Premium, local ingredients with clinical backing poised to grow nutrition industry
15 Nov 2021 --- Premiumization is quickly becoming a growing trend across the nutrition space, with consumers willing to pay more for better quality items, experts from Laboratoria Natury, Dr. Paul Lohmann and Select Botanical tell NutritionInsight.
“Customers right now are not asking for cheap quality raw materials or solutions from India or China, for example. They are looking for something much more sophisticated with proven efficiency but also quality,” says Wojciech Furtak, vice president at Laboratoria Natury.
He observes that people have higher disposable incomes at present, which gives them the flexibility to seek out higher quality items rather than cost-cutting.
As a result, this allows producers to be far more attentive to the raw materials they use and be increasingly selective, Furtak notes.
Consumers are more willing to pay more for higher-quality products.
Spotlight on awareness
Another factor behind this growing trend is increasing awareness over products that consumers are engaging with, notes Dr. Joswin Kattoor, head of business development and marketing at Dr. Paul Lohmann.
“For example, magnesium consumers are more and more aware that there are differences between the anions. There are very cheap magnesium products on the market, and they offer magnesium oxide and magnesium carbonate.”
Consumers are recognizing that more costly forms of magnesium can ultimately benefit them more due to higher bioavailability, Kattoor states.
This increasing awareness is reflected in “Transparency Triumphs,” one the Top Ten Trends for 2021, noted by Innova Market Insights. It highlights that three in five global consumers say they are interested in learning more about where their food comes from and how it is made.
Though the comment refers to food, this is also observed in the nutrition industry, where experts have said clean label is now an industry staple.
Companies expected to deliver more
This development toward premiumization is inherently linked to another trend observed across the industry, in which divisions between pharmaceuticals and nutraceuticals are narrowing.
Across the nutraceutical space, many companies operate in a manner similar to drug companies – carrying out clinical studies even on their own products to prove their efficacy.
“Customers are looking for added value for their products,” Furtak says.
Hence, growing awareness means companies are trying to do more to meet consumer demands for information, he adds.
Growing awareness is shaping several trends across the industry, including sustainable sourcing and more clinical studies.
Standing out from competitors
Premiumization has inevitably also given companies a vote of confidence in the way they carry out their operations.
“We want to grow with our philosophy of producing plant extracts for the pharmaceutical industry and nutraceutical industry but for high-quality customers. We don’t want to get into a fight over prices. We want to go toward quality into the world of sustainability,” highlights Oscar Ruzafa, sales executive at Select Botanical.
With less concern on cost-cutting and more focus on quality, companies are now keener to source their ingredients from the EU and the US due to more stringent regulations.
Tougher rules on how ingredients are sourced and how products are manufactured may cost more but make companies feel confident in the quality of the items they put out on the market, Furtak says.
“This is also something to differentiate from the mass market,” Kattoor states. The market is rife with products with varying levels of quality but having something that can boast superior quality allows some items to stand out more than others, he adds.
Premiumization key to sustainability
As the EU is sprawling with potential for sourcing ingredients, companies are catching on to this and trying to reduce dependency from Asia. With the EU having far more stringent regulations, this adds to companies’ quality seal of approval with superior ingredients, Furtak highlights.
A natural consequence to sourcing from within the continent and not importing items from Asia means the production process becomes more sustainable.
“One of the major trends that I’m quite convinced of is the awareness of sustainability. Consumers are more and more concerned about where their products come from,” Kattoor flags.
All three companies were exhibitors at CPhI Worldwide 2021, where naturality and appealing delivery formats were also in the spotlight.
Premiumization has already been observed in the protein space within the nutrition bar sector.
By Andria Kades
