Products designed to improve health and well-being have created a healthy, diverse, yet complex niche of the labeling industry.
By Steve Katz
A nutraceutical’s function runs the gamut. There are products formulated to lower cholesteral, trim one’s waistline, clear up acne, sharpen memory, strengthen the immune system, build muscle, increase energy, and even enhance sexual performance. There are a lot of players, and just as the product range is extremely broad, so are the promotional, packaging and labeling strategies manufacturers and converters use to entice consumers.
An ambiguous business
A nutraceutical’s label takes on the same goals as the labels for food and beverages, as well as pharmaceuticals. In these markets, the label serves two purposes – enticing the consumer via pictures and words, as well as providing information regarding directions and ingredients. Nutraceutical labels serve these purposes while keeping within the legal guidelines set forth by the government regulatory agencies, such as Food and Drug Administration (FDA) in the United States. This can sometimes be difficult.
According to Brian Lockwood, author of Nutraceuticals: A Guide for Healthcare Professionals, “It is often thought that nutraceuticals have to occupy a narrow strip of legislative ground between pharmaceuticals and food, but in reality their position is much more complex.” Lockwood points out the confusing, vague nature of nutraceutical classification. “Many nutraceuticals are derived from plants or foods, and marketing usually follows legal status, medicines and non-medicines being clearly separate. Public perception may involve little distinction between any of these entities, except when legal status affects availability. Most people are guided by the marketing: nutraceuticals usually appear to be packaged and labeled as if they were medicines,” Lockwood writes, adding that companies marketing nutraceuticals cannot advertise specific medical claims for their products without a medical license. “When launching a new product they have the option of either not doing any research at all or researching it thoroughly and possibly obtaining a patent… To bring a medicine to market can take about 10 years and cost US$0.8-1.7 billion, but to market an unlicensed nutraceutical can take a fraction of this time and money.” With that in mind, it makes sense to learn that most nutraceuticals “are openly on sale and available via the internet,” according to Lockwood.
Without much red tape preventing products from reaching the marketplace, there is a correlating trend. Peter Renton, director of business development, Lightning Labels, Denver, CO, USA, says, “One of the trends we’re seeing today is more startups entering the field. I think some people view it as a ‘get-rich-quick’ scheme. With the economy the way it is, we’re see a number of small one-off orders, where people are trying to get something going but aren’t able to follow through for whatever reason.”
Renton talks about the different types of nutraceuticals players Lightning Labels works with. “We have a number of nutraceutical customers who, despite the economic environment we are in, are simply not that concerned with price. They need their labels in a hurry, and they want to be able to change their designs very quickly. Overall, we see two kinds of companies in this industry these days. There are the reputable players who have a long history and order regularly, and then there are those people who are in it to make a quick buck. I think there are more of these ‘fly-by-night’ people now than there have been in the past. We absolutely insist on payment up front before we even start working on an order, because it is so easy to get burned.”
A nutraceutical label from Overnight Labels
Earl also points to distinct trends he’s picked up on among Overnight’s nutraceuticals customers. “The first is sampling. Many of our clients are trying to attract new business through sampling. We print packets on flexible packaging material, which allows our clients to have samples packed by a co-packer. Then, when they go to a trade show or a retail store, they hand out packets that are printed exactly like the label on their bottle. It helps connect the consumer with their product.
“We are also seeing many of our clients migrate to shrink sleeves. It allows a client to use more of the bottle to sell their product due to the 360° capability of a shrink sleeve label. Since the FDA is requiring more information all the time, the sleeve frees up room for the additional requirements and more graphics. Additionally, the sleeve can be used in lieu of a safety seal around the cap, thereby saving an operation in the bottling process. Since our company will do as few as 5,000 sleeves, the cost is not as prohibitive as using one of our larger competitors,” Earl says.
Related to an increase in shrink applications is the trend of certain nutraceuticals products moving from solid to liquid form. “Many of our customers that supply vitamins are also starting to supply them in liquid form. Our clients are incorporating specific vitamins into energy drinks and smoothies, and most of these clients are using shrink sleeves on their bottles instead of a traditional pressure sensitive label.
“The third trend we’re seeing is in ‘buy one get one free’ or in cross marketing promotions. The difficult economic times have pushed our customers into using shrink sleeves to offer special discounts to consumers or to cross market new products with existing ones. This tactic is helping many of our clients clear out their existing inventory and open up their cash flow,” Earl says.
Peter Renton points out that there are a variety of constructions and label types Lightning Labels are producing. “We do a lot of muscle building and protein products, herbal products, dietary supplements, male and female ‘enhancement’ products, and botanical extracts (such as echinacea, algae, etc.) The types of labels run the gamut but the majority are using our standard white BOPP material. We have some people using chrome material to try and stand out. Most of these labels are designed to a ‘formula’ – supplement facts on the right side, a graphic, logo and product name in the middle, and on the left an explanation of the product’s benefits,” Renton says, adding that it’s here where the very small type can be printed.
Lightning Labels is an all-digital printer. With a lot of type often being necessary in making nutraceutical labels compliant, Renton points out the advantages of going digital in this niche. “The big advantage of digital is the ability to change the label design quickly and easily. These labels typically have a lot of text and having them printed digitally allows for easy and inexpensive changes. We are often doing a rerun of labels that were just printed a month ago, where the customer has changed a word or two. One other advantage of digital is the print quality. I am really referring to the HP Indigo technology here. We just printed a label last week that had white four-point text reversing out of a dark four-color process background. Try doing that with flexo. You need the precision of the HP Indigo technology where registration and trapping is not an issue. But I would not want to print these labels on some of the inkjet printers on the market, their print quality for very small text is simply not good enough yet,” Renton says.
Chris Freddo, vice president of New York Label and Box Works, Islandia, NY, USA, notices an increase in expanded content labeling among the company’s nutraceuticals customers. “Resealable labels is a big trend with nutraceuticals. Because there are so many requirements for these products, either the labels have to be larger or the logos smaller. Our resealable labels is a way of accommodating all of the information. This is definitely the biggest trend I’ve seen in the nutraceuticals market,” he says.
Design, style, symbols and sustainability
So, it seems shrink is in. Zola Brazilian Supplements, San Francisco, CA, USA, is a manufacturer of functional beverages; its products are adorned with shrink sleeve labels not only for aesthetic reasons, but for function as well. “We use shrink sleeve labels to give our bottles a high end look and feel. The high quality color printing supports our desire to communicate the authenticity of our drinks as well as the nutritional benefits they provide our customers. The labels also offer protection from light which can cause damage to certain nutrients over time,” says Kristin Van Sickle, director of marketing for Zola.
Zola Brazilian Supplements’ shrink sleeve labels
Nutraceuticals consumers are often proponents of improving one’s health and well-being via the use of natural products. Herbal remedies, plant extractions, and a host of “functional foods” are all examples nutraceuticals. It seems that many of these consumers, and the retailers that provide nutraceuticals are also environmentally conscious, and sustainable packaging is a driver in this market segment.
Theresa Anderson, president of Organico, a health food grocery and café in Ramsey, NJ, USA, says that environmental concerns are a factor when selecting products to stock her store’s shelves with. “To me, as a retailer, I try and purchase products that take sustainability into account. I choose products from companies that are using environmentally friendly materials, including the container and the label.”
Purchasing isn’t the only area where a retailer can provide insight. Anderson also talks about what she’s observed as a branding trend, and how it gets incorporated into how she presents products to her customers. She says that when stocking shelves, Organico uses a strategy called “blocking.” She explains: “Some manufacturers have a variety of products that all use the same color scheme, and we’ll place all of those same-colored products next to each other on the shelf, creating a ‘block’ of the same color. These products can be very confusing to consumers, and I think this helps in eliminating some of that confusion,” she says, adding that products with a shiny, glossy appeal make a nice presentation, so long as it maintains a “natural” look.
According to Anderson, the success of a nutraceutical product comes down to the product itself. However, she feels that there are some products that move more than others, and it’s due in part to an effective label.
Shahana Jahangir, product analyst for Nerac, a research and advisory firm headquartered in Tolland, CT, USA, provides insight into the world of nutraceuticals labeling that both converters and end users alike can benefit from. “Packaging plays a great role in a consumer’s decision to buy a food product for many reasons, but especially health. There are several aspects of a label that come into play including branding, graphics, and whether or not the packaging is biodegradeable,” she says.
Jahangir discusses specific examples of some of the attributes of an effective nutraceuticals label, and the key role that symbolism plays. She says that a company’s logo, the colors, and the various symbols used are instrumental in creating an effective label. In addition, the label’s design should appeal to the target demographic. For example, dietary and muscle building supplements should be gender specific. Janaghir stresses the importance of incorporating these concepts in a label should not be overlooked. She recently attended SIAL Montreal 2009, a food industry tradeshow where nutraceuticals labeling was a specific focus, and the various logos, symbols, and colors of a label were discussed.
According to Jahanghir, as discussed at SIAL Montreal, some of the common symbols and their meanings include:
•A vegetable logo or vegetation reflects health.
•Berries denote that antioxidants are present.
•A sun represents hope or energy.
•People and animals show strength.
•A heart shape reflects cardiovascular benefits.
•Medical symbols such as the “plus sign” are symbolic of protection or the brain.
•Nature scenes represent life and vitality.
•Colors have a variety of meanings. Red is vitality, love and passion. Brown is for men, while pink is for women. Light blue denotes peace and comfort.
Interhealth Nutraceuticals, Benicia, CA, USA, a manufacturer of nutritional ingredients, makes for an insightful resource when trying to determine which branding and labeling methodologies most effectively sell nutraceuticals.
“While packaging is usually what initially attracts consumers, label content is what educates consumers about a product’s benefits and is what ultimately convinces them to purchase a product. An effective nutraceutical label is clean, in that it provides key information necessary for a consumer to make a quick purchase decision. The front or primary display panel is often the best place to make unique and attention-grabbing claims, but manufacturers need to be careful not to overstate product benefits,” says CEO Paul Dijkstra. “A crowded label may be too confusing or seem unrealistic. Clear and effective communication is important in the creation of effective nutraceutical labels.”
Dijkstra says that in addition to providing a clear, attractive space, a label should communicate a concise but informative message designed to make the consumer feel comfortable with the product. A way of doing this, he suggests, is to refrain from being too scientific, and to make sure that only reasonable results are promised. The message should also be positive, include specific, value-added information while appealing to the target demographic.
According to Dijkstra, branding is a major component of an effective nutraceutical label. “Branding plays a key role in labeling and packaging in that it adds value by providing consumers with instantly recognizable cues to help with the purchase decision making process. It allows them to easily search for further information about particular ingredients. For instance, proprietary branded ingredients have the ability to add value to a product and are recognized symbols of quality for many consumers. Offering value-added branded ingredients is a way to set your company apart from the others,” he says.
Dijkstra notices a clear trend toward an increase in branding, particularly among private label or store brands. “I would definitely say branding will continue as a way to differentiate oneself in the marketplace. Manufacturers are willing to pay for quality and the visibility a branded ingredient delivers. Branded ingredients are often supported by years of science – a powerful tool in promoting a product. In addition, we will see an increase in displaying a specific branded ingredient on the front of a package. Another trend we are seeing is innovative package design with exciting graphics and bold colors, unusually shaped bottles as well as a lot of other ideas that help products stand out on the shelves,” he says.
Nutricap Labs, Farmingdale, NY, USA, is a particularly insightful resource on nutraceuticals labeling in that it’s a full-service nutraceuticals manufacturer, and maintains it’s own in-house labeling and packaging department. The company manufactures capsules, liquids, creams and powders, while providing an array of packaging capabilities including label design and its own on-site flexographic label printing department.
Jason Provenzano, executive VP, emphasizes the importance of branding, but says that it’s a real balancing act. “For customers who are just entering the nutraceuticals industry, company branding is secondary to product branding. Our decade-long experience has taught us that your company name is only as good as the product inside the package, and strategically speaking, it’s more effective to build a customer base around a product, not a company. Client’s who have established themselves should focus on retention-based company branding, which is inherently superior for getting a customer to try other products in the line,” he says.
Provenzano says that in the labeling of nutraceuticals, often times space is at a premium, and agrees that logos and pictures are effective tools. “Label real estate is precious; we have found that icons are an effective way to communicate product benefits and credentials using a small amount of space. A picture can communicate a thousands words and this is advantageous when space is tight,” he says, adding, that in terms of actual design, he’s noticed “a move towards a more medicinal and natural look rather than the flashy bodybuilding style that was popular a few years ago.
“We are also finding that our clients are leaning towards eco-friendly packaging solutions to show they are environmentally responsible by developing labels with uncoated stocks and inks.”
Converter Chris Freddo also sees his nutraceuticals customers, in particular, looking to go green, and says his company’s expanded content labels “is kind of an indirect form of sustainable packaging.” He explains: “Our resealable labels create a situation where customers are able to do away with their product’s cartons, and we’re seeing a lot of nutraceuticals companies looking to promote their minimized packaging.”
The nutraceuticals niche of the labeling industry has become a reliable one for certain converters, but some may question its growth potential, particularly in the wake of the current economic downturn. So, all things considered, is it a growth market?
“Yes, absolutely. Nutraceuticals are growing rapidly,” says Shahana Jahanghir of Nerac. “The nutraceuticals market experienced unprecedented growth after the passage of the Dietary Supplement Health and Education Act in 1994. In the US, the market’s growth is somewhat recent, but in Japan and in Europe, it has been existing for many years. It is interesting that the consumers are willing to pay for more for nutraceuticals rather than food itself.”
Jahanghir refers to the Dietary Supplement Health and Education Act (DSHEA) of 1994. The passage of this legislation in the US has proven to be a major catalyst for the growth of the US nutraceuticals market.
Paul Dijkstra discusses the impact DSHEA has had on the market: “DSHEA gives the FDA primary jurisdiction over the labeling of dietary supplements. It allows dietary supplement labels to provide consumers with helpful information in the form of “structure/function claims.” These types of claims describe how the product may affect the structure or function of the body or general well being. DSHEA requires that manufacturers have substantiation that these label claims are truthful and not misleading. The FDA looks for reliable scientific evidence – well-controlled clinical studies showing a significant effect. Since the manufacturer is responsible for ensuring the accuracy and truthfulness of these claims; the law requires that the labels include a disclaimer stating that the FDA has not evaluated the claims.”
In short, nutraceutical products can exist without having to conduct clinical trials. The “structure/function” claims required by DSHEA, can be as vague as “Vitamin A promotes good vision,” or “St. Johns wort maintains emotional well being,” so long as there’s a disclaimer printed on the label that explains that the product has not been evaluated by the FDA, and it is not intended to diagnose, treat, cure or prevent disease.
While legislation regarding nutraceuticals has opened the door, allowing for growth as well as the emergence of numerous start-up companies, it remains to be seen how the current economic downturn will effect the industry.
Paul Dijkstra feels that today’s economy could impact dietary supplement formulation and marketing in the coming year. He says, “In times of economic challenges some manufacturers may lean toward replacing premium ingredients with generic ones in their supplement formulations. Some may opt to restrict marketing campaigns and advertising to control costs. However, some market research analysts have indicated that consumers tend to pay greater attention to their health in times of economic woes. The mantra is from treatment to prevention – consumers do everything they can to stay healthy to avoid costly doctor visits or medication. They consider taking supplements and consuming functional foods and beverages a better preventative choice. This would make it even more important for manufacturers to make sure they maintain high product standards and continue to communicate to consumers the benefits of their products.”
Jason Provenzano of Nutricap Labs also thinks that the economy’s struggles could have a positive impact on growth. “The nutraceuticals industry is stronger than it’s ever been before, growing nearly 8 percent in the fourth quarter of 2008. Unfortunately, as more people lose their jobs they’re also losing their health insurance. Therefore, in an effort to avoid expensive doctor visits, people are stocking up on vitamins and supplements. This has led to a concept that The New York Times recently described as ‘consumer-directed health care’ – the idea that people will take more preventative measures if their insurance deductibles are set higher. Even after the economy begins to rebound, we’re confident that consumers will still make vitamins and supplements a part of their daily regimen,” he says.
A characteristic of the nutraceuticals industry involves the continual emergence of new ingredients that capture the attention of the health-conscious consumer. “Trends are always changing,” Provenzano says. “Today’s unknown product is tomorrow’s next big thing. The acai berry is a perfect example. Fifty years ago, no one had ever heard of acai or its nutritional benefits; today it’s one of the most sought after dietary supplements in the world.”
Innovations in technology and communication also play a part in the market’s growth. “One outlet we’ve found that is already contributing to the growth of the nutraceuticals industry is online social media outlets such as Twitter, Blogger, Facebook and YouTube. These forums and blogs enable people from all over the world to communicate their thoughts about products, as well as the results they achieved from using certain products,” Provenzano says.
From a label converter’s perspective, having versatile capabilities is an important feature for those that want to capitalize on the potential of the nutraceuticals market. Don Earl of Overnight Labels says, “We’ve done well in the marketplace because we have an extremely broad offering. We print shrink sleeves, flexible packaging, and traditional pressure sensitive labels while focusing on quality and customer care. Because of our capability and willingness to embrace new technology, we have created a niche in this industry, and it’s one that has not always existed.”