Nutrition Business Journal

Processed food has become synonymous with the Western diet—and, although their products are generally healthier than the conventional potato chips and toaster pastries sold to Americans, natural & organic food companies are playing a part in enabling U.S. consumers to easily choose packaged options laden with fat, sugar and salt over healthier fresh foods.

According to an April 4 New York Times article, Americans consume 31% more packaged food than fresh food and much more processed food than people from nearly every other country in the world. The average American eats a total of 787 pounds of packaged foods, such as frozen meals, condiments, soups and baked goods, while consuming only 602 pounds of fresh vegetables, fruits, eggs, nuts, beans, meat, poultry and fish. On average, Spain, France and Mexico also each consume more packaged than fresh food per capita. In comparison, the average Chinese citizen eats 1,034 pounds of fresh foods and 116 pounds of packaged foods.

Of course, eating a diet made up predominantly of what celebrity chef Jamie Oliver has termed “processed crap” often leads to obesity and a cascade of serious, long-term health maladies, including cardiovascular disease and diabetes. “Processed foods contain large amounts of fat, salt and sugar, and Americans have become addicted to them,” T. Colin Campbell, a nutritionist at Cornell University, told the New York Times. “There is a lot of money tied up in the [packaged food] industry because it is profitable for companies to make these foods.” Americans also gravitate toward processed food because it is convenient and fits into a non-stop lifestyle that is spent in the car or in front of the computer or TV.

If you attended this year’s Natural Products Expo West tradeshow, you know the natural & organic food industry—like the overall U.S. food industry—is all about packaged convenience. I was amazed at the number of products designed to help people consume more antioxidants and other nutrients associated with fruits and vegetables without having to actually eat a fresh fruit or vegetable.

Although most of the natural & organic products sold in the United States are much healthier than their conventional counterparts, the industry is still guilty of peddling food and beverage products that are contributing to—rather than helping to prevent—America’s health crisis. This was a point Whole Foods Market CEO John Mackey lamented last summer when he acknowledged that his company now sells “a bunch of junk”—or in other words, food that, while natural or organic, is still loaded with fat, sugar and salt.

Whole Foods’ new campaign to “Retake Our Plates!”—which is devoted to encouraging food system reform and educating consumers on how to make healthier food choices—is certainly a step in the right direction. But this and other natural food retailers and really the entire natural & organic industry must do more to clean up the products they are selling to American consumers. And, at some point, rather than spending oodles of money to position highly processed food as being more nutritious, wouldn’t it be better to simply encourage people to enjoy the taste and goodness of fresh food?

As more consumers wise up to the fact that they are what they eat, those companies and retailers that can provide truly healthy alternatives that incorporate fresh over processed whenever possible will be in a good position to boost their bottom lines while helping the United States cope with its ballooning health crisis.

Related NBJ links:

March 2010: Organic Foods, Beverages and Personal Care

Much Work Remains in U.S. Diabesity War, Author Says

2010 Functional Food and Beverage Web Seminar

Renegade Lunch Lady Takes on School Lunch Programs

WhiteWave Foods, the Dean Foods division that owns the Horizon Dairy and Silk brands, ruffled feathers in the organic industry last year when it launched a natural version of its Silk soymilk and the first Horizon products that are not certified organic. As Nutrition Business Journal explores in its recently published 2010 Organic issue, some organic advocates fear that the moves will further confuse consumers about the differences that separate organic and natural products and could be the start of other large organic brands moving away from organic certification.

Yesterday, I had the opportunity to visit WhiteWave Foods’ headquarters in Broomfield, Colorado, with a group of other New Hope people. During the meeting, Blaine McPeak, WhiteWave’s new president, and Tyler Holm, commercial director for the Horizon brand, talked about the company’s decision to dabble in natural. Both McPeak and Holm emphasized that the new products are just a test—one that the company embarked on in an effort to provide more affordable, healthy products to those consumers who cannot afford the price premium that often accompanies certified organic products. The organic dairy category was particularly hard hit last year by soaring prices at a time when fewer consumers could pay them.

As McPeak noted, 99% of Horizon’s revenues were generated from the sale of certified organic products in 2009. Furthermore, WhiteWave remains committed to organic certification, he added, and will continue to devote resources to helping educate consumers about the value of organic agriculture.

The U.S. Department of Agriculture (USDA) strictly regulates the organic food industry through its National Organic Program (NOP), but the term natural is far less defined. Since 1993, the U.S. Food and Drug Administration (FDA) has vaguely described it to mean “nothing artificial or synthetic has been included in or has been added to a food that would not normally be expected to be in the food.” In essence, each manufacturer is able to define what natural means and abide by its own definition.

Now that Horizon offers several natural products, Holm said the company is using its Website and other outreach tools to educate consumers about what the natural label on its Little Blends yogurt and Milk Breakers single-serving milk products means. For Horizon, Holm said the natural label indicates that the product was produced without the use of artificial flavors, preservatives, colors and sweeteners, including no high fructose corn syrup, and are made using milk from cows not given artificial growth hormones (rbST).

According to NBJ estimates, natural came out slightly ahead over organic from a sales growth perspective in 2009. U.S. consumer sales of natural foods and beverages grew 6% to $13.6 billion, while organic food and beverage sales increased 5% to $22.3 billion.

NBJ is interested in your thoughts on this issue. Should more organic companies begin offering less-expensive natural products in an effort to reach a broader consumer base? Do such moves threaten organic’s foundation and future? What should be done to ease consumer confusion over organic vs. natural?

Related NBJ links:

Organic Foods, Beverages and Personal Care

Is Natural Beating Organic Because of Organic’s Higher Price?

Grocers Not Happy With Dean Foods’ Decision to Change Organic Silk Offerings

Eight dietary supplement manufacturers and marketers were named in a California lawsuit filed on March 2 that alleges some fish oil supplements have been sold containing illegally undisclosed and unnecessarily high levels of contamination with polychlorinated biphenyl (PCB) compounds. The eight companies named in the lawsuit are: CVS Pharmacy Inc., General Nutrition Corp. (GNC), Now Health Group Inc., Omega Protein Inc., Pharmavite LLC, Rite Aid Corp., Solgar Inc., and TwinLab Corp. The lawsuit alleges that the companies sold fish oil, shark oil, fish liver oil and shark liver oil supplements that have PCB contamination above the so-called “safe harbor” limits set for human PCB consumption under California’s Proposition 65. That law requires companies to warn consumers about contaminant exposures. Proposition 65, passed as a ballot initiative in 1986, was passed to force consumer products to eliminate toxic chemical ingredients or reduce them below published safe harbor limits in the past.

U.S. consumers spent $739 million on fish and animal oil supplements in 2008, making it the eighth most popular dietary supplement on Nutrition Business Journal’s list of the top 100 selling supplements in the United States. Many within the industry are wondering what the potential implications this lawsuit could have on the fish oil supplement market. NBJ reached out to two industry trade associations, as well as to legal experts with the Goodwin Procter law firm to determine what effect this might have on the industry; their responses are included below along with a statement from one of the defendants, TwinLab Corp.

• Forrest Hainline, attorney at the San Francisco office of Goodwin Procter: This threatened lawsuit highlights an essential problem in applying Proposition 65 to foods or supplements. The evidence is uncontroverted that omega-3 fatty acids are not only beneficial but essential for health. The evidence is overwhelming that Americans in general do not eat enough fish to obtain the appropriate amounts of omega-3 fatty acids. This might be due in part to the campaign to frighten people away from eating fish for fear of methyl mercury.

As the California Supreme Court recognized in Dowhal v. SmithKline Beecham Consumer Healthcare, 32 Cal.4th 910 (2004), “even if scientific evidence supports the existence of a risk, a warning is not necessarily appropriate: The problems of over warning are exacerbated if warnings must be given even as to very remote risks.” This is particularly true where the benefit of the product folks would be warned against outweigh the potential harm. This was true in the Tuna Case, which I tried and won. The benefits of eating fish (because of omega-3 fatty acids, among other benefits) far outweighed the remote and even theoretical risk of exposure to the minute amounts of methyl mercury.

The Food and Drug Administration (FDA), not a bounty hunter law firm under Proposition 65, should determine whether warnings on foods or supplements are appropriate, and what form they should take.

Note: Hainline also obtained a judgment for restaurants that Proposition 65 warnings concerning grilled chicken were preempted by federal law.

Joanne Gray, attorney at the New York City office of Goodwin Procter: I have provided legal advice to a number of dietary supplement companies over the years and have been continually disappointed at the number of frivolous lawsuits that have been filed against the industry, including Proposition 65 claims, consumer class actions claims and products liability lawsuits. It is important to mount a strong defense to these actions right from the start.

It is unfortunate that dietary supplement companies and retailers have faced Proposition 65 lawsuits, even when minute amount of substances hold no real risk of harm to the consumer. These lawsuits are a real threat to the survival of the smaller companies in the industry, and they also increase costs to consumers.

• Council for Responsible Nutrition (CRN): CRN believes the suit was filed in California in order to take advantage of a state law, Prop 65, which has conservative standards that are not law in the rest of the nation. Further, the information disclosed during the press conference danced around the details, offering a lack of specificity to the general public about the levels of polychlorinated biphenyl (PCB) compounds found in the fish oil products that were tested. Though the lawyers suggest that the levels of PCBs found in these products far exceed what is acceptable by Prop 65 standards, the actual levels of PCBs found in the majority of these products do not appear to exceed the Prop 65 limit (90 ng/day). Furthermore, they fail to mention that the Food and Drug Administration’s (FDA) tolerance level for PCBs in fish (2,000 parts per billion) far exceeds the levels of PCBs found in fish oil…

The bottom line is that consumers, whether they live in California or elsewhere, should continue to feel confident in the safety and efficacy of their fish oil supplements. This lawsuit does nothing to change the strong science supporting the many health benefits of fish oil, which range from cardiovascular health to cognitive development of infants and young children, and the very low thresholds of PCBs which apparently trigger a labeling requirement in California cannot be extrapolated to demonstrate any actual risks at those levels. The health benefits for fish oil far outweigh any suggested, and unsupported, risks.” Read the entire statement here.

• Global Organization for EPA and DHA Omega-3 (GOED): In response to a lawsuit being filed against eight dietary supplement brands and retailers, the Global Organization for EPA and DHA Omega-3s (GOED) is reassuring the industry and consumers that fish oils manufactured by its members, and the market in general, meet the highest quality standards available. “We have complete confidence in the safety of the fish oil supplement market, which has been validated through multiple third-party reviews by industry watchdogs on thousands of products,” said Adam Ismail, Executive Director of GOED. “In fact, this industry is among the highest quality and most transparent of all consumer products,” he added.

There are multiple resources in the public domain where consumers can get more information on the quality of their products, including the International Fish Oil Standards program (www.ifosprogram.com). Furthermore, a recent report by Frost & Sullivan found that 93% of the refined fish oils on the market in the United States are produced from anchovy and sardine oils. However, the plaintiffs unfortunately only tested one of these types of oils, which actually had PCB content well within the Safe Harbor provisions of Proposition 65. “While the plaintiffs raise an important issue,” said Ismail, “it is unfortunate that they are implying that most fish oils are unsafe and that the industry is hiding information on such vital nutrients.” Read the entire statement here.

• Greg Grochoski, Twinlab’s chief science officer: “Twinlab’s fish oil products are all molecularly distilled and quality tested for purity. These processes are especially effective for reducing impurities such as PCBs found in oceans, lakes, rivers and streams and common to fish and fish-­‐based products.” Twinlab’s statement went on to say that the company cannot comment on the validity or accuracy of the tests referenced by the plantiffs, though its products were reported as having among the lowest level of impurities.

Related NBJ Links:

Tuna’s Prop 65 Win Could Help Supplement Firms in Their Own Lawsuits

Elite Athletes Eschew Dietary Supplements Over Fears of Contamination

Vitamin D and Omega-3 Fish Oil to be the Focus of New $20 Million Study

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

Despite the start of a gruesome economic downturn, functional food and beverage product development has been on the rise in the United States over the last two years. According to Mintel’s Global New Products Database, 785 foods and beverages with functional claims were launched in the United States in 2008 and 770 came out in 2009—up from 431 in 2007 and 193 in 2006. Although functional products now reside in nearly every product category and hit on a wide range of health conditions, a number of trends have emerged that promise to shape the functional food and beverage market in 2010 and beyond—as Nutrition Business Journal discusses in our recently published 2010 Functional Food and Beverage Issue.

Here’s a recap of some of the top functional food and beverage trends for 2010:

Functional Sweeteners: More Than Just Sweet

In 2009, high fructose corn syrup was out (much to the chagrin of the Corn Refiners Association) and recently GRAS-approved stevia was in for its zero calories and improved sweet taste (thanks to companies such as Cargill and Wisdom Natural Brands). Stevia, which is typically combined with other natural sweeteners such as xylitol, can now be found in everything from zero-calorie natural colas to 100-calorie yogurt snacks. During the first eight months of 2009, Mintel reported that 110 U.S. products made with stevia were launched. DSM Nutrition Products is one company working to capitalize on stevia’s functional health benefits. In 2009, DSM applied for a patent linking stevia to improved brain function and cognitive health. NXT Nutritional’s SUSTA natural sweetener ingredient is already being marketed for its functional health benefits. According to Kimberly Lord Stewart, editorial director of NBJ’s sister publication Functional Ingredients Magazine, “Functional sweeteners are going to be one of the most important product trends to watch in 2010.”

Digestive Health: Here to Stay

Two words describe the U.S. digestive functional food and beverage market: still hot. And these products aren’t just popular in the United States, where Activia spokeswoman Jamie Lee Curtis has made it normal—and fun!—to talk about the woes of irregularity. According to Mintel, digestive health topped all other functional food and beverage health claims in 23 out of the 24 countries tracked by the global research firm. The most common products carrying a digestive health claim are spoonable yogurts, drinking yogurts and cultured milk, tea, cheese, and snacks/cereals/energy bars, Mintel reported.

EFSA Rejections Won’t Kill Probiotics

The ingredient category perhaps most tied to digestive health is probiotics. Although probiotics have taken a hit in Europe—to date, the European Food Safety Authority (EFSA) has rejected every probiotic health claim it has reviewed—consumer and manufacturer interest in these healthy bugs continues to bloom. Technological innovations are enabling the cultivation of “designer” probiotic strains, as well as strains that can remain alive and active during processing. Ganeden Biotech’s patented probiotic strain GanedenBC30 is one showing up in a growing range of functional products, including Red Mango’s nonfat frozen yogurt and ice teas. Ingredient company Danisco announced in January 2010 that it is entering the niche—but growing—probiotic juice category with its probiotic strain HOWARU Bifido (Bifidobacterium lactis HN019). This will compete against Probi’s strain, which can be found in the GoodBelly brand from NextFoods.

Prebiotics: What Every Probiotic Needs

Research continues to demonstrate that probiotics work better when combined with prebiotic fibers, such as fructo-oligosaccharide (FOS), inulin and galacto-oligosaccaride (GOS), said Functional Ingredients Magazine Science Editor Todd Runestad, who added that he believes GOS could be the “big winner in the year ahead.” That’s because food formulators are beginning to formulate with GOS, which also benefits from the fact that companies can make fiber claims for it. One new prebiotic drink is PRE Beverage Co.’s PRE Probiotic Enhancer.

Fiber Bulks Up

Fiber sells—just ask General Mills, which is raking in revenue with its successful Fiber One brand. Today, consumers can find everything from “double fiber” sliced bread from Oroweat to fiber-fortified applesauce cups from Mott’s. The surge in fiber-packed foods was driven, in part, by the 2005 revision of the U.S. food pyramid, which emphasized the need for more fiber in the American diet.

‘Back to Basics’ Mentality Spurs Cleaner Labels

Consumers are embracing a “back to basics” mentality that favors simple, healthy foods and beverages. Companies are hoping to tap into this trend by developing natural lines with clean labels that emphasize the inherent functional benefits of whole food ingredients, such as fruit and whole grains. One example is Hero’s new Fruit2day beverages.

H1N1, Recession-Related Stress Push Immunity Center Stage

“Two years ago it was hard to sell an immune-support ingredient to food and beverage manufacturers,” said David Walsh, vice president of communications at Biothera, which makes the Wellmune ingredient. But that was before the economic meltdown and the H1N1 pandemic—both of which forced people to think more about supporting their immune systems. Wellmune, which has been clinically proven to enhance the immune system and can be consumed daily, is showing up in a growing range of products, including cookies and juices.

Culinary Spices: Tasty and Good For You Too

Cinnamon and turmeric are two culinary spices being studied for their health benefits. “Science is beginning to accumulate on a number of spices,” said Guy Johnson, executive director of the McCormick Science Institute, which is working to increase the scientific understanding of culinary spices. This research is spurring the creation of products such as Vosges Haut-Chocolat’s Naga chocolate bar, which features sweet Indian curry.

Subscribers can read NBJ’s full 2010 Functional Food and Beverage Issue via the NBJ Website. To order a copy or become a subscriber visit the NBJ subscription page.

Related NBJ links:

February 2010: Functional Food and Beverage

U.S. Functional Sales Slow, but Category Outpaces Overall Food Sector in ‘09

SUSTA Aims to Transform the Sweetener Business

Functionally Fortified Products Still Dominate the U.S. Market