Welcome to NBJ NBJ’s Nutritional Raw Material & Ingredient Supply Report 2011 An analysis of markets, trends, competition and strategy in the U.S. business of supplying raw material and value-added ingredients to manufacturers in the nutrition industry
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NBJ’s Nutritional Raw Material & Ingredient Supply Report · 2011-12-01 · Welcome to NBJ NBJ’s Nutritional Raw Material & Ingredient Supply Report 2011 An analysis of markets,
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Welcome to NBJ
NBJ’s Nutritional Raw Material & Ingredient Supply Report
2011 An analysis of markets, trends, competition and strategy in the U.S. business of supplying raw material and value-added ingredients to manufacturers in the nutrition industry
NBJ’s Nutritional Raw Material & Ingredient Supply Report 2011
3.5. A BRIEF HISTORY OF RAW MATERIAL & INGREDIENT SUPPLY TO THE NUTRITION INDUSTRY ......................................................... 51 3.6. RAW MATERIAL MANUFACTURER/MARKETER SURVEY ......................................................................................................... 59 3.7. TRENDS ....................................................................................................................................................................... 62
3.7.1. Shift to Natural Colors ‘Inevitable’ as U.S. Companies Follow Europe’s Lead.................................................. 62 3.7.2. Ten Years from Now, What Should the Nutrition Industry Look Like? ............................................................. 65 3.7.3. China is Cheaper, but Should You Do Business There? .................................................................................... 68 3.7.4. 7 Nutrition Market Trends for 2012 ................................................................................................................. 70 3.7.5. SIDI Protocol Streamlines Information Flow between Supplier, Manufacturer ............................................... 71 3.7.6. More Companies Pursuing Self-Affirmed GRAS Status .................................................................................... 72 3.7.7. FTC Raises the Bar for Claims Substantiation .................................................................................................. 75 3.7.8. As Nutrition Industry Matures, Patents More Worth the Time and Effort ...................................................... 78 3.7.9. Case Study: How Can Ingredient Suppliers Land Deals with Nutrition MLMs? ................................................ 81 3.7.10. Case Study: Which Conditions Best Walk the Long Road from Supplements to Food? ................................... 82
4.1. SUPPLY CHAIN .............................................................................................................................................................. 87 4.2. RAW MATERIAL & SUPPLY SALES ..................................................................................................................................... 88
4.3. TRENDS ..................................................................................................................................................................... 106 4.3.1. Is Toxicity the Flipside of Enhanced Bioavailability? ...................................................................................... 106 4.3.1. Ingredient Adulteration Still a Problem Despite GMPs .................................................................................. 109 4.3.1. 4 Key Industry Reactions to New Dietary Ingredients Guidance .................................................................... 113
5.1. SUPPLY CHAIN ............................................................................................................................................................ 117 5.2. RAW MATERIAL & SUPPLY SALES ................................................................................................................................... 118
5.3.1. Vitamin C ....................................................................................................................................................... 130 5.3.2. Vitamin E ....................................................................................................................................................... 131 5.3.3. B Vitamins ...................................................................................................................................................... 133 5.3.4. Vitamin A ....................................................................................................................................................... 137
5.4. TRENDS ..................................................................................................................................................................... 137 5.4.1. Vitamin D Sales Strong in 2010, Supply Costs Rising ..................................................................................... 137 5.4.2. Vitamin D Intake Levels Officially Rise ........................................................................................................... 140 5.4.3. Top Trends Shaping Kids' Supplements from the CEO of Hero Nutritionals .................................................. 142
6.1. SUPPLY CHAIN ............................................................................................................................................................ 145 6.2. RAW MATERIAL & SUPPLY SALES ................................................................................................................................... 146
6.2.1. Suppliers ........................................................................................................................................................ 150 6.2.2. Top Companies .............................................................................................................................................. 164
6.5.1. Closing the Dietary Fiber Gap with Soluble Fiber ........................................................................................... 173 6.5.2. New Supps for Men's Health Taking Off ........................................................................................................ 175 6.5.3. Case Study: Botanical Firm Searches South America for the World’s Next Big Super Fruit ........................... 176 6.5.4. Sluggish Demand for Sustainable Botanicals Predicted to Rise ..................................................................... 178 6.5.5. Case Study: Bionorica ‘Phytoneers’ a Successful Future ................................................................................ 179 6.5.6. Case Study: Herb Traceability Emerges As New Standard ............................................................................. 179
7.1. SUPPLY CHAIN ............................................................................................................................................................ 183 7.2. RAW MATERIAL & SUPPLY SALES ................................................................................................................................... 185
7.2.1. Suppliers ........................................................................................................................................................ 187 7.2.2. Top Companies .............................................................................................................................................. 189
8.2. RAW MATERIAL & SUPPLY SALES ................................................................................................................................... 202 8.2.1. Top Companies .............................................................................................................................................. 205
8.3.1. In Search of Innovation: Helios ...................................................................................................................... 212 8.3.2. Calcium Study Causes Controversy ................................................................................................................ 213
9.1. SUPPLY CHAIN ............................................................................................................................................................ 217 9.2. RAW MATERIAL & SUPPLY SALES ................................................................................................................................... 218
9.5.1. Case Study: Lifemax Brings Chia Seed to the MLM Masses ........................................................................... 226 9.5.2. Case Study: Atkins Nutritionals: Following Obesity Around the World.......................................................... 226 9.5.3. 6 Appetite Suppressant Ingredients for Satiety ............................................................................................. 227
10.1. SUPPLY CHAIN ............................................................................................................................................................ 229 10.2. RAW MATERIAL & SUPPLY SALES ................................................................................................................................... 230
10.6. TRENDS ..................................................................................................................................................................... 278 10.6.1. Can Krill Oil Double Sales Over the Next Five Years? ..................................................................................... 278 10.6.2. Case Study: Less Is More with Krill Oil, Says Aker BioMarine ........................................................................ 281 10.6.3. Probiotics Sales Proliferate at Stunning Rate in 2011 .................................................................................... 282 10.6.1. Probiotics Plus Enzymes: A Complete Digestive Health Solution? ................................................................. 282 10.6.1. Ideal Ingredient Calling Card: Omega-3s ....................................................................................................... 284 10.6.1. Stress Means Big Sales for Supplements Targeting Insomnia and Anxiety ................................................... 285 10.6.2. New GM Ruling Plunges EU Market for Honey Ingredients into Crisis .......................................................... 288 10.6.3. Building Better Joint Health Supplements ..................................................................................................... 289
NBJ’s Nutritional Raw Material & Ingredient Supply Report 2011
11.1. VALUE CHAIN ............................................................................................................................................................. 293 11.2. RAW MATERIAL & SUPPLY SALES ................................................................................................................................... 293
11.5. TRENDS ..................................................................................................................................................................... 304 11.5.1. Two Functional Food Trends Centered in Your Gut: Gluten-Free & High-Fiber ............................................. 304 11.5.2. life’sDHA: Too Much Success Breeds Extra Scrutiny ...................................................................................... 307 11.5.3. Coconuts Take Center Stage as a Functional Fruit ......................................................................................... 310 11.5.4. Ideal Ingredient Calling Card: Erythritol ........................................................................................................ 311 11.5.1. Ideal Ingredient Calling Card: Pomegranates ................................................................................................ 312 11.5.1. Ideal Ingredient Calling Card: Cocoa.............................................................................................................. 314 11.5.1. Future of Nutrition Bars Shaped by Lifestyle Brands and Functional Ingredients .......................................... 315 11.5.1. Trend: Promise of Omega-3s Remains Unfulfilled in Functional Food ........................................................... 318 11.5.2. Trend: Suppliers Set Minimum Requirements to Halt ‘Pixie-Dust’ Dosing ..................................................... 320 11.5.3. Trend: European Union’s Health Claims Legislation Sets Suppliers and Manufacturers on Edge ................. 323 11.5.4. Trend: Should FDA Act More Like EFSA? ........................................................................................................ 327 11.5.1. Functional Ingredient Suppliers Face More Choices in Safety Certification ................................................... 328
12.1. VALUE CHAIN ............................................................................................................................................................. 333 12.2. RAW MATERIAL & SUPPLY SALES ................................................................................................................................... 333
12.2. TRENDS ..................................................................................................................................................................... 345 12.2.1. Fringe Trends in Milk: Raw, Fine-Filtered & a2 .............................................................................................. 345 12.2.2. Organic Dairy: A Market Overview ................................................................................................................ 345 12.2.3. Is the GMO Tipping Point at Hand? ............................................................................................................... 349 12.2.4. Case Study: Natural, Organic, Raw, Vegan, Gluten-Free: Buzzwords that Mean Business ........................... 351
13.1. VALUE CHAIN ............................................................................................................................................................. 355 13.2. RAW MATERIAL & SUPPLY SALES ................................................................................................................................... 355
13.5. TRENDS ..................................................................................................................................................................... 367 13.5.1. Whole Foods Sets Personal Care Market Reeling with New Organic Standards ........................................... 367 13.5.2. Triclosan Ban Could Pave Way for Natural Antibacterials ............................................................................. 370 13.5.3. Anti-Aging Carries Weight in Topicals, Healthy Aging Prevails for Broader Market ..................................... 372 13.5.4. Trend: NutriBeauty Looks for Growth in Burgeoning Middle Classes Across the Globe ................................ 375 13.5.5. 6 Nutricosmetic Ingredients: CoQ10, Kalunite, Bakutrol, Rhassoul Clay Powder, Squalane.......................... 378 13.5.6. U.S. Animal Nutrition Market Overview ........................................................................................................ 379
14.1. FDA “TRYING TO REALLOCATE THE BURDENS OF PROOF” WITH NEW DIETARY INGREDIENTS ..................................................... 385 14.2. EXPECT HIGHER, MORE VOLATILE FOOD PRICES ................................................................................................................ 387 14.3. NATURAL FOOD TRENDS IN EUROPE: Q & A WITH RICHARD HALL ........................................................................................ 391 14.4. VMI NUTRITION: A NEW BREED OF CONTRACT MANUFACTURER ........................................................................................ 393 14.5. HOW XSTO SOLUTIONS CHAMPIONS NOVEL INGREDIENTS .................................................................................................. 395 14.6. HERBALIST & ALCHEMIST'S CEO TALKS SUSTAINABILITY ..................................................................................................... 396
Figure 1-1 U.S. Supplements, Functional, and N&OPC & Household Raw Ingredient Sales, 1996-2011e .............. 21 Figure 3-1 U.S. Nutrition Industry Value Chain in 2010 .......................................................................................... 29 Figure 3-2 U.S. Nutrition Industry Value Chain, 2000-2010 .................................................................................... 29 Figure 3-3 U.S. Nutrition Industry Value Chain by Supply Sector in 2010 ............................................................... 30 Figure 3-4 U.S. Total Nutrition Industry Raw Material Sales by Product in 2010 ................................................... 31 Figure 3-5 U.S. Nutrition Industry Consumer & Raw Material Sales & Growth in 2010 ......................................... 32 Figure 3-6 U.S. Nutrition Industry Raw Material Sales by Product, 2000-2010 ...................................................... 32 Figure 3-7 U.S. Nutrition Industry Raw Material Sales Growth by Product, 2000-2010 ......................................... 33 Figure 3-8 U.S. Supplements, Functional, and N&OPC & Household Raw Ingredient Sales, 2000-2011e .............. 33 Figure 3-9 U.S. Raw Material Supplement & Functional Ingredient Sales & Growth, 1997-2011e ........................ 34 Figure 3-10 Top Nutrition Industry Supply Companies in 2010 – Part I .................................................................. 35 Figure 3-11 Top Nutrition Industry Supply Companies in 2010 – Part II ................................................................. 36 Figure 3-12 U.S. Nutrition Industry Raw Material Sales by Product, 2011e-2017e ................................................ 37 Figure 3-13 U.S. Raw Material Nutrition Industry Sales & Growth, 2000-2017e .................................................... 37 Figure 3-14 U.S. Nutrition Industry Value Chain Channel Detail in 2010 ................................................................ 38 Figure 3-15 U.S. Nutrition Industry Wholesale Sales as % Consumer Sales, 1996-2011e ....................................... 38 Figure 3-16 U.S. Nutrition Industry Wholesale Sales by Product in 2010 ............................................................... 39 Figure 3-17 U.S. Nutrition Industry Wholesale Sales by Product, 2000-2010 ......................................................... 40 Figure 3-18 U.S. Nutrition Industry Wholesale Sales Growth by Product, 2000-2010 ............................................ 40 Figure 3-19 U.S. Nutrition Industry Wholesale Sales by Product, 2011e-2017e ..................................................... 40 Figure 3-20 U.S. Nutrition Industry Wholesale Sales Growth by Product, 2011e-2017e ........................................ 41 Figure 3-21 U.S. Wholesale Nutrition Industry Sales & Growth, 1997-2017e ........................................................ 41 Figure 3-22 U.S. Nutrition Industry Consumer Sales by Product in 2010 ................................................................ 42 Figure 3-23 U.S. Nutrition Industry Consumer Sales by Product , 2000-2010 ........................................................ 43 Video 3-24 Al Powers, NOW Foods ......................................................................................................................... 43 Figure 3-25 U.S. Nutrition Industry Consumer Sales Growth by Product, 2000-2010 ............................................ 44 Figure 3-26 U.S. Nutrition Industry Consumer Sales by Product as % of Total, 2000-2010 .................................... 44 Figure 3-27 U.S. Nutrition Industry Consumer Sales Growth by Product in 2010 .................................................. 45 Figure 3-28 U.S. Nutrition Industry Consumer Sales & Growth, 2000-2017e ......................................................... 45 Figure 3-29 U.S. Nutrition Industry Consumer Sales by Channel in 2010 ............................................................... 46 Video 3-30 Michael Scamarcia, Standard Process .................................................................................................. 47 Figure 3-31 U.S. Nutrition Industry Consumer Sales & Growth by Channel in 2010 .............................................. 47 Figure 3-32 U.S. Nutrition Industry Consumer Sales by Channel, 2000-2010 ......................................................... 48 Figure 3-33 U.S. Nutrition Industry Consumer Sales by Product, 2011e-2017e ..................................................... 48 Figure 3-34 U.S. Nutrition Industry Consumer Sales Growth by Product, 2011e-2017e ........................................ 49 Figure 3-35 U.S. Nutrition Industry Consumer Sales by Product as % of Total, 2011e-2017e ................................ 50 Figure 3-36 U.S. Nutrition Industry Estimated Consumer Compound Annual Sales Growth, 2011e-2017e .......... 50 Figure 3-37 RMIS Survey: Factors Impacting Companies in Last 12 Months .......................................................... 59 Figure 3-38 RMIS Survey: Factors Impacting Company Growth in Last 12 months ................................................ 60 Figure 3-39 RMIS Survey: Impact of New FDA NDI (New Dietary Ingredients) Guidance ....................................... 61 Figure 3-40 RMIS Survey: Concern Regarding Regulatory Scrutiny Related to the NDI Guidance ......................... 61 Figure 3-41 RMIS Survey: Ingredient Categories ..................................................................................................... 64 Video 3-42 Sourcing Ingredients from China .......................................................................................................... 68 Figure 4-1 U.S. Dietary Supplement Industry Value Chain in 2010 ......................................................................... 87
NBJ’s Nutritional Raw Material & Ingredient Supply Report 2011
Figure 4-2 U.S. Dietary Supplement Value Chain, 2000-2010 ................................................................................. 88 Figure 4-3 U.S. Dietary Supplement Raw Material Sales by Product in 2010 ......................................................... 88 Figure 4-4 U.S. Dietary Supplement Raw Material Sales by Product, 2000-2010 ................................................... 89 Figure 4-5 U.S. Dietary Supplement Raw Material Sales Growth by Product, 2000-2010 ...................................... 89 Figure 4-6 U.S. Raw Material Dietary Supplement Sales & Growth, 1997-2011e ................................................... 90 Figure 4-7 U.S. Dietary Supplement Raw Supply to Wholesale Manufacturing Indices, 1995-2011e .................... 90 Figure 4-8 U.S. Dietary Supplement Raw Supply Sales Ratios, 1995-2011e ........................................................... 91 Figure 4-9 U.S. Dietary Supplement Raw Material Sales by Product, 2011e-2017e ............................................... 91 Figure 4-10 U.S. Raw Material Dietary Supplement Sales & Growth, 1997-2017e ................................................. 92 Figure 4-11 U.S. Dietary Supplement Wholesale Sales by Product in 2010 ............................................................ 93 Figure 4-12 U.S. Dietary Supplement Wholesale Sales by Product, 2000-2010 ..................................................... 93 Figure 4-13 U.S. Dietary Supplement Wholesale Sales Growth by Product, 2000-2010 ........................................ 94 Figure 4-14 U.S. Dietary Supplement Wholesale Sales Ratios, 1995-2011e ........................................................... 94 Figure 4-15 U.S. Dietary Supplement Wholesale Manufacturing to Consumer Sales Indices, 1995-2011e ........... 95 Figure 4-16 U.S. Dietary Supplement Wholesale Sales by Product, 2011e-2017e ................................................. 95 Figure 4-17 U.S. Wholesale Dietary Supplement Sales & Growth, 1997-2017e ..................................................... 96 Figure 4-18 Top 50 Dietary Supplement Companies in 2010: Part I ....................................................................... 97 Figure 4-19 Top 50 Dietary Supplement Companies in 2010: Part II ...................................................................... 98 Figure 4-20 Universe of U.S. Supplement Companies in 2010 ................................................................................ 99 Video 4-21 Harvey Kamil, NBTY ............................................................................................................................... 99 Figure 4-22 U.S. Consumer Dietary Supplement vs. Total Nutrition Industry, 2000-2010 ................................... 100 Figure 4-23 U.S. Dietary Supplement Consumer Sales by Product Category in 2010 ........................................... 101 Figure 4-24 U.S. Dietary Supplement Consumer Sales by Product , 2000-2010 ................................................... 101 Figure 4-25 U.S. Dietary Supplement Consumer Sales Growth by Product in 2010 ............................................. 102 Figure 4-26 U.S. Dietary Supplement Consumer Sales & Growth, 2000-2017e .................................................... 102 Figure 4-27 U.S. Dietary Supplement Consumer Sales by Channel in 2010 .......................................................... 103 Figure 4-28 U.S. Dietary Supplement Consumer Sales and Annual Growth by Channel, 2008-2010 ................... 104 Figure 4-29 U.S. Dietary Supplement Consumer Sales by Product, 2011e-2017e ................................................ 104 Figure 4-30 U.S. Dietary Supplements Estimated Compound Annual Consumer Sales Growth, 2011e-2017e ... 105 Video 4-31 Pierre Fitzgibbon, Atrium Innovations ................................................................................................ 105 Video 4-32 Ikhlas Kahn, PhD .................................................................................................................................. 109 Figure 5-1 U.S. Vitamin Supplement Value Chain, 2000-2010 .............................................................................. 117 Figure 5-2 U.S. Vitamin Supplement Value Chain Indices, 1995-2011e ................................................................ 118 Figure 5-3 U.S. Vitamins Value Chain Comparison for 2010 ................................................................................. 118 Figure 5-4 U.S. Vitamin Raw Material & Supply Sales by End Use Category in 2010 ............................................ 119 Figure 5-5 Worldwide Vitamin Raw Material & Supply Sales by Product, 2002-2011e ........................................ 119 Figure 5-6 U.S. Total Vitamin Raw Material & Supply Sales by Product, 2002-2011e .......................................... 119 Figure 5-7 U.S. Vitamin Raw Material & Supply Sales by Product – Supplement Use Only , 2002-2011e ............ 120 Figure 5-8 U.S. Vitamin Raw Material & Supply Sales by Product – Animal Use Only , 2002-2011e .................... 120 Figure 5-9 U.S. Vitamin Raw Material & Supply Sales by Product – Functional Food Use Only , 2002-2011e ..... 120 Figure 5-10 U.S. Vitamin Raw Material & Supply Sales by Product – HBC Use Only , 2002-2011e ...................... 121 Figure 5-11 U.S. Vitamin Supplement Raw Material Sales by Product Category in 2010 ..................................... 121 Figure 5-12 U.S. Vitamin vs. Total Supplement Raw Material Sales, 2000-2010 .................................................. 122 Figure 5-13 U.S. Vitamin vs. Total Supplement Raw Material Sales, 2011e-2017e .............................................. 122 Figure 5-14 U.S. Vitamin Supplement Raw Material Sales & Growth, 2000-2017e .............................................. 123 Figure 5-15 Leading Vitamin Raw Material Supply Companies in 2010 ................................................................ 124 Figure 5-16 U.S. Vitamin vs. Total Supplement Wholesale Sales, 2000-2010 ....................................................... 124 Figure 5-17 U.S. Vitamin vs. Total Supplement Wholesale Sales, 2011e-2017e ................................................... 125
Figure 5-18 U.S. Vitamin Supplement Wholesale Sales & Growth, 2000-2017e .................................................. 125 Figure 5-19 Top 20 Vitamin Companies in 2010 ................................................................................................... 126 Figure 5-20 U.S. Vitamin Supplement Consumer Sales by Product Category in 2010 .......................................... 127 Video 5-21 Ron Fugate, Alacer .............................................................................................................................. 127 Figure 5-22 U.S. Vitamin vs. Total Supplement Consumer Sales, 2000-2010 ....................................................... 128 Figure 5-23 U.S. Vitamin Consumer Sales by Product , 2000-2010 ....................................................................... 128 Figure 5-24 U.S. Vitamin Consumer Sales Growth by Product , 2000-2010.......................................................... 129 Figure 5-25 U.S. Vitamin Consumer Sales & Growth, 2000-2017e ....................................................................... 129 Figure 5-26 U.S. Vitamin Consumer Sales by Channel in 2010.............................................................................. 130 Figure 5-27 U.S. Vitamin C Supplement Raw Material vs. Consumer Sales, 2000-2010 ....................................... 130 Video 5-28 The New Face of Vitamin C ................................................................................................................. 131 Figure 5-29 U.S. Vitamin C Supplement Consumer & Raw Material Sales Comparison, 1995-2010 .................... 131 Figure 5-30 U.S. Vitamin E Supplement Raw Material vs. Consumer Sales, 2000-2010 ....................................... 132 Figure 5-31 U.S. Vitamin E Supplement Consumer & Raw Material Sales Comparison, 1995-2010 .................... 132 Figure 5-32 U.S. Vitamin B Supplement Raw Material vs. Consumer Sales, 2000-2010 ....................................... 133 Figure 5-33 U.S. Vitamin B Supplement Consumer & Raw Material Sales Comparison, 1995-2010 .................... 133 Figure 5-34 B-12 Suppliers – Part I ........................................................................................................................ 134 Figure 5-35 B-12 Suppliers – Part II ....................................................................................................................... 135 Figure 5-36 B-12 Suppliers – Part III ...................................................................................................................... 136 Figure 5-37 U.S. Vitamin A Supplement Raw Material vs. Consumer Sales, 2000-2010 ....................................... 137 Figure 5-38 U.S. Vitamin A Supplement Consumer & Raw Material Sales Comparison, 1995-2010 .................... 137 Figure 6-1 U.S. Herb & Botanical Supplement Value Chain, 2000-2010 ............................................................... 145 Figure 6-2 U.S. Herb & Botanical Supplement Value Chain Indices, 1995-2011e ................................................. 146 Figure 6-3 U.S. Herb & Botanical Value Chain Comparison for 2010 .................................................................... 146 Figure 6-4 U.S. Herb & Botanical Raw Material Sales by Product Category in 2010 ............................................. 147 Figure 6-5 U.S. Herb & Botanical vs. Total Supplement Raw Material Sales, 2000-2010 ..................................... 147 Figure 6-6 U.S. Herb & Botanical vs. Total Supplement Raw Material Sales, 2011e-2017e ................................. 148 Figure 6-7 U.S. Herb & Botanical Supplement Raw Material Sales & Growth, 2000-2017e ................................. 148 Figure 6-8 U.S. Herb & Botanical Raw Material Sales by Product, 2000-2010 ...................................................... 149 Figure 6-9 Noni Suppliers – Part I .......................................................................................................................... 150 Figure 6-10 Noni Suppliers – Part II ....................................................................................................................... 151 Figure 6-11 Noni Suppliers – Part III ...................................................................................................................... 152 Figure 6-12 Garlic Suppliers – Part I ...................................................................................................................... 153 Figure 6-13 Garlic Suppliers – Part II ..................................................................................................................... 154 Figure 6-14 Garlic Suppliers – Part III .................................................................................................................... 155 Figure 6-15 Garlic Suppliers – Part IV .................................................................................................................... 156 Figure 6-16 American Ginseng Suppliers – Part I .................................................................................................. 157 Figure 6-17 American Ginseng Suppliers – Part II ................................................................................................. 158 Figure 6-18 American Ginseng Suppliers – Part III ................................................................................................ 159 Figure 6-19 Panax Ginseng Suppliers – Part I ........................................................................................................ 160 Figure 6-20 Panax Ginseng Suppliers – Part II ....................................................................................................... 161 Figure 6-21 Panax Ginseng Suppliers – Part III ...................................................................................................... 162 Figure 6-22 Panax Ginseng Suppliers – Part IV ...................................................................................................... 163 Figure 6-23 Leading Herb & Botanical Raw Material Supply Companies in 2010 ................................................. 164 Figure 6-24 U.S. Herb & Botanical vs. Total Supplement Wholesale Sales, 2000-2010 ........................................ 165 Figure 6-25 U.S. Herb & Botanical vs. Total Supplement Wholesale Sales, 2011e-2017e .................................... 165 Figure 6-26 U.S. Herb & Botanical Supplement Wholesale Sales & Growth, 2000-2017e ................................... 166
NBJ’s Nutritional Raw Material & Ingredient Supply Report 2011
Figure 6-27 Top 20 Herb & Botanical Companies in 2010 ..................................................................................... 167 Figure 6-28 U.S. Herb & Botanical Consumer Sales by Product Category in 2010 ................................................ 168 Figure 6-29 U.S. Herb & Botanical vs. Total Supplement Consumer Sales , 2000-2010 ....................................... 168 Figure 6-30 U.S. Top 50 Herb & Botanical Products Ranked by Consumer Sales , 2001-2010: Part I ................... 169 Figure 6-31 U.S. Top 50 Herb & Botanical Products Ranked by Consumer Sales , 2001-2010: Part II .................. 170 Figure 6-32 U.S. Herb & Botanical Consumer Sales Growth for Top 10 Products , 2001-2010 ............................ 171 Figure 6-33 U.S. Herb & Botanical Consumer Sales & Growth, 2000-2017e ........................................................ 171 Figure 6-34 U.S. Herb & Botanical Consumer Sales by Channel in 2010 ............................................................... 172 Figure 6-35 U.S. Herb & Botanical vs. Dietary Supplement Sales Growth, 2000-2017e ....................................... 173 Figure 7-1 U.S. Sports Nutrition Supplement Value Chain, 2000-2010 ................................................................. 183 Figure 7-2 U.S. Sports Nutrition Supplement Value Chain Indices, 1995-2011e .................................................. 184 Figure 7-3 U.S. Sports Nutrition Value Chain Comparison for 2010 ..................................................................... 184 Figure 7-4 U.S. Sports Nutrition vs. Total Supplement Raw Material Sales, 2000-2010 ....................................... 185 Figure 7-5 U.S. Sports Nutrition vs. Total Supplement Raw Material Sales, 2011e-2017e ................................... 185 Figure 7-6 U.S. Sports Nutrition Supplement Raw Material Sales & Growth, 2000-2017e .................................. 186 Figure 7-7 Whey Suppliers, Part I .......................................................................................................................... 187 Figure 7-8 Whey Suppliers, Part II ......................................................................................................................... 188 Figure 7-9 Leading Sports Nutrition Supplement Raw Material Supply Companies in 2010 ................................ 189 Figure 7-10 U.S. Sports Nutrition vs. Total Supplement Wholesale Sales, 2000-2010 ......................................... 190 Figure 7-11 U.S. Sports Nutrition vs. Total Supplement Wholesale Sales, 2011e-2017e ..................................... 190 Figure 7-12 U.S. Sports Nutrition Supplement Wholesale Sales & Growth, 2000-2017e ..................................... 191 Figure 7-13 Top 20 Sports Nutrition Supplement Companies in 2010 .................................................................. 192 Figure 7-14 U.S. Sports Nutrition Supplement Consumer Sales by Product Category in 2010 ............................. 193 Figure 7-15 U.S. Sports Nutrition Supplements vs. Total Supplement Consumer Sales , 2000-2010 ................... 193 Figure 7-16 U.S. Sports Nutrition Supplement Consumer Sales by Product , 2000-2010 ..................................... 194 Figure 7-17 U.S. Sports Nutrition Supplement Consumer Sales Growth by Product , 2000-2010 ........................ 194 Figure 7-18 U.S. Sports Nutrition Supplement Consumer Sales & Growth, 2000-2017e ..................................... 195 Figure 7-19 U.S. Sports Nutrition Consumer Sales by Channel in 2010 ................................................................ 195 Figure 7-20 U.S. Sports Nutrition vs. Dietary Supplements Consumer Sales Growth, 2000-2017e...................... 196 Figure 8-1 U.S. Mineral Supplement Value Chain, 2000-2010 .............................................................................. 201 Figure 8-2 U.S. Mineral Supplement Value Chain Indices, 1995-2011e ................................................................ 201 Figure 8-3 U.S. Mineral Value Chain Comparison for 2010 ................................................................................... 202 Figure 8-4 U.S. Mineral Supplement Raw Material Sales by Product Category in 2010 ....................................... 202 Figure 8-5 U.S. Mineral vs. Total Supplement Raw Material Sales, 2000-2010 .................................................... 203 Figure 8-6 U.S. Mineral vs. Total Supplement Raw Material Sales, 2011e-2017e ................................................ 203 Figure 8-7 U.S. Mineral Supplement Raw Material Sales & Growth, 2000-2017e ................................................ 204 Figure 8-8 U.S. Mineral Raw Material Sales by Product, 2000-2010 ..................................................................... 204 Figure 8-9 Leading Mineral Raw Material Supply Companies in 2010 .................................................................. 205 Figure 8-10 U.S. Mineral vs. Total Supplement Wholesale Sales, 2000-2010 ....................................................... 206 Figure 8-11 U.S. Mineral vs. Total Supplement Wholesale Sales, 2011e-2017e ................................................... 206 Figure 8-12 U.S. Mineral Supplement Wholesale Sales & Growth, 2000-2017e .................................................. 207 Figure 8-13 Top 20 Mineral Companies in 2010 ................................................................................................... 208 Figure 8-14 U.S. Mineral Consumer Sales by Product Category in 2010 ............................................................... 209 Figure 8-15 U.S. Minerals vs. Total Supplement Consumer Sales , 2000-2010 ..................................................... 209 Figure 8-16 U.S. Mineral Consumer Sales by Product , 2000-2010 ....................................................................... 210 Figure 8-17 U.S. Mineral Consumer Sales & Growth, 2000-2017e ....................................................................... 210 Figure 8-18 U.S. Mineral Consumer Sales by Channel in 2010.............................................................................. 211 Figure 8-19 U.S. Minerals vs. Dietary Supplements Consumer Sales Growth, 2000-2017e ................................. 212
Figure 9-1 U.S. Meal Replacement Supplement Value Chain, 2000-2010 ............................................................ 217 Figure 9-2 U.S. Meal Replacement Supplement Value Chain Indices, 1995-2011e .............................................. 217 Figure 9-3 U.S. Meal Replacement Supplement Value Chain Comparison in 2010 .............................................. 218 Figure 9-4 U.S. Meal Replacement vs. Total Supplement Raw Material Sales, 2000-2010 .................................. 218 Figure 9-5 U.S. Meal Replacement vs. Total Supplement Raw Material Sales, 2011e-2017e .............................. 218 Figure 9-6 U.S. Meal Replacement Supplement Raw Material Sales & Growth, 2000-2017e .............................. 219 Figure 9-7 Leading Meal Replacement Raw Material Supply Companies in 2010 ................................................ 220 Figure 9-8 U.S. Meal Replacement vs. Total Supplement Wholesale Sales, 2000-2010 ....................................... 221 Figure 9-9 U.S. Meal Replacement vs. Total Supplement Wholesale Sales, 2011e-2017e ................................... 221 Figure 9-10 U.S. Meal Replacement Supplement Wholesale Sales & Growth, 2000-2017e ................................ 222 Figure 9-11 Top 10 Meal Replacement Supplement Companies in 2010 ............................................................. 223 Figure 9-12 U.S. Meal Replacement vs. Total Supplement Consumer Sales , 2000-2010 .................................... 223 Figure 9-13 U.S. Meal Replacement Consumer Sales & Growth, 2000-2017e ..................................................... 224 Figure 9-14 U.S. Meal Replacement Consumer Sales by Channel in 2010 ............................................................ 225 Figure 9-15 U.S. Meal Replacement vs. Dietary Supplements Consumer Sales Growth, 2000-2017e ................. 225 Figure 10-1 U.S. Specialty Supplement Value Chain, 2000-2010 .......................................................................... 229 Figure 10-2 U.S. Specialty Supplement Value Chain Indices, 1995-2011e ............................................................ 229 Figure 10-3 U.S. Specialty Supplement Value Chain Comparison in 2010 ............................................................ 230 Figure 10-4 U.S. Specialty Supplement Raw Material Sales by Product Category in 2010 ................................... 230 Figure 10-5 U.S. Specialty vs. Total Supplement Raw Material Sales, 2000-2010 ................................................ 231 Figure 10-6 U.S. Specialty vs. Total Supplement Raw Material Sales, 2011e-2017e ............................................ 231 Figure 10-7 U.S. Specialty Supplement Raw Material Sales & Growth, 2000-2017e ............................................ 232 Figure 10-8 U.S. Specialty Supplement Raw Material Sales by Product, 2000-2010 ............................................ 232 Figure 10-9 Leading Specialty Supplement Raw Material Supply Companies in 2010 ......................................... 233 Figure 10-10 U.S. Specialty vs. Total Supplement Wholesale Sales, 2000-2010 ................................................... 234 Figure 10-11 U.S. Specialty vs. Total Supplement Wholesale Sales, 2011e-2017e ............................................... 234 Figure 10-12 U.S. Specialty Supplement Wholesale Sales & Growth, 2000-2017e .............................................. 235 Figure 10-13 Top 20 Specialty Supplement Companies in 2010 ........................................................................... 236 Figure 10-14 U.S. Specialty Supplement Consumer Sales by Product Category in 2010 ...................................... 237 Figure 10-15 U.S. Specialty Supplement vs. Total Supplement Consumer Sales , 2000-2010 .............................. 237 Figure 10-16 U.S. Specialty Supplement Consumer Sales by Product , 2000-2010 .............................................. 238 Figure 10-17 U.S. Specialty Consumer Sales & Growth, 2000-2017e ................................................................... 239 Figure 10-18 U.S. Specialty Consumer Sales by Channel in 2010 .......................................................................... 239 Figure 10-19 U.S. Specialty vs. Total Dietary Supplements Consumer Sales Growth, 2000-2017e ..................... 240 Figure 10-20 U.S. Melatonin Supplement Raw Material vs. Consumer Sales, 2000-2010 .................................... 241 Figure 10-21 U.S. Melatonin Supplement Consumer & Raw Material Sales Comparison, 1995-2010 ................. 241 Figure 10-22 U.S. Probiotic Supplement Raw Material vs. Consumer Sales, 2000-2010 ...................................... 242 Figure 10-23 U.S. Probiotic Supplement Consumer & Raw Material Sales Comparison, 1995-2010 ................... 242 Figure 10-24 Probiotic Suppliers – Part I ............................................................................................................... 243 Figure 10-25 Probiotic Suppliers – Part II .............................................................................................................. 244 Figure 10-26 Probiotic Suppliers – Part III ............................................................................................................. 245 Figure 10-27 U.S. DHEA Supplement Raw Material vs. Consumer Sales, 2000-2010 ........................................... 246 Figure 10-28 U.S. DHEA Supplement Consumer & Raw Material Sales Comparison, 1995-2010 ........................ 246 Figure 10-29 U.S. Fish/Animal Oil Supplement Raw Material vs. Consumer Sales, 2000-2010 ............................ 247 Figure 10-30 U.S. Fish/Animal Oils Supplement Consumer & Raw Material Sales Comparison, 1995-2010........ 247 Figure 10-31 Fish Oil Suppliers – Part I .................................................................................................................. 248 Figure 10-32 Fish Oil Suppliers – Part II ................................................................................................................. 249
NBJ’s Nutritional Raw Material & Ingredient Supply Report 2011
Figure 10-33 Fish Oil Suppliers – Part III ................................................................................................................ 250 Figure 10-34 U.S. Plant Oil Supplement Raw Material vs. Consumer Sales, 2000-2010 ....................................... 251 Figure 10-35 U.S. Plant Oil Supplement Consumer & Raw Material Sales Comparison, 1995-2010 .................... 251 Figure 10-36 Flaxseed Oil Suppliers – Part I .......................................................................................................... 252 Figure 10-37 Flax Suppliers – Part II ...................................................................................................................... 253 Figure 10-38 U.S. Glucosamine/Chondroitin Supplement Raw Material vs. Consumer Sales, 2000-2010 ........... 254 Figure 10-39 U.S. Glucosamine/Chondroitin Supplement Consumer & Raw Material Sales Comparison, 1995-2010 ....................................................................................................................................................................... 254 Figure 10-40 Glucosamine Suppliers – Part I ......................................................................................................... 255 Figure 10-41 Glucosamine Suppliers – Part II ........................................................................................................ 256 Figure 10-42 Glucosamine Suppliers – Part III ....................................................................................................... 257 Figure 10-43 Glucosamine Suppliers – Part IV ...................................................................................................... 258 Figure 10-44 U.S. Bee Products Supplement Raw Material vs. Consumer Sales, 2000-2010 ............................... 259 Figure 10-45 U.S. Bee Products Supplement Consumer & Raw Material Sales Comparison, 1995-2010 ............ 259 Figure 10-46 U.S. CoQ10 Supplement Raw Material vs. Consumer Sales, 2000-2010 ......................................... 260 Figure 10-47 U.S. CoQ10 Supplement Consumer & Raw Material Sales Comparison, 1995-2010 ....................... 260 Figure 10-48 CoQ10 Suppliers – Part I ................................................................................................................... 261 Figure 10-49 CoQ10 Suppliers – Part II .................................................................................................................. 262 Figure 10-50 CoQ10 Suppliers – Part III ................................................................................................................. 263 Figure 10-51 CoQ10 Suppliers – Part IV ................................................................................................................ 264 Figure 10-52 U.S. 5HTP Supplement Raw Material vs. Consumer Sales, 2000-2010 ............................................ 265 Figure 10-53 U.S. 5HTP Supplement Consumer & Raw Material Sales Comparison, 1995-2010 ......................... 265 Figure 10-54 U.S. SAMe Supplement Raw Material vs. Consumer Sales, 2000-2010 ........................................... 266 Figure 10-55 U.S. SAMe Supplement Consumer & Raw Material Sales Comparison, 1998-2010 ........................ 266 Figure 10-56 SAMe Suppliers – Part I .................................................................................................................... 267 Figure 10-57 SAMe Suppliers – Part II ................................................................................................................... 268 Figure 10-58 U.S. MSM Supplement Raw Material vs. Consumer Sales, 2000-2010 ............................................ 269 Figure 10-59 U.S. MSM Supplement Consumer & Raw Material Sales Comparison, 1995-2010 ......................... 269 Figure 10-60 MSM Suppliers – Part I ..................................................................................................................... 270 Figure 10-61 MSM Suppliers – Part II .................................................................................................................... 271 Figure 10-62 MSM Suppliers – Part III ................................................................................................................... 272 Figure 10-63 U.S. Gelatin Supplement Raw Material vs. Consumer Sales, 2000-2010 ......................................... 273 Figure 10-64 U.S. Gelatin Supplement Consumer & Raw Material Sales Comparison, 1995-2010 ...................... 273 Figure 10-65 U.S. Digestive Enzyme Supplement Raw Material vs. Consumer Sales, 2000-2010 ........................ 274 Figure 10-66 U.S. Digestive Enzyme Supplement Consumer & Raw Material Sales Comparison, 1995-2010 ..... 274 Figure 10-67 Enzyme Suppliers – Part I ................................................................................................................. 275 Figure 10-68 Enzyme Suppliers – Part II ................................................................................................................ 276 Figure 10-69 U.S. Homeopathic Supplement Raw Material vs. Consumer Sales, 2000-2010 .............................. 277 Figure 10-70 U.S. Homeopathic Supplement Consumer & Raw Material Sales Comparison, 1995-2010 ............ 277 Video 10-71 Aker BioMarine talks Krill .................................................................................................................. 279 Figure 11-1 U.S. Functional Food & Beverage Value Chain, 2000-2010................................................................ 293 Figure 11-2 U.S. Raw Material Functional Food & Beverage Sales & Growth, 1996-2011e ................................. 294 Figure 11-3 U.S. Functional Food & Beverage vs. Total Nutrition Raw Material Sales, 2000-2010 ...................... 294 Figure 11-4 U.S. Functional Food Raw Supply Sales Ratios, 1996-2011e .............................................................. 295 Figure 11-5 U.S. Functional Food & Beverage vs. Total Nutrition Raw Material Sales, 2011e-2017e .................. 295 Figure 11-6 U.S. Raw Material Functional Food & Beverage Sales & Growth, 2000-2017e ................................. 296 Figure 11-7 U.S. Functional Food & Beverage Wholesale Sales & Growth, 1997-2011e ...................................... 297 Figure 11-8 U.S. Functional Food & Beverage vs. Total Nutrition Wholesale Sales, 2000-2010 ........................... 297
As NBJ reported in our September 2011 issue on raw material & ingredient supply in the nutrition industry,
supply pricing is high, it’s volatile, and there’s no real end in sight. Pricing across the major categories of supplements—from dramatic spikes in natural vitamin E raising eyebrows among many insiders, to multi-tiered increases from such major suppliers as DSM, BASF, Solae, Kyowa Hakko, Frutarom and Beneo—has begun its inevitable creep into finished products, despite a languishing U.S. economy in no shape for inflationary pressure at any material or sustained level. The story is comparable, if not exaggerated still further, in commodity food ingredients, with significant price hikes announced in 2010 and 2011 by Unilever and General Mills to account for this pressure at the raw-material level, specifically in wheat, cocoa, milk, crude oil and vegetable oil.
The corporate response to these wild inflationary swings in core inputs has remained tepid thus far, with pass-throughs to consumers something of a last resort, but companies are running out of places to hide. Speaking to Wall Street on a quarterly earnings call, Richard Galanti, CFO at Costco, warned of imminent price increases in his stores, saying: “It is what it is, and we’re fighting to delay passing the increases on and to sell as much at the old price as we can.” Costco plans to eat into margins on occasion, but, according to Galanti, “those are the exception, not the norm.” The U.S. Department of Agriculture (USDA) upped its forecast for 2011 food pricing in March to a 3% to 4% increase, after years of flat to minimal growth. In August, USDA reported that “cattle prices reached record highs during the first half of 2011,” with little relief in sight as herd expansion proves anemic in the face of drought conditions and high feed and energy prices.
Oxfam predicts a doubling in food prices by the year 2030. The prediction goes even higher if global climate change remains unchecked and uncorrected. In a survey released this June, Oxfam found that 73% of respondents in the United States list rising costs as their biggest food worry. Meanwhile, the United Nations Food & Agricultural Organisation (FAO) predicts sustained high prices through 2012 in commodities such as maize, wheat and sugar. Speaking to National Public Radio in February, Abdolreza Abbassian, senior economist at FAO, said: “Food security is a very important issue, not just because prices are so high but also because they
Figure 1-1 U.S. Supplements, Functional, and N&OPC & Household Raw Ingredient Sales, 1996-2011e
Source: Nutrition Business Journal estimates. ($mil., raw material sales, all channels)*Functional Ingredients includes only
fortification ingredients for food and beverage products.
are very volatile. It often seems that markets may not be functioning well.” In April, arabica coffee bean prices climbed above $3 per pound for the first time in 30 years, largely due to speculative trading by international investors.
Why is this happening? For a deeper assessment of the macro trends shaping supply prices across the industry, see the commentary and articles that follow within this extensive report. For a quick bottom line, consider the greater food demands of burgeoning middle classes in the developing world, severe weather conditions across the globe, and rising oil prices. Add them together, and the longstanding supply and demand dynamics at play in the world food supply have flipped poles—we’re simply not able to produce enough food these days. Inventories are low, climates fickle, and the risks ever higher as shocks to the fragile balance between supply and demand produce dramatic and volatile impacts on pricing.
To date, finished-goods manufacturers and retailers have protected consumers from many of these increases, but that willingness seems largely spent. The dramatic nature of cost increases in raw materials has grown too much to stomach and the pricing volatility too hard to hedge. Consumers, already facing stagnant wages, now face higher food costs to boot. How these consumers respond remains a point of debate, but expect them to demand more value and more quality from every purchase. The retreat to quality seems especially evident in strong organic food sales (up 8% in 2010, according to NBJ research) and continued momentum for supplement archetypes like fish oil (up 11%) and probiotics (up 19%). Wherever consumers go next, just don’t expect them to go quietly. It’s ugly out there.
NBJ’s 2010 Raw Material & Ingredient Supply Report includes sales and growth estimates for functional
foods and beverages, dietary supplements, natural & organic foods and beverages and natural & organic personal care and household products. In this report you will find:
Quantification of the U.S. nutrition industry supply chain, including market size estimates for raw materials, wholesale sales and consumer sales
A competitive analysis of and discussion of trends affecting individual raw material and ingredient product categories within the U.S. nutrition industry
Detailed sections for all supplement subcategories, including: vitamins, herbs & botanicals, minerals, sports nutrition, meal supplements and specialty supplements
Business profiles of 143 ingredient supply companies serving the U.S. market, including SWOT analyses for 63 of these companies
A history of key events in the raw material and ingredient supply industry over the last two decades