Natural Products Insider

SEP-OCT 2017

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130 INSIDER September/October 2017 SupplySide West Industry professionals would defi ne clean label in a variety of ways, but they would agree that the clean label movement is proliferating within the food and beverage industry, and its increasing momentum is not without challenges. At Imbibe, we have been able to learn about some of these challenges and how to address them both from keeping tabs on what some of the largest global brands are doing and by the requests our clients make of us. We have been able to learn from Panera, for example, a pioneer in the procurement of clean ingredients, which introduced its "No No" list more than two years ago. They settled on a defi nition of clean food—that which does not contain artifi cial preservatives, sweeteners, fl avors or colors from artifi cial sources. Their ability to procure more than 75 ingredients took their team nearly a decade of research, conversations and document gathering to ensure a clean supply chain. More recently, Caribou Coffee became the fi rst mainstream coffee brand to pledge to have all beverages on its menu made with clean ingredients by 2018. The standard they set excludes artifi cial colors, fl avors, sweeteners, preservatives, monosodium glutamate (MSG) and high-fructose corn syrup (HFCS) from their products. With these mammoth brands setting the pace for supply chains, suppliers are being forced to make big adjustments much faster than has been demanded in the past. Implementing a clean supply chain isn't something that can be achieved quickly because there are many barriers, including regulatory hurdles, cost, lead times and capacity. It is critical to involve the operations/supply chain team every step along the way, since this growing movement is a bit of a moving target, and frequent changes without communication can lead to a breakdown. Regulatory Hurdles The agreed upon defi nition of clean label between a brand owner and a supplier often results in additional paperwork and documentation, especially if the defi nition aligns with some of the most common certifi cations. Obtaining certifi cations for ingredients and fi nished products that are organic or Non-GMO (genetically modifi ed organism) Project verifi ed generally takes additional time. When clean label starts to be the main driver of these certifi cations, however, accepting a supplier's word or documentation showing it's appropriately certifi ed may not be adequate. We are seeing developers and manufacturers going beneath the surface level; in some cases this means traveling to the farm where an ingredient was grown. I recently witnessed a regulatory issue fi rst-hand in a project involving ethyl alcohol. The supplier claimed the ingredient was non-GMO when it was actually GMO-free, a distinction that is essential to understanding proper certifi cation and documentation. Non-GMO applies to ingredients from sources that have not been bioengineered or genetically modifi ed (in the case of ethyl alcohol, this would apply to corn). GMO-free, however, means though the original source was genetically modifi ed, the ingredient went through so much processing that the original genetic material is no longer present in the fi nished product. When we encountered this issue, we had to educate our supplier on this difference and, ultimately, switch to another supplier. The Price of Being Clean Regulatory challenges come with their own cost, which includes investing in a larger team across disciplines. We see companies increasing the hiring of sourcing experts in addition to those skilled in regulatory affairs to minimize the time spent managing relationships with suppliers. Additional investment in R&D scientists is also critical since less experience with clean ingredient alternatives often requires developing more iterations before achieving a product comparable to its original. Cost also plays a role in terms of the actual ingredients. We commonly see several cleaner ingredients replacing a single "blacklisted" ingredient. This may seem counterintuitive, as the cleaner ingredients will contribute to a longer ingredient statement, but many brands are deciding the perception of higher-quality ingredients is worth the cost. These cleaner ingredients generally cost more on their own and, in some cases, a higher quantity must be used to achieve the desired effect. Despite the change and added nuance of developing products with higher quality ingredients and shorter ingredient statements, customer expectations of timing have not changed accordingly. The importance of clearly communicating the operational realities, limitations, costs and affected lead times cannot be stressed enough. Will Lennon, chief op erating offi cer at Imbibe (imbibeinc. com), brings a unique blend of supply chain, fi nance and strategic planning to his team. In this role, he leverages his experience in supply chain management to lead the company's efforts in sourcing, logistics, production and fi nance. Challenges and Strategies for Navigating Clean Label, a Non-Mature Movement by Will Lennon Learn more about clean label supply chain challenges and solutions from Will Lennon during the "Clean Label Strategies and Formulation Considerations" Workshop, underwritten by Cargill, Synergy Flavors and Tate & Lyle, on Tuesday, Sept. 26 at 1:30 p.m. at SupplySide West in Las Vegas. supplysideshow.com Scan Here Clean Label Food & Beverage Formulation at SupplySide West

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