Functional ingredients defy odds

Though he said it more than 20 years ago, former president Ronald Regan's quote: "Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it, and if it stops moving, subsidise it," is as relevant then as is today. Luckily this industry hasn't reached the latter stage in this economy — there will be no bailout for the natural-products industry. But the industry is in the 'regulate it' phase. GMPs are upon us, though not everyone gets it yet — please see our online story, "Can your suppliers kill you?" for more on this.

So if Reagan was right, this industry is still on the move, as you will read in this month's double whammy: the annual Branded Ingredients Guide, and the 2009 Market Overview. It is somewhat ironic that these two topics are in the same issue. Recently we asked manufacturers if they were playing a bait-and-switch game by exchanging out more expensive branded ingredients with generic ingredients during this tough economy. Twenty-one per cent said 'sometimes,' one per cent said 'always,' and a resounding 48 per cent said 'no.' Branded ingredients are still valued in this economy.

If branding is still strong, how is the overall functional-ingredients market fairing? There could be worse industries to be in, according to SPINS, our go-to market-research firm for this year's Market Overview. According to SPINS, certain ingredients are rising to the top. Some are not so surprising — think Vitamin D and açai — but others are old standbys gaining mainstream interest, in part due to novel processing, improvements in taste and greater acceptance from the medical community — think aloe and co-Q10. Mintel reports the industry has grown 48 per cent in the past five years (27 per cent accounting for inflation), and even in this 2009 economy the functional market looks solid.

It is with great pleasure, then, that publisher Mike Roberts and I present this year's Market Overview and annual Branded Ingredients Guide. We look forward to working with you in the coming year.

Functionally Yours,

Kimberly Stewart Editorial Director
kimberly.stewart@penton.com