What in the World???
It has been a very busy past 2 months with trade events in Philadelphia, Geneva, and Los Angeles. While the impacts of Covid are still rebounding across the globe (more on that later), there is a good bit of “return to normal” and live trade events and face-to-face meetings are welcomed back (at least for now). The biggest difference in the trade events were, less then robust attendance, especially at Expo East in Philadelphia with many last-minute abandons. A truly European Vitafoods in Geneva with few Americans and virtually no Chinese, Korean, Japanese, & Indian companies or visitors. Supply Side West in Las Vegas was a uniquely American event with few European, and almost no Asian presence. Normally 3 trade shows, in so close a time proximity would have been a waste of resources (trade show tourism) but in this case, it gave three very specific perspectives, and a spotlight to regional and industry layer specific trends and developments.
What’s Happening Out There…
Philadelphia’s resounding messages were – Cannabis is NOT dead and gummies are very much alive (especially immune health formulae). There was a robust presence of Probiotics, Mushrooms, Beauty-from-within and lots of collagen.
Geneva has both consumer products and ingredients. On the Consumer side gummies were everywhere, immune health, Probiotics, & Collagen. In the ingredient booths new developments with innovative botanical ingredients, lots of new algae-based materials, an unprecedented number of K2 vendors & Plant Based Proteins.
Las Vegas was dominated by Mushrooms, gummies, upcycled ingredients, plant-based proteins, and some cutting-edge ingredients for sports nutrition that may remake that segment in the coming few years. Also strong were omega’s (especially plant based), functional probiotics & Beauty from within.
At all the shows I noticed an emerging undercurrent of fermentation – this is not surprising as we have had lot of Kombucha, probiotics, plant based proteins, yeasts, and other products of fermentation. If I had to pick one truly innovative category, I would say the fermented fruit extracts may emerge as a powerful set of ingredients. It is early days for this space but these ingredients and companies sit at the intersect of plant based, superfood, enhanced absorption, wholeness, probiotics, allergen free, and many other trends.
I will dig in and try to provide some insights…
First the trend that is impacting all aspects of the industry – Supply Chain Disruption. This is not news-worthy but some of the implications are worth paying attention to. Chief among these is adulteration. From outright counterfeit ingredients that are intentionally mislabeled, to sub-standard ingredients and components entering the supply chain, it is great time to review specifications and testing-acceptance standards. Adulteration of elderberry, pine bark extracts, ginkgo leaf extract join other long term problem materials such as Saw Palmetto, Ginseng, and Turmeric root extracts. What is new is reports of substandard packaging components ranging from bottles with small plastic particles inside, rough edges and seams from poor quality molding, to warped and mis-shaped lids and jars that foul packaging lines. The take-away is to ensure that every component that is included in or touches the product has an adequate specification and that these specifications are enforced through inspection. The corollary to tight supply is problematic logistics and long transit time. This too can impact product quality for both ingredients and finished product. Again – setting standards for storage and shipping is helpful to mitigate potential damage.
The second overarching cluster of trends is Sustainability & JEDI (Justice, Equity, Diversity, Inclusion). Sustainability in sourcing, packaging, operations, and choices of what business is pursued is becoming increasingly important to consumers, investors, and employees. The Climate Summit certainly has impacted thinking but this has been working for some time. JEDI is the outgrowth of the past year of social unrest that has gripped both the USA and parts of Europe. The key learnings that I am seeing that can be applied to both trend clusters are not to let perfect be the enemy of good. As long as a company is trying to improve along these metrics they will not likely be punished by their various stake holders. Apathy however is clearly hurting some brands.
Emerging ingredient and finished product concept that appears to be gaining momentum is fermented plant-based ingredients. The most significant are fermented berry and fruit products. Companies such as Clever Foods, Fermedics, and Phytimpact look to be leading this category – each with a proprietary platform and emerging research. Fermented Wild Blueberry is an ingredient to keep an eye on Other manifestations include fermented seed, bean, and grains for plant-based protein products. Less obvious but equally important are fermented fiber products with pre-biotic and immune activating attributes.
At Vitafoods I noticed a significant number of companies introducing ingredient concepts for Anti-Ageing and Metabolic wellbeing. The nexus of these topics is Mitochondrial health, and this will likely impact thinking and product development. In some ways this new trend was predictable as Covid in many ways is a metabolic disease or at least is most problematic for those that are metabolically compromised. Specific exciting ingredients include Hobamine (from barley), Spermidinelife, Palmitoylethanolamide (PEA), N-Oleoylethanolamide (OEA), NMN. NAD+, NADH, and ergothioneine - some of which have already achieved Novel foods status.
Algae based materials are also increasing in variety with more vendors making these whole plant-based superfoods available for innovative product formulations. New varieties of Chlorella including White, Golden (yellow), and low flavor green varieties Allmicroalgae. Increasing number of Omega-3 from Algae including the prospects of high potency & purity EPA from KD Pharma in the coming year and advanced structured algal lipids from Brudy BioTech . The number and range of Astaxanthin producers continues to grow with new biomasses and production technologies being launched.
Many new ingredients are appearing for the beauty from within category, (too many to list here), many with Novel foods status and human clinical substantiation. I expect this category to continue to grow. Skin microbiome seems to be garnering a lot of attention.
Mushrooms seem to be sprouting everywhere – or more correctly spreading their mycelial networks into the ingredient and finished product spaces. The existing leaders are developing more species, some are doing the hard work of research, many new followers are entering the category, a few some with interesting growth, extraction, and finished dosage forms. Almost all of the new players and many of the legacy companies are looking at the emerging possibility of Psylocibin (Rx) with ambitious plans. I would be cautious with investment in this category but open minded (no pun intended) as there will be some significant opportunities.
Detox, liver, and pollution shields seem to be getting increased attention. Perhaps this is because I am looking for these ingredients, but I am seeing some interesting new developments for lung, liver, & skin purification. This category was overdue for innovation and the need for solutions seems to be growing.
Proteins continue to expand despite, or perhaps because of huge price run ups. Whey and pea protein prices have more than doubled, Multiple companies are presenting yeast based proteins (Nextferm, Gnosis Lasaffre , Angel, Red Star and others. New sources of protein from various beans and seeds look promising. I am also seeing some exciting innovation and would expect plant based peptides and more complex protein structures to emerge in the next year. One of particular interest is a whey-like protein created by cold process membrane filtration instead of the acid or enzymatic hydrolysis that is currently used. This innovation could change the dynamic of dairy being the benchmark.
As mentioned previously gummies are everywhere and it looks like we will be seeing much more of them – massive amounts of new capacity and innovation is coming on-line, notably this is one category of contract manufacturing that may see reduction of lead times and price of service as well as reduction of minimum order quantities as the competition among CMOs increases. Although the category will still be growing capacity is growing much faster.
In finished products the number of e-Sports focused companies and sub-brands is impressive. There is also similar energy in Eye health and neurocognitive health. I would expect some retrenching and elimination of immune support commodity products, there are hundreds of Vitamin D, Zinc, Vitamin C, Elderberry and Echinacea products – not all will (or should) survive. While Sleep support and stress support continue to grow, I would anticipate that next year we will see the same kind of rationalization.
Active Nutrition my be revolutionized in the coming two years – Perfect Day/Natreve introduces GM Plant based whey from a crisper modified Trichoderma fungus. Di-Leucine Peptides emerge with powerful data and rich IP , & Pea (and other legume and seed based cold filter processed whey like proteins. Paraxanthine (a caffeine metabolite) as a new stimulant. TWK10 and other ergogenic probiotics. Active Nutrition is getting some serious investment and attention.
Things I had expected to see but did not see include:
No significant oral care brand. There is great research and ingredients but no brands have established themselves as a go-to in this space. I would have also expected to see a functional probiotic brand(s) where all common health conditions are addressed with a probiotic (or symbiotic centric) offering. I also had expected the attrition in CBD and Hemp brands to be much more significant but there are still many dozens of players despite the regulatory uncertainty and consistent drumbeat of media stories about product quality problems and lack of compelling data demonstrating robust benefits. There was decidedly less personalized nutrition offerings than there were media stories of the past year – this may be a function of most of these products being offered in the DTC channel thus not a lot of investment in exhibitions.
In closing the energy at the events was very positive, people were genuinely happy to be back to a live event and while the attendance and exhibitors were reduced – enthusiasm was very strong