June 2022 Industry Highlights

Hello and welcome to the Vitafoods Insights June Industry Highlights. I'm Natalia Franca Rocha, senior content producer at Vitafoods. Today we're showcasing some key highlights across Vitafoods and the nutraceutical industry, offering a little context on how it might accelerate your product ideation and go-to-market strategy. We will kick things off by looking at our thematic topic for June, contract manufacturing and go-to-market strategy. We will then dive into sustainability, highlighting the world environment day that occurred earlier this month, on June 5th. Finally, we will look at what's coming up on the agenda for Vitafoods 2022. Let's start with the topic of contract manufacturing, our Vitafoods Insights June Thematic month. Vitafoods Insights spoke with Cory Carter, CEO of the Carter Regulatory group, about selecting the right manufacturing partner and how brands must spend the time choosing the right partner to help with their go-to-market plans. Cory pointed out one mistake brands make is not getting involved enough with their manufacturers:

One of the most common mistakes that I see in the industry is that people don't want to be involved with their contract manufacturer. They come up with a product idea, or they go to a contract manufacturer to help them come up with a product idea. And once that idea is set, they just let the contract manufacturer run. Well, in the United States, the regulations are set up so that the company who's using a contract manufacturer has to be involved in the process. They have to know how is their product made. They have to be able to prove and verify their product meets the label claims and specifications. And from a risk perspective, it's just extremely helpful to be able to understand what your manufacturer is doing with your product. Because when it comes down to it, a recall is based on a brand, not a company. So it will really hurt your brand. And it will give you a bigger black eye if you get a recall or have a problem than it will your contract manufacturer.

To hear more from Cory about the common mistakes brands make when selecting a contract manufacturing partner, why it is critical to have a contract and quality agreement in place with your partner, the role of on-site audits, and options for working with companies in different geos, as well as the ways to assess the capabilities and fit of other manufacturers, please check our podcast episode 'Selecting the right manufacturing partner' – the link is available in the show notes. Still, on the same topic, as part of our Vitafoods Insights thematic panel discussion led by Heather Granato, we heard from Luca Bucchini, Managing Director at Hylobates Consulting; Dr Volker Schehlmann, General Manager at analyse & realise; and Kurt Schneider, Founder of Food + Nutrition Contract Manufacturing Consulting.

Contract manufacturers have really changed possibilities for brands. If you think back three decades ago, maybe, you had a good bright idea for new food supplement yourself and friend, you had to think about the equipment, the location, to build an entire manufacturing site. And suddenly your focus would be away from the quality for the food supplement, the new idea, the health needs, but to production. So it has completely changed. Now you have a bright idea for a new route supplement brand, new ingredients, new health needs to address and you can do that through contract manufacturers, and focus on your products on your market. So vital has been extremely beneficial. On the other hand, well, you have to realise that first contract manufacturers have had to defend position in a way that brands could not switch easily. So that has created an incentive for lack of transparency. And sometimes the brands do not have the knowledge or ask the right questions. So, there is habit of providing less details that may be desirable. While as brand owners remain responsible for the product in many ways, certainly towards consumers. And in our experience, this has created big challenges. For example, if there are issues with the products, big compliance issues, safety issues, and certainly issues when you move through jurisdictions. Sometimes you have been able or you trust you brought your manufacturers to determine compliance, in let's say the US or vice versa, and suddenly you find out that you don't have access or the right to access the information that really you need to do in compliance and expand the geographical scope of your products.

An additional aspect would be to talk about transparency from a consumers' perspective, because many aspects of sustainability and transparency are more and more in the minds of consumers. So also purchasing decisions on therefore driven by consumers trust in the ethical standards, which are behind the products they buy. And therefore, strong consumer brands will continue to invest into more strategic relationships with their CMOS or CDMOS. Obviously, if you're established in the industry, you have a network of CDMOS, who do part of the production for you, then you tend to rely on the existing relationship. And if there's anything to improve, you will improve them. But sometimes, in certain circumstances, it's required that a new CDMO or CMO is needed for whatever reason. And when you enter into a new relationship, it's very important that you have upfront a really appropriate due diligence and good qualification process. I like the term 'perfect front end loading', meaning do it right from the beginning, because that's fundamental for the success once you enter into the relationship. So not only focus on the classical criteria, which were just mentioned already, like technical quality, and of course, also cost, but also verify that the appropriate levels and standards on ethics are in place and meet your requirements. I think that is very important up front as well.

First off is, when we think about transparency, typically we're thinking about the transparency with the consumer in terms of labelling, in terms of what's all in the product, making sure that the claims are substantiated. And there's truth in advertising, if you will. Where I focus is the transparency between the brand owner and the contract manufacturer. And in my experience, the brand owner and the contract manufacturer speak two different languages. The brand owner is thinking about the claims on the product, the benefits, what uses the consumer can have for it. The contract manufacturer is concerned about volumes, is concerned about turnaround times, the manufacturing side of it. So how can we mesh those two together so the brand owner does a better job of communicating in the language of the contract manufacturer? and the contract manufacturer can talk more than language of the brand owner so that communication can be more transparent, and more open?

To hear more from Luca, Volker, and Kurt about insights on the key considerations that brands must address when selecting a partner; the need for ongoing quality assessments, including the use of audits; common mistakes that brands make in their partnerships with manufacturing partners; and the impact of COVID, supply chain challenges and the increased demand for transparency, make sure to check this panel discussion on the hyperlink available in the show notes.

Next ... Let's dive into sustainability. Earlier this month, we celebrated the world environmental day – a day where the United Nations encourages awareness and incentivises action points toward ecological protection. The theme for this year's world environmental day was 'Only One Earth', bringing attention toward living sustainably in harmony with nature. With that in mind, for this month's sustainability series podcast episode, Heather Granato from Vitafoods spoke with Sofia Elizondo, Co-founder and COO at Brightseed, about the power of the plant kingdom and the intersection of sustainability, technology and nutritional bioactives from upcycling current ingredients to bring benefits to human health.

The AI platform we call Forager, are the heart of Brightseed, but let me take a step back to put that into context. At Brightseed, we seek to illuminate nature, so that we can restore human health. We think nature is brimming with solutions. And those solutions we call the natural bioactives. These are natural compounds that interact with human biology. And they are basically gold that is often hidden in supply chains. We've helped partners like Ocean Spray, find out what else cranberries can do for health. And we also have our own bioactive pipeline, where we're finding many 10s, and even hundreds of plant sources, each with bioactive that can be multifaceted in their health applications. And so it is the reason we founded Brightseed, it is because we believe that nature is brimming with solutions. And we've only really just begun to tap into them. And how we tap into them is with forger, our AI enabled platform. We know that the natural bioactives are critical for health, the longitudinal studies on health, the global burden of disease, the largest and most comprehensive study on the impact of diet and longevity, basically says that if you don't have plants in your diet, you're bound for a premature death. And it is one of the easiest things that we can do to change that. So we know that there's something in the plants that is powerful for longevity. And the pharmaceutical industry knows that it is these small natural compounds that are very powerful. Two thirds of small molecule drugs are derived from them. Aspirin, Metformin for diabetes, taxall for breast cancer - there's a lot of value in these small molecules, but the world doesn't know about them. And it's called the Dark Matter of the plant kingdom. And that's why we built foragers so that we can see them and then so that we can predict what they can do for health. So we speed up the search for solutions and into months instead of years. And we actually can de-risk the costly clinical validation that can you know, come with bringing science back to health claims to market. Many, many, many plants that have a history of human use that are already in our supply chains are brimming with powerful solutions for health, but we just don't know about them. So we start there, what is it that is already in our fridges, in our distribution trucks? and that we don't know has powerful bioactives? and we're really excited about valorising the plants that we already know. Indeed, that can lead to the valuing diverse crop production, and has a real impact for biodiversity as well.

Sustainability remains a hot topic across industries, with key players and stakeholders understanding it is a necessity being demanded by consumers and a long-term commercial strategy that can lead to increased profit generations. As you can see, there were a lot of key events concerning the nutraceutical industry this June. Looking ahead, our Vitafoods Asia 2022 event is in its 10th year; we are excited to announce that we are co-locating our event with the Food Ingredients Asia in Bangkok, Thailand. From 5-7 October, we expect to have more than 600 total exhibitors and 21,000 participants from across all sectors of the food, beverage, nutraceutical and supplement industries. We will have market entry overviews and sessions on our main stage about regulatory compliance. We also have a digital component of sessions allowing experts to make presentations without the need to travel. We also have our Vitafoods Insights Virtual Expo Europe online event taking place from the 14th to the 17th November 2022, where we will cover key themes across the nutraceutical industry with a focus on Europe. With networking, knowledge-sharing and community-building at its core, it's a place to discover new ideas and connections that can take your business to the next level. Suppose you're an expert within the nutraceutical industry and would like to share your insights with our audience at either Vitafoods Asia or the Vitafoods Insights Virtual Expo Europe events. In that case, we're currently accepting speakers' proposals via our speakers' portal hyperlink available in the show notes. That's it for now; thanks again for joining me, and don't forget to check the show notes that will allow you to link to the information discussed in today's podcast. The Vitafoods Insights Industry Highlights podcast happens monthly, so stay tuned, subscribe and even suggest it to a friend.