Nutraceutical roundtable: Standing out crucial as COVID-19 creates crowded market

07 Oct 2020 --- COVID-19 is bolstering demand for nutraceuticals to maintain wellness and ward off mood health difficulties. However, the sector continues to face major challenges in terms of standing out in a saturated market and communicating scientific backing, as told to NutritionInsight by key nutraceutical players.

“Much like ‘clean label’ before it, ‘nutraceutical’ is a term that has taken on layers of meaning over time and now means different things to different people. That’s what is so exciting about the nutraceutical market – it includes supplements and functional foods, but also embraces a broader perspective,” says Stephane Vouche, marketing manager of Lonza Capsules & Health Ingredients.

He adds that the more open-minded we can be about how the term could evolve, the more opportunities there will be to innovate and meet consumer needs more effectively.  

Lonza’s capsules address consumers’ plant-based and clean label demands without compromising on the product experience. 

The desire for wellness solutions is not new. Eleonora Folco, marketing manager of Giellepi’s health science department, points out that consumer attention to balanced diets has intensified over the last decade.

“This has led to an increase in the consumption of food supplements recognized by the consumer as an aid in maintaining a healthy life,” she notes.

COVID-19 makes an impact
However, the current pandemic is giving many nutraceuticals a new saliency. “Impacted by the COVID-19 crisis, nutraceuticals are more than ever considered as a preventive way to maintain health and wellness,” says Julie Imperato, Nexira’s marketing manager.

She observes that immune health is the top claim with products targeting cold, flu, immunity and respiratory tract. Within this, prebiotics are a rising category as a strong link has also been made between immunity and digestive health, she notes. 

Vouche further adds that during these times of a pandemic, a busy life does not necessarily mean physical exertion. Instead, exhaustion is coming from increasingly long hours spent behind LED screens, working, connecting with others and e-sports.

“As such, we have also seen a growing interest in supplement solutions that help with prolonged concentration and cognitive health, as well as for protection from blue light,” he notes. 

For Folco, the pandemic creates the need for greater sensitivity and attention toward consumers, as well as nutraceutical companies. 

“We have seen the areas of immunity, vitamins, stress and sleep growing very consistently, and the products in these categories will certainly take over others, significantly changing the general picture of this market.”

A crowded market
The flipside of these newfound opportunities in the nutraceuticals sector is an increasingly crowded market, with Folco noting the difficulties in Italy. 

“With over 2,000 commercial companies and 42,000 products, the Italian food supplement market is a mature and overcrowded market. The real challenge for companies is being innovative, distinct and recognizable,” she explains. 

It is difficult to develop new finished products when they must be different due to the proliferation of “me-too” products on the market, Folco details. This is when competitors create similar products in order to gain a slice of the market share. 

Scientific backing
Another important consideration for nutraceutical companies is ensuring that products have scientific backing as consumers are increasingly informed.

“Today’s consumers have done their research, and they know their personal health priorities. Safety, transparency and quality are now more top-of-mind than ever, which has driven demand for plant-based, clean label solutions that are science-backed, efficacious and responsibly made,” says Vouche.

Giellepi prioritizes research, with its clinical and preclinical studies providing scientific evidence to support the reliability and effectiveness of its ingredients. 

“The distinctive aspect of scientific evidence is that it will pay off in the long run. This real question to ask is who will survive in a severe crisis where it is necessary to invest so much money to be different and successful,” Folco ponders. 

Nexira places a major emphasis on scientific backing for its health claims. 

Imperato emphasizes that all of Nexira’s ingredients must be supported by science. “We have to prove the health benefits. As we came from the supplement industry, I think it is one of our strengths because we are used to carrying out scientific studies, from in vitro to clinical studies.”

Addressing other challenges, Imperato also notes that regulatory status is also important. Interestingly, some ingredients are allowed to be used in supplements but not in food. 

Naturality reigns
A major theme throughout the nutraceuticals industry is the demand for organic and sustainable products, says Imperato. “A clear need for transparency on the sourcing and supply chain also drives the market demand.”

She notes that claims like additive-free, non-GMO, allergen-free and clean label are ranked at the top of certifications. 

“The next era of on-pack claims could be labeling about environmental impact. According to Innova Market Insights’ database, on-pack mentions of the environment have increased by 20 percent between 2018 and 2019,” Imperato explains. 

She speculates that rising awareness on this topic will probably drive to a “carbon score” on the label. Notably, Innova Market Insights’ top packaging trend for 2020 is “The Language of Environmental Sustainability.”

Despite these new considerations, consumers should not have to compromise on the product experience, argues Vouche. 

“They know that more ‘plant-based’ or ‘clean label’ shouldn’t have to mean less convenient, less enjoyable or less efficacious. The challenge for the food supplements industry is to deliver from start to finish – starting with the ingredient right through to the dosage form,” he explains. 

Addressing different consumer needs
With nutraceuticals encompassing such a large part of the nutrition industry, the consumer concerns they can address are near limitless. 

For example, there is increased demand for convenient supplement solutions that support beauty-from-within, empowering consumers to look good as they live and feel better. “In the current climate, investing in looking good can provide a morale boost and welcome distraction from the strains of daily life,” says Vouche.

Meanwhile, for aging consumers, staying mobile continues to be a key priority. “What’s more, people across diverse demographics are beginning to embrace an active lifestyle, whatever that might mean to them – getting a little fitter, achieving peak athletic performance or maintaining strength and flexibility over time,” he continues. 

Personalization is also having a notable impact, with nutraceuticals now having to conform to consumers’ requirements, which might include keto, paleo or vegan diets. Imperato notes that low-FODMAP is also a rising certification among people with gut sensitivities. 

Looking back at a decade of growth
Reflecting on the past decade, Folco notes that the growth of the supplement sector is due to a loss in pharmacy sales caused by a decline in profits from the drugs.

“Thus, the need for a business alternative was born in a world that was increasingly attentive to health and wanted to improve quality and life expectancy in a broader sense.”

In this context, the dietary supplement has found a “perfect place” helping the pharmacy business while responding to consumer demand, she says. 

Over the last ten years, Vouche has seen the industry shift its focus more closely to the needs of the consumer, which have become priorities in terms of innovation and product development.

“Ten years ago, the clean label movement was in its infancy. Now, changing consumer values have ensured that clean label thinking is intrinsic not only to success but also to growth and evolution,” he notes. 

The future outlook
Looking into 2021 and beyond, Vouche expects that consumer values will continue to shape the nutraceuticals industry.

“Innovation will be a growth driver in the food supplement market. Innovation means both the new launches, rebranding, and new packaging of existing products. However, we must not forget the scientific evidence that will increasingly become a fundamental and distinctive factor of many food supplements,” adds Folco. 

Companies will have to focus on their capacity for innovation, which will use a more structural and advanced approach to create customized solutions, she concludes.

By Katherine Durrell