduced in 1989 and has been a leading ingredient for joint health products and the choice of quality brand manufacturers.
Our Vancouver, WA-based company pioneered the use of MSM for human consumption in 1989.
Reyes: Our flagship ingredient, EpiCor fermentate, has been in the market since 2006. As a novel ingredient, EpiCor has a new dietary ingredient notification filed with the FDA.
Not only is EpiCor unique in its composition, it also has a very interesting discovery story.
Embria’s parent company, Diamond V, discovered that at the plant that manufactured its fermented animal feed additive, the workers were unusually healthy. The workers used fewer sick days compared to the office workers and their health care premiums appeared substantially less than other companies the same size.
Diamond V conducted a pilot study and results showed that the factory workers exposed to the fermented animal feed had stronger immune systems compared to the office workers. After years of research, Diamond V created EpiCor fermentate specifically for the human immune system.
Multiple published human, in-vitro and in-vivo studies show that EpiCor strengthens the immune system and supports gut health. Nearly all of our human clinical studies use the gold standard of science and are all done using healthy subjects.
We believe EpiCor truly stands apart from other PBIs when it comes to the standard of its science, its production through fermentation, its complex composition and its unique story.
Quilter: We have two key branded, science-backed nutrition ingredients in our immune and digestive health portfolio.
GanedenBC30 is a shelf-stable, science-backed probiotic strain that has been shown to provide digestive health, immune health and protein utilization benefits. Unlike most other probiotic strains, GanedenBC30 is a spore-former, which makes it highly stable and allows it to remain viable throughout most manufacturing processes and the low pH of stomach acid—all with up to three years of shelf life.
Wellmune is a natural food, beverage, and supplement ingredient clinically proven to help strengthen the immune system. Backed by over a dozen clinical studies, Wellmune can provide the product differentiation needed to capture the growing consumer demand for products that deliver real immune health benefits to people in all stages of life.
A patented, proprietary beta 1,3/1,6 glucan that is extracted from the cell wall of a proprietary strain of baker’s yeast, Wellmune is highly purified, and naturally gluten free. Wellmune is designed for most food, beverage and supplement applications and is stable in the vast majority of manufacturing processes.
Majeed: Curcumin C3 Complex is one of the top PBIs for Sabinsa. It is one of the only branded curcumin or turmeric extracts, which can claim over 100 published studies as a PBI. While there are multiple curcumin ingredients flooding the market, C3 Complex has been able to achieve such success because of its being a PBI. We not only have clinical studies for this brand, but the IP, brand management and promotion has been key to the success of this branded ingredient compared to other ingredients on the market. Its sustained success can be attributed to Sabinsa’s unceasing efforts to continue research, and to ensure a strong supply chain process.
Appell: Lutemax 2020 is a single, convenient ingredient providing all three macular carotenoids—lutein, RR-zeaxanthin and RS (meso)-zeaxanthin—in a 5:1 lutein:zeaxanthin isomers ratio as found in nature. Some other points of differentiation include:
• Proven bioavailability
• FDA-GRAS notified
• Sourced and manufactured through a full vertically integrated supply chain
• Clinically demonstrated rapid retinal response—significant increase vs placebo in macular pigment optical density
• Science specific to individuals exposed to long-duration high energy blue light sources—the sun, digital devices, screens and energy efficient lighting (LED/CFL)
• Scientifically shown to support benefits beyond vision health and performance including brain health and beautiful skin. NIE