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State of the Industry, Redux
 

State of the Industry, Redux

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Presentation for NBJ Summit.

Presentation for NBJ Summit.
Dana Point, Calif.
July 2013.

Cake Attack: http://vimeo.com/64425567

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  • This is a conversation we’re having. Remember last year? One image that symbolized the future direction of this industry as it sometimes synchs & sometimes clangs with consumer zeitgeist? Here’s an update. Whole Foods in Brooklyn // 20,000 sq ft rooftop greenhouse for super local sourcing Beacon Food Forest in Seattle // 7 acres of free foraging & permaculture, self-sustaining ecology Does the supplement industry fit into this spirit? Can it?
  • Nutrition is $137 billion industry on +9.2% growth – wow Let’s look at the major categories as we track them at NBJ Supplements had a strong year The state of the industry? Charged. Evolving into a new chapter full of opportunity but equally as fraught with peril.
  • I look at this & see last year & think the industry is maturing Protein still driving category growth, as are results you can see & feel Weakness in fish oil countered by strength in probiotics Herbs & botanicals still the wildcard for me – wouldn’t be surprised to see a pop there some year soon
  • Speaking of peril … the media Who knows this guy? Dr Paul Offit, conventional MD at Children’s Hospital in Philly, inventor of rotovirus vaccine Maybe you’ve seen his book – from the flap: “ megavitamins increase the risk of cancer & heart disease” “ supplements have caused uncontrolled bleeding, heart failure, hallucinations, arrhythmias, seizures, coma & death” & if you think that’s bad, look at his book across the pond This is an industry people love to hate … and the hatred seems even more hate-y of late If it’s not DSHEA, it’s a marketing challenge & marketing remains immature in this space
  • The great search for the next fish oil continues, espcially now that o3s cause prostate cancer Brain opportunity is near term with boomers & long term with mood. We’re getting unhappier & supplements seem a great proposition here for mild improvement Gut redux, on the heels of Human Microbiome Project, the birth of superorganism theory – 10:1, microbes to human cells American Gut crowdsourcing a more nuanced gut portrait than NIH – mostly med students at release
  • Lowest of the group but 7% growth still
  • Functional is all about beverages & energy drives that space & energy is in disarray Snacks make sense – a comfortable bridge along the path of healthier consumer products
  • Functional is redefining itself along more natural terms What was conventional fare with an added health ingredient is now healthy from the start, all about nutrient density Look at the proliferation of HPP juices – raw food in a bottle for $7 per
  • Green biotech is quietly gaining steam even as engineering raising eyebrows in amog more educated consumers Beyond Meat, plant-based protein with a friendly approach to branding Pronutria, closed-loop, circular production of protein & essential nutrients at low cost by tweaking with photosynthesis DSM and Monsanto working to commercialize SDA o3 in soybeans – early documents from Monsanto to FDA for GRAS status have the oil going into most every packaged fare
  • But consumer might be wary N&o growth just gets faster
  • And it’s pervasive One category missed doube digit growth. Breads & grains only grew 9%
  • Part of this story is a flight to safety GMO both energizes the category & complicates it as it steals some of the thunder Egg on my face from calling Prop 37 but I was just futurecasting  Labeling now active in 20+ states with new momentum at national level
  • Though people don’t like to say it, there is a fear-based shift to cleaner products underway Read Burke quote Seems we are approaching that kind of tipping point Netting a tree in Oregon where 50K bees dropped dead in a Target parking lot from exposure to a pesticide known as Safari – “a super-systemic insecticide with quick uptake and knockdown” In Pratna India, 23 children died – some in just a few hours -- after eating tainted rice in a free school lunch – organophosphate pesticide is the primary suspect – said a cook who lost two of her own children: “It's not a case of food poisoning. It's a case of poison in food in a large quantity, going by the instant deaths” You have to wonder why the outrage to events like these doesn’t persist, but then look at the two faces looking into the camera & you see it clear as day
  • Similar growth in household products & personal care
  • Steady growth – still strong in skin care, hair care, pets
  • Big business responding – deft move by J&J to address the zeitgeist J&J says chemicals are safe but consumers want out By 2015, bye bye 1,4 dioxane, formaldehyde as released by quaternium-15, triclosan, phthalates, parabens, as well as fragrance ingredients Useful model here for GM ingredients in the supplement supply chain
  • Here’s another useful model, on an advertising front Brace yourselves … it gets a little loud First class advertising in the space – on trend but still fun, not pedantic, youthful – where is this for supplements?
  • Here’s my parting image for this year. This is Ron Finley in Los Angeles // 1.5 million views for TED talk & edible parkways He plants vegetable gardens in South Central LA -- in abandoned lots, traffic medians, along the curbs -- to feed a poor, sick community drowning in fast food. “the drive-thrus are killing more people than the drive-bys.“ I would suggest that the bogeymen for the industry are not only creeping regulators, activist investors, press skepticism, rogue actors, or consolidation … I would suggest its actually a form of irrelevance. The zeitgeist is pushing us toward rooftop greenhouses, free food in parks, social changes away from industry, efficiency & big business. What if we actually learn to eat well? Free advice: Act more like Ron Finley. Rediscover that renegade vibe this industry had back in the day before it became such big business. Many in this room might look at Ron Finley & think, yea, that’s me, that’s why I got into this business. You’re not Ron Finley, but maybe you could be again. MISS – Opportunity.
  • Thank you for listening.

State of the Industry, Redux State of the Industry, Redux Presentation Transcript

  • SUPPLEMENTS $32.5 BILLION +7.5% FUNCTIONAL NATURAL & ORGANIC NATURAL LIVING +6.9% +12.1% +10.4%
  • newhope360.com/newhope360.com/ Meal Replacements 10%
  • newhope360.com/newhope360.com/ MEGA MARKETS
  • FUNCTIONAL $43.9 BILLION +6.9% SUPPLEMENTS NATURAL & ORGANIC NATURAL LIVING +7.5% +12.1% +10.4%
  • newhope360.com/newhope360.com/ Meal Replacements 10%
  • NATURAL & ORGANIC $47.9 BILLION +12.1% SUPPLEMENTS FUNCTIONAL NATURAL LIVING +7.5% +6.9% +10.4%
  • newhope360.com/newhope360.com/ Meal Replacements 10%
  • WE CONTINUE TO BATTLE TO COMMUNICATE THE REALITY OF OUR PRODUCT, BUT RESPONSIBLE PEOPLE CONTINUE TO MISREPRESENT THE FACTS. IT’S BEEN A DREADFUL EXPERIENCE. — DR. RON STOTISH, AQUABOUNTY “
  • IF WE HAD SOME SERIOUS OUTBREAK OF FOOD-BORNE ILLNESS RELATED TO HOW THAT FOOD WAS GROWN & PROCESSED, I THINK THAT WOULD DRIVE A LOT OF PEOPLE TO ORGANIC. I HATE TO SAY THAT. I’D RATHER SAY THE VIRTUES OF ORGANIC WIN PEOPLE OVER THROUGH SWEET REASON BUT THE REALITY IS THAT IT’S MORE LIKELY TO BE FEAR. — BOB BURKE, NATURAL PRODUCTS CONSULTING “
  • NATURAL LIVING $13.1 BILLION +10.4% SUPPLEMENTS FUNCTIONAL NATURAL & ORGANIC +7.5% +6.9% +12.1%
  • newhope360.com/newhope360.com/ Meal Replacements 10%
  • [ CHIPOTLE VIDEO ] CAKE ATTACK
  • MARC BRUSH // @allmybrush STATE OF THE INDUSTRY