Subscribe and receive the latest updates on trends, data, events and more.
Join 57,000+ members of the natural products community.
Expert panel discusses a rapidly changing industry at Natural Products Expo West
3 Min Read
“Maybe the consumer is reading the headlines differently than we are,” said NBJ Editor-in-Chief Rick Polito, speaking to a packed house at Natural Products Expo West 2016 in Anaheim, California. Polito and NBJ/New Hope Network Senior Market Analyst James Johnson were seated on a panel moderated by NBJ co-founder, Nutrition Capital Network principal and Nutrition Business Advisors LLC managing director Tom Aarts. Also sharing the stage were William Hood of global investment bank Houlihan Lokey, and retailer-representatives Emily Kanter (Cambridge Naturals) and Alan Lewis (Natural Grocers by Vitamin Cottage).
Polito’s statement was in reference to the fact that some of the industry’s most notable growth was in segments most vehemently targeted by mainstream media. For instance, against an overall growth in supplements of 6.2 percent, herbs & botanicals—the target of the New York attorney general investigation—grew at 7.7 percent. Sports nutrition—despite being a category Polito characterized as “lurching from one scandal to another”—grew at a startling 11.6 percent.
These numbers and Hood’s recap of recent mergers and acquisitions—what he called “an important component of the industry, an affirmation of the industry”—provided foundation-building look back.
Here are some key forward-looking points from the presentation:
Trends:
Polito: “Millennials are picking up herbs & botanicals as an alternative to pharmaceuticals.”
“Bulk herbs might be the fastest growing segment of our business,” said Kanter, calling her store’s bulk herb department the hottest place to be in Cambridge, Massachusetts, on a Friday night. “Herbs in general are a really unique and interesting category for us, as well as functional foods and medicinal mushrooms.”
Lewis identified growth of organic in supplements as a key growth area in retail.
“People think they can get their nutrition from food,” said Polito as explanation of decline in multivitamin sales, “but when we move over to condition specific, it’s a different story.”
“The idea of getting all your nutrition from the food supply doesn’t hold up when the food supply is so compromised,” said Lewis, discussing the 100+ undisclosed chemicals that accompany glyphosate in Roundup.
Trust:
Johnson: “Use trust and integrity as your barrier,” said Johnson, identifying that established supplement brands grew while private label declined 0.5 percent against the 6.2 percent growth overall.
Kanter: “We’ve focused on those brands that focus on independent and private companies. Once a brand jumps to mass, customers begin to doubt the quality.”
Regulation:
Hood identified a continued de-fragmentization of the industry, pointing out that “both manufacturers and ingredients suppliers are of interest to buyers.” Key areas of due diligence for prospective buyers? “It’s no surprise to any of you: compliance, compliance, compliance.”
“We may need to revisit DSHEA—it’s a 20-year-old piece of legislation,” said Aarts. And later: “What our biggest critics are asking for—assurance, scientific evidence, traceability and transparency—is not really that much to ask for.”
“It’s about transparency and trust and how we get transparency through the value chain,” said Aarts referring to the registry being launched by the Council for Responsible Nutrition (CRN). “This will move the industry forward to another level. If you’re not part of the registry you’re not part of the industry.”
About the Author(s)
You May Also Like
