A wide range of nutricosmetics products can be found in the United States—and, although America lags behind Japan and Europe in its embrace of “beauty from within” supplements and beverages, the concept has become mainstream enough for The New York Times to take a swipe at it. “Beauty from within, achieved with a pill, sounds so easy, so short cut, so bold, like those T-shirts that say ‘Spiritual Gangster’ on the front,” wrote Alex Kuczynski in a May 6, 2010, article for NYT’s Style Magazine. “If you can just announce to the world that you are a really cool spiritual person with an open heart chakra, why not just take a pill and believe you are gorgeous?”

Kuczynski’s comment—and the entire gist of her article—hits upon the key question plaguing the nutricosmetics market: Do these products really work?

While some beauty-from-within offerings are more efficacious than others, the inconvenient truth for the entire nutricosmetics industry is that many (but certainly not all) of its products and ingredients lack the science necessary to prove their benefits to consumers. This, of course, is hindering U.S. sales—particularly at a time when consumers are being forced to make more careful spending choices. “Americans are more skeptical of the beauty-from-within concept,” Carrie Mellage, director of consumer products at The Kline Group, told (NBJ’s sister publication) Functional Ingredients magazine. “There is a cultural emphasis on scientific investigation, and Americans also want instant results, which nutricosmetics don’t provide.”

According to Alda Brandao, product manager for PL Thomas’s Cosmeceuticals & Nutricosmetics division, the nutricosmetic ingredient Lipowheat is one exception. The product contains natural ceramides from vegetable origin that have been shown to restore skin barrier functions, thus ensuring healthy hydration and the softness and wellness of the skin.

Lipowheat’s efficacy has been demonstrated in three clinical studies, and the product received NDI (new dietary ingredient) notification without objection from the U.S. Food and Drug Administration (FDA) in April of this year—not an easy feat these days. “The NDI is going to bring a lot of attention to this product,” Brandao said.

Lipowheat is manufactured by Hitex, a subsidiary of Lavipharm Group in Paris; PL Thomas is the exclusive marketer of the ingredient, which won the French Association of Antioxidants’s 2007 prize for best health and beauty ingredient. The association’s prize committee gave Lipowheat the award based, in part, on the quality of its clinical studies. In October 2009, Lipowheat received the award for best innovation in dietary ingredients from Isogone Association in France.

“Lipowheat should set the science standard for the nutricosmetics industry,” Brandao said. “If all nutricosmetics products had such solid science and safety data behind them, the consumer would feel more comfortable embracing the beauty-from-within concept.” Lipowheat is available in oil and water-soluble powder formats and can be used in soft gel, capsule or stick pack products, Brandao said. “The beauty of this ingredient is the flexibility it offers for formulation.”

Genuine Health is the first manufacturer to use Lipowheat in a nutricosmetic product sold in the United States and Canada. The company’s dermalipid line, which features the natural ceramides ingredient, hit the market in April 2010.

Lipowheat and other promising nutricosmetic ingredients and finished products will be the focus of The NutriCosmetic Summit, which will be held Thursday, June 10, at the Renaissance hotel in Las Vegas. Kimberly Stewart, former editorial director of Functional Ingredients magazine, and I will open the event’s business & marketing track by first providing some sales context for the beauty-from-within market and then presenting case studies of five nutricosmetics products, including Nestlé’s Glowelle, Solazyme Health Sciences’ Altruest and Isocell North America’s GliSODin Skin Nutrients. Each case study will explore the consumer and ingredient trends being addressed by the product and discuss the brand’s strengths and weaknesses, as well as the opportunities and threats it faces in the market today.

NBJ’s 2010 Nutrition Industry Overview issue, which publishes in July, will also include an in-depth look at the U.S. nutricosmetics market. Subscribe to the journal at the NBJ website.

Related NBJ links:

Will Glowelle Break Open the Beauty From Within Market in the United States?

2009 Supplement Business Report

Baobab, Natural Preservatives and Other Hot N&OPC Ingredient Trends

Related Functional Ingredients magazine links:

NutriCosmetic Summit Offers Palette of Cutting-Edge Education

In a little over a week, nutrition industry executives from all over the world will be gathering in Anaheim, California, for the 2010 Nutracon Conference and Natural Products Expo West tradeshow. The Nutrition Business Journal team will be there to meet with industry participants, peruse the massive tradeshow floor, and bone up on the latest issues and trends shaping the global nutrition industry during the Nutracon and Expo West education sessions. We’ll also be presenting our annual NBJ State of the Industry session, during which we will share some of NBJ’s proprietary market data and get down to the “nitty gritty” with a panel of experts about some of the key strategic issues affecting dietary supplements, natural & organic products, and functional foods and beverages. Details about the session are below. We hope to see you there!

NBJ State of the Industry

10:30 a.m. – 12:00 p.m., Friday, March 12, Room 204AB

We’re changing things up a bit for this year’s NBJ State of the Industry presentation, which has become a must-attend education session for many industry executives at Expo West. NBJ Publisher and Editorial Director Patrick Rea will open the presentation with an analysis of how sales of dietary supplements, natural & organic products, and functional foods and beverages fared in 2009 and what we are expecting for 2010. Then, I and Nancy Coulter-Parker, editor in chief of Delicious Living magazine, will interview a panel of industry experts about key issues affecting supplements, natural & organic, and functional products.

On the panel will be:

• Julie Smolyansky, CEO of Lifeway Foods

• Todd Norton, chief operating officer at A.M. Todd Botanical Therapeutics

• Laura Batcha, chief of policy and external relations at the Organic Trade Association

• Mark Fergusson, CEO and chief financial officer at Down to Earth, Hawaii’s only vegetarian natural & organic food store chain

The questions we will be posing to our panelists (and the audience) include:

• Since the election of Barack Obama, the FDA and FTC have stepped up their enforcement of the label claims being used by food and beverage companies. Is this ultimately a good thing for the functional food and beverage industry? What are you expecting in 2010?

• If passed, what ramifications would McCain’s Dietary Supplement Safety Act of 2010 bring about for the industry and consumers? Would the bill do what is needed to weed out the bad players?

• In a statement defending his bill, McCain Dietary Supplement has said that, despite what opponents of his proposed legislation are claiming, “If you take a vitamin now, this bill will in no way restrict your ability to take that vitamin.” Is this true?

• McCain’s bill would require retailers to obtain written evidence from supplement manufacturers documenting that products are registered and adhere to all new FDA requirements. Would such a rule affect a retailer’s ability to offer a wide variety of legitimate supplements?

• The functional food and beverage industry continues to grow at a healthy pace, with new food and beverage products being launched every week. The problem is, however, that some companies will put just a small amount of a functional ingredient into a product just so that they can charge a price premium and promote the ingredient on the product’s packaging and label. How big of a problem is this for the functional food and beverage industry? Is “pixie dust” dosing a common practice? What are the ramifications for the functional food and beverage industry? What’s the solution?

• What really happened to organic during the recession? How did organic sales fare compared to natural sales in 2009, and what is expected for 2010? In what ways were consumers able to save money and still buy organic?

• In 2009, several organic companies introduced a “natural” product or dropped their organic content all together. Do you believe there was a large scale shift from organic to natural, or were these isolated examples?

• Even if only a few companies moved from organic to natural, how do these actions impact consumer perception of the value of organic compared to natural? Some organic companies I’ve spoken with have said consumers are so confused that they believe, in some instances, that natural is actually superior to organic. What are your thoughts on this?

• Does having multiple standards and certifications for natural & organic personal care result in too much consumer confusion?

Is there a question or issue you would like to hear NBJ and our panel of experts address during the State of the Industry presentation? If so, e-mail the question to cmast@nutritionbusiness.com.

Related NBJ links:

Global Supplement & Nutrition Industry Report 2010

February 2010: Functional Food and Beverage Issue

Organic Is Not Immune to Recessionary Woes

The Vitamin Shoppe’s better-than-expected initial public offering (IPO) on October 27 demonstrated that the public markets, which have been generally turned off by retail plays in recent years, see lots of opportunity in the dietary supplement and nutrition sector. The IPO was the first for a retail-based company in almost two years, and it raised about $150 million for the 434-store supplement chain. A week before The Vitamin Shoppe’s better-than-expected opening day, a group of 20 smaller nutrition-related companies convened in San Francisco for the fifth meeting of the Nutrition Capital Network (NCN). The purpose of the gathering was to network with private-equity and strategic investors and hopefully wow them with their 10-minute business pitches. Just as The Vitamin Shoppe’s successful opening day showed that the overall IPO market is beginning to thaw, the NCN meeting proved that innovation within the nutrition industry remains strong and that investors continue to see opportunities in the growing health and wellness market.

Chaired by Grant Ferrier and Thomas Aarts (who founded Nutrition Business Journal in 1996), NCN was created to help grease the financing wheels for entrepreneurs and introduce investors to the next generation of successful brands in the nutrition, natural and organic, and green product industries. More than 80 companies applied to present at NCN V. Ranging in scale from startups to a $100 million brand, the 20 chosen represented successful and growing businesses in the food and beverage, food service, supplements and nutrition, and skincare categories. “The level of sophistication in early-stage companies continues to grow, but the passion and drive of the individuals behind them has not subsided,” said Ferrier, who is NCN’s CEO and co-chairman. “We saw that in the 20 companies that presented last week but also in the 80-odd that applied during this cycle.”

Each company that presented represented an innovative technology or tapped into a growing trend within the overall nutrition industry. Below are a few highlights:

Cambridge Theranostics: Based in the United Kingdom, Cambridge Theranostics sells a lycopene-based supplement called Ateronon that is backed by a wealth of compelling research showing its ability to inhibit the oxidation of LDL (bad) cholesterol (oxidized LDL is what triggers heart attacks and other cardiac events). Ateronon is currently sold in 75% of all UK retail pharmacies, and the company is looking for capital to fund its expansion into the United States, the Middle East and China. Cambridge Theranostics is focused on educating practitioners and pharmacists on the benefits of Ateronon so that they will recommend it for their patients and customers.

Dale and Thomas Popcorn: What was interesting about this company is how successful it has been with both its retail brand (Popcorn, Indiana) and its direct-to-consumer brand (Dale and Thomas) without having made any real investment in advertising. Popcorn, Indiana is now the No. 2 popcorn behind Smart Food, and its better-for-you popcorn is selling well in alternative retail chains such as Bed Bath & Beyond and Best Buy.

Freshology: This Burbank, California-based company sells fresh, gourmet, portion-controlled meals directly to consumers, with the goal of taking on companies such as Nutrisystem and Jenny Craig. Freshology is also launching a line of frozen foods next year, and its business model taps into the growing consumer demand for healthy, customized meal solutions. With a production facility at the Burbank Airport, Freshology is able to send its fresh meals all over the country, and I see potential for the company partnering with gyms, wellness clubs and weight-loss clinics to offer fresh, portion-controlled meal solutions to their members.

Froozer: This Lake Mary, Florida-based company’s pitch was certainly the wackiest—and the best tasting. Froozer President Arnold Zweben wheeled in this machine that looked like a frozen yogurt maker. Into the machine went a bunch of frozen fruits and vegetables and out came this cold puree that looked and tasted a lot like soft serve ice cream—only it contained no added sugar, dairy or other ingredients. The machine is called a Transmogrification Unit, and it transforms frozen fruits and vegetables into a whole food frozen confection in seconds. The company said it has done a bunch of focus group research with kids, who like the product because it tastes and looks like soft serve ice cream. Froozer has developed a production system that is able to produce push up pops or other frozen confections made entirely of whole fruits and vegetables. The one I tasted was made with strawberries, bananas, turnips, tomatoes and cucumbers. It was really good and was something my two young boys would have loved.

Herbs of Mexico: Founded in 1948, Herbs of Mexico operates one health and wellness retail store dedicated to the Hispanic community in East Los Angeles, with a second store opening soon. The company wants to open more stores for the growing Hispanic population, which tends to be heavy users of herbal products and other complementary and alternative (CAM) therapies. In fact, Martin Lopez, Herbs of Mexico’s managing owner, said 80% of Hispanics use herbal products and 60% view herbs as medicine. The company also has an e-commerce model and is focused on first expanding its retail locations throughout the Southwest, where it hopes to open 35 to 40 stores in the next five to seven years.

Heritage Foods: Heritage Foods was founded by Patrick Martins, who founded Slow Food USA (he’s sort of a celebrity in the slow foods movement). Through a successful Internet/mail-order catalog model, Heritage Foods sells ethically raised heritage meats (such as Berkshire pork and Bourbon Red turkeys). With all of the recent meat safety scares and the backlash against factory farms, Heritage Foods could represent the future of meat production in the United States—at least for the growing segment of consumers who care about where their meat comes from and how it was raised. The company doesn’t appear to be going after the organic label, but in some ways what it is doing could do more to influence consumer purchasing habits.

Related links:

The Missing Link: NCN Connects Firms, Investors in Nutrition Industry

With Sales Thriving, Vitamin Shoppe Parent Files for IPO

M&A and Investment Activity Slows for U.S. Nutrition Industry

I have some very interesting news.

Daniel Fabricant, Interim Executive Director of the Natural Products Foundation, has agreed to join the NBJ Sports Nutrition & Weight-Loss webinar and present an expert review of the September 29 Senate Subcommittee hearing on steroid products being marketed as supplements, the FDA’s recent raid on Bodybuilding.com, the Hydroxycut recall and other regulatory-related events pertinent to dietary supplements, particularly sports and weight-loss products.

Our goal is to provide webinar attendees with an intelligent and realistic view into the current regulatory situation for supplements in the U.S. and Daniel is one of the most informed, if not the most informed, regulatory expert on this situation

To accommodate for Daniel’s schedule, we will be moving the webinar to 3pm ET/1pm MT/12pm PT on October 27th.

We hope you are as excited about Daniel’s involvement as we are.

To register for this event, please go to http://nutritionbusinessjournal.com/supplements/web-seminars/9-15-sports-weight-loss-seminar-nbj-supplement/

The Internet was once again the fastest-growing sales channel within the U.S. nutrition industry in 2008, expanding 22% to $1.4 billion last year, according to Nutrition Business Journal estimates. But, unfortunately, throwing time, dollars and other resources at a company’s online marketing and sales initiatives won’t guarantee sales success. In fact, without the right strategies, tactics and mindset, companies can actually lose money in their efforts to harness the Web as a sales and marketing vehicle. This reality seemed well understood by the 50-some nutrition industry executives who gathered today for the NBJ Summit Extension: Internet Marketing & Sales seminar at the 2009 Natural Products Expo East in Boston.

The paid session—which featured Paul Hannam, founder of Bright Green Leadership; Roy Bingham, head of e-commerce at RenewLife Formulas; Devin Ryerson, founder and CEO of PurePrescriptions.com; NBJ Publisher and Editorial Director Patrick Rea; and NBJ Co-founder Tom Aarts—was designed to help CEOs and other top executives learn from the best Internet marketing and sales practices that are currently emerging inside and outside of the nutrition industry.

A long list of actionable advice materialized from the two-hour session, including these highlights:

Be willing to fail: In today’s lightening fast online world, successful Internet marketing and sales requires an action-oriented mindset and willingness to experiment, Hannam said. If a company wants to get it right, it must be willing to get it wrong, he added. “You have to be constantly learning from your mistakes.”

Content remains royalty: Yes, content is still king, in part, because great content is the fastest, most-consistent way to obtain top listings placement within Google and other search engines. Content can build brands, but the goal is to become a trusted thought leader around a problem or issue—such as joint pain or healthy aging—rather than only a product or brand, Hannam noted. Blogs and social networks, including Facebook and Twitter, can help establish a company’s position and credibility around a chosen problem or issue.

Design Websites with users in mind: Consumers have very short attention spans, and they expect certain things when they arrive at a Website, such as a company or Website logo in the upper left corner and an internal search engine in the upper right corner, Ryerson said. They also first use Website navigation to browse for what they are looking for before turning to search and get frustrated when the checkout button isn’t immediately findable. Spend time evaluating well-designed e-commerce and information sites to better understand what works and why, he added.

Videos communicate authenticity: Rather than adorning a Website landing page with a pretty but irrelevant photo or other graphic, consider adding a short video from the company’s CEO or another trust-worthy individual to welcome users to your site and explain what you hope they will accomplish there, Hannam suggested. Videos, he said, build credibility and trust and are proving more powerful than static images. “Be informal in your video messages, as this helps boost authenticity,” Hannam added.

Be persistent: Most people don’t buy until after their sixth contact with a company, so don’t despair or give up if a new e-mail marketing list proves less than fruitful at first, Hannam noted. Use each communication to build relationships, offer people something of value—such as useful information or a purchasing offer—and make someone in your organization accountable for protecting your e-mail marketing lists from being over-used or abused.

Don’t break the rules just to make a buck: Dietary supplement companies that market and sell their products online with no regard to the Dietary Supplement Health and Education Act (DSHEA) might, in some cases, be able to make boatloads of money by duping consumers with illegal cancer cures or fraudulent offers, but they do so at the risk of the entire supplement market, Bingham said. “These companies are trashing our industry,” he said. Remaining DSHEA-compliant with all online marketing content—including meta search tags and online consumer reviews—is increasingly important to staying out of trouble with the FDA and FTC, Bingham and Ryerson noted.

A video replay of The NBJ Summit Extension: Internet Marketing & Sales session will be available for purchase via the NBJ Website for those wanting more advice and insights from this panel of experts.

Related NBJ links:

E-commerce Is Now a Must for Nutrition Firms

E-marketing: A Recession Essential for Every Company

Good Search Engine Marketing Key to Selling Supplements Online

Tips for Evaluating an E-marketing Campaign in the Nutrition Industry