DSM VP talks vitamin C pricing, supply chain resiliency, and surging demand for vitamin C, A, D, E, B12, B6, and zinc
“We are seeing extremely high demand for certain ingredients, 50-60% increases in some cases,” Frederic Boned, VP Human Nutrition & Health North America at DSM, told FoodNavigator-USA.
“Some of it is an artificial spike in demand due to consumer stockpiling behavior, but this [COVID-19] is also driving growth across all packaged food and beverage categories such as dairy, juices and cereals as consumption shifts towards the home, which will be sustained for some time [even if not at the levels experienced in the early weeks of the crisis]. It’s more than just the ‘toilet paper effect.’
“Longer term, we don’t know [what demand will be like] but I believe this is going to stay at least until the end of the year,” he predicted.
'We’re seeing extremely high demand for ingredients associated with immunity'
While DSM is seeing growth across the board as consumers have increased purchases of everything from fortified breakfast cereal to fortified plant-based milk, consumers are also actively seeking out supplements and foods with ingredients they associate with immune health, he said, although he cautioned customers to “base any claims on proven evidence and scientific literature.
“Right now we’re seeing extremely high demand for ingredients associated with immunity such as vitamin C, zinc, vitamin A, vitamin D, vitamin B12 and B6, vitamin E, but we also see opportunities around omega-3 fatty acids, which are well-known for [supporting healthy] heart and brain [function] but also have a proven benefit for immunity."
Sales of nutritional supplements "grew more during the pandemic than in the entire previous year,” with growth peaking in the week ending March 15 at +88% and slowing to +21.7% in the week ending April 5, said Kristin Hornberger (IRI principal, healthcare) during a webinar hosted by the Council for Responsible Nutrition and Natural Products Insider on April 17.
Dollar sales of vitamins rose +44% year on year in the six weeks ending April 5, added Hornberger, noting that particular areas of growth within supplements include vitamin C, adult multivitamins, elderberry, children’s multivitamins, vitamin D, melatonin, and zinc.
“Consumers are searching for supplements to not only boost immunity, but reduce severity of symptoms and even manage stress and anxiety.
“Immunity-focused brands such as Emergen-C and Airborne made significant share gains, attracting new buyers and driving stock-up; private label struggled to add new buyers... An influx of new buyers is driving product growth. This is an opportunity for manufacturers to win consumers over for the long-term.”
Self care in focus: Read more HERE
Picture: GettyImages-Tero-Vesalainen
Long-chain omega-3s and immunity
While available scientific evidence does not directly support the use of omega-3s (or any other ingredient for that matter) for the prevention or treatment of COVID-19, says GOED, the global organization for EPA and DHA omega-3, "We know that omega-3s play an important role in the inflammatory process, which has mechanistic relevance for the structure and function of the immune system.
"In addition, there is evidence that [long-chain] omega-3s [ie. EPA and DHA] positively affect the development of the immune system in early life."
GOED also noted that "immunity-related messaging for people with certain conditions or disease-states can be scientifically substantiated; however, whether such messaging is permissible for use would have to be determined by the regulatory framework in different geographies.”
In February, noted Boned at DSM, "an expert panel on nutrition and immunity was convened by DSM to review the scientific data on micronutrients and omega-3 fatty acids in supporting immunity. The panel included academic experts in nutrition and immunity from Europe, the United States, and New Zealand, and included Dr. Phillip Calder, a leading global expert in omega-3 fatty acids.
"The panel concluded that supplementation with specific vitamins, minerals, and the omega-3 fatty acids DHA and EPA is a safe, effective, and low-cost way to support optimal function of the immune system, with the potential to reduce the risk and consequences of infection, including respiratory virus infections. The expert panel wrote a manuscript on their conclusions and the manuscript is in press in a scientific journal."
Growth opportunities: Foodification, plant-based foods and beverages
No one knows what consumers will be thinking in six months' time, said Boned, but self-care is likely to remain high up consumers' priority lists, provided it is affordable, while the ingredients that are trending in supplements are also trending in food & beverage.
“A trend we call the 'foodification' of dietary supplements is something we’ve been following for some time and we see more and more of a blurring of the lines between dietary supplements and food and beverage.
“So we can help our dietary supplement customers that want to go more towards food concepts, but we can also help our food and beverage customers work with more fortified and superfood concepts and I think we’ll see the same ingredients increasingly present across both formats [food & beverage and supplements].”
DSM also expects to see sustained growth opportunities in plant-based dairy and meat alternatives, which present opportunities for fortification with vitamins, minerals, and the long-chain omega-3 fatty acid DHA, said Boned.
“Consumers are looking at the labels of these products very closely and they expect to see vitamins and minerals in there.”
Is innovation on pause at some CPG companies?
Coronavirus is delaying some customers’ R&D projects for practical reasons, said Boned [R&D is tough during a lockdown and resources are being focused on getting existing products out to consumers], “but some also want to step back [and hit pause] and try to understand what the post-COVID reality will be; they want to make sure they are working on the right projects.”
‘Vitamin C prices are starting to pick up in the market significantly’
Asked about market prices of in-demand ingredients, Boned said: “We’re seeing prices of vitamin C starting to pick up in the market significantly in the last two weeks because of the crazy demand and this could last for weeks and months.”
DSM’s supply chain, however, has “proved to be extremely resilient,” he claimed.
“Having different supply chain options in place and diversified manufacturing sites, it carries a cost, but having all your eggs in one basket or one country can be very dangerous if something like this happens, and that’s the way we look at our supply chain.
“For vitamin C, for example, we are the only producer that also manufactures outside of China [from a plant in Dalry, Scotland].”
Vertical integration
He added: “Within NAFTA we’re playing with four different [premix] sites, but most importantly we are really the only supplier today that has almost all vitamins sourced internally, so we are vertically integrated on vitamin C, D, B, A, E, and we have a lot of resilience if problems occur.
"Other premix suppliers would have to find their own ingredients on the market; we produce them.”
On nutritional lipids such as fish oil and algal oil (sources of long-chain omega-3 fatty acids EPA and DHA), he said:
“The need for a reliable, sustainable, and transparent supply chain is becoming even more important. We manage the food supply chain from the fisheries to the finished product,* and for algal EPA and DHA we control that supply chain too."
*DSM does not own fisheries or assets directly associated with fisheries, but says it sources crude oil from a diversified set of fisheries in order to ensure continuous supply and reduce demand on any single fishery.
