Dispatches from Vitafoods Europe 2015

Consensus: For quality manufacturers, NYAG is little more than irritating blip

By Hank Schultz

- Last updated on GMT

Nutrex Hawaii offers finished products based on spirulina and astaxanthin produced in the company’s open ponds on the Kona coast of Hawaii’s Big Island
Nutrex Hawaii offers finished products based on spirulina and astaxanthin produced in the company’s open ponds on the Kona coast of Hawaii’s Big Island

Related tags Manufacturing

As the dust settles in the NYAG affair, the new contours of the industry start to become apparent through the thinning murk. And the message from industry seems to be that those are mole hills, not mountains.

Brand managers and industry experts contacted by NutraIngredients-USA at the Vitafoods Europe trade show in Geneva, Switzerland this week said that for all the hubbub in the  press about the fallout from the actions taken by New York Attorney General Eric Schneiderman, there has been relatively little impact on sales. A new spotlight continues to shine on the industry and may do so for a while, but that’s not necessarily a bad thing.

“For companies that are doing the right thing, additional scrutiny isn’t unwelcome,”​ said Traci Kantowski, media relations manager for Hawaii-based algae producer Cyanotech’s finished products brand Nutrex Hawaii. Cyanotech is the process of changing from being primarily an ingredient supplier to becoming a vertically integrated finished products company and so has a unique perspective on the new (perhaps exagerrated?) pressures the industry finds itself under.

“We’re more in the natural channel where most of our distribution is. That’s been a little more insulated,”​ said Jim Lundeen, vice president of the retail sales unit.

“We’ve been watching it, but I go back to when the headlines said vitamin E was bad.  These things come and go,”​ he said.

Grant Ferrier, of Nutrition Capital Network, has a view of the industry from the investment end.  NCN ran an investor meeting on Monday in conjunction with Vitafoods that Ferrier said was as well attended as any that the group has done.

“The big companies, like Pfizer or Bayer that have significant investments in health, they are not pulling their money out. It might have a little bit of an effect on the investmet interest at the margins. But the fundamentals of the industry are still very good. The bulk of the sales come from the hard core of committed consumers, and they aren’t changing their habits over one or two things they read in the media,”​  Ferrier said.

Vertical integration a plus

Being vertically integrated has been a boon for Nutrex Hawaii. The company offers finished products based on spirulina and astaxanthin produced in the company’s open ponds on the Kona coast of Hawaii’s Big Island.

“We stress the purity of our farm, how we follow GMPs,”​ Lundeen said. “One of the big ways we get that quality message across is we do a lot of in-store demos and talk to consumers one-on-one.”

Vertical integration is another part of the quality message for iconic supplements brand Nature’s Sunshine.  The company manufacturers all of the wide range of supplements it sells. The company is further insulated from any potential fallout from being mostly in the network marketing channel.

“We manufacture and test all of our products in house.  It (the NYAG affair) has been nothing but a positive for us with our quality.  We qualify all of our vendors and monitor the process all the way from raw materials right through to finished goods,”​ said Eric Graves, international marketing director for Nature’s Sunshine.

“When our distributors come and tour our plant they see that quality and can tell that story to their customers,” ​he said.

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