Branded Ingredients: Hype vs. Substance

by Suzanne Shelton

Intel Inside® is the holy grail in branding a component of a finished product that makes it more desirable; yet, very few companies achieve that level of success. In the dietary supplements industry, Ester-C® probably came closest; even though the frequent change of ownership over recent years has caused a decline in market share, its still a widely recognized name. There have been some interesting developments in nutritional ingredient branding the last few years, with varying degrees of success.

After years of commoditization of nutritional ingredients, branded ingredients are gaining in popularity and marketing focus. Companies that invested resources in developing patented ingredients, then spent more money and energy protecting their intellectual property, and survived a decade when price trumped quality, have finally seen the tide begin to turn back toward branded ingredients. From private label manufacturers to national consumer brands, putting a branded ingredient logo on the label has become far more common. Even a few private label dietary supplement makers, such as Reliance Private Label Supplements, have put a lot of emphasis in their marketing and sales on the number of branded ingredients they offer in their formulas.

Certain suppliers spend a big chunk of their marketing dollars trying to differentiate their branded ingredients because many retailers and consumers make the assumption that products with branded ingredients are better, and therefore worth the higher prices that come with them. Suppliers that have built their reputations on developing products backed by science and patents, and further invested in marketing the resulting branded ingredients, are seen to have an advantage over mere commodity ingredients in terms of assumptions of safety and efficacy. And, they can charge a premium for that.

A branded ingredient on a finished product label has became shorthand for 1) something is special about the ingredient and/or how it is produced, 2) scientific studies back its safety and efficacy, 3) GRAS (generally recognized as safe) status is approved in the United States, and 4) it likely has clearance to be marketed in other countries as well. All of these components speak to superiority over corresponding no-name ingredients.

But in the last several years, another trend surfaced: some ingredient suppliers that dont have a portfolio of patents and trademarks are branding ingredients that dont actually have anything proprietary about them. Some have come up with names that sounded sort-of-but-not-exactly like branded ingredients with patents and clinical studies behind them. And generally, their prices were higher than commodities, but not as high as their patented counterparts. Clever, right? Anthony Almada, MSc, chief science officer of Scientific Food Solutions (SFS), CEO of Genr8 Inc. and co-founder and past president of EAS, doesnt think so. He commented, Lets say Im the buyer for a marketer of finished goods, and I see 15 different offerings. Only one really has depth, and the rest are just fluff. If Im an experienced buyer, Im going to ask each company for their data and IP. Almada pointed out branded ingredients he characterizes as fluff dont make it on the label, on the website or in the ads. The only place you see these fluff branded ingredients is at trade shows and in trade magazines, because they dont have the substance to make it any further, he said. Anyone who would buy it isnt looking for a substantiated, quality product. Almada said its likely every logo that makes it to the consumer label has something behind it.

While branded ingredients are generally licensed for use in finished products, they can also be used to enhance other ingredientsand their marketing. For example, SFS has a semi-exclusive Patent and Trademark License Agreement with Sabinsa Corp. for field of use in dietary supplements compositions comprised of ascorbic acid and vitamin C, incorporating Sabinsas BioPerine in SFSs vitamin C ingredient FAST-C. That information has prominent placement on the FAST-C website and in the marketing materials.

Establishing a solid branded ingredient is a tremendous commitment, only undertaken when substance is there. BioPerine is a case in point. We strongly believe BioPerine does what Intel does for the computer industryit makes things run better, faster, quicker (i.e., increased absorption), said Shaheen Majeed, Sabinsas marketing director. And because it was worth total commitment, we did everything Intel did, on a smaller scale: trademark, clinicals, patent, dedicated sourcing and manufacturing, and aggressively marketing the brand.

Ultimately, companies through the supply chain that partner to deliver efficacious products with branded ingredients behind them are offering consumers real goods with the power inside.

Suzanne Shelton is an industry consultant and head of The Shelton Group , a boutique public relations firm serving the natural products industry.