Foreword to Spring 2011 Issue

A Sense of Proportion

The world is a challenging place at the moment. Although visitors to Vitafoods are rightly focused on the product, pricing, regulatory and marketing problems and opportunities of their industries, the bigger picture matters to us too.

The widespread unrest in the Middle East with ‘people- power’ is changing long-standing political and strategic landscapes. Unrest in Tunisia and Egypt has led to changes of government and a coalition of nations has launched air attacks on military targets in Libya. Japan is still reeling from the tragedy of the recent earthquake, the resulting tsunami and desperate attempts to control damaged nuclear facilities at Fukishima. All this, while the global economy remains fragile (if not downright depressed) following the banking and financial crises of 2008/2009. Global markets, equities and currencies are volatile as traders and governments try to map a way forward out of the confusion.

In its own small way, the food industry reflects this crux. The rapidly rising price of staple food has been blamed for triggering much of the unrest in the Middle East and raising tensions elsewhere. Increased commodity, processing and packaging costs (due to rising oil prices) are impacting prices globally with the World Bank quoting a 15% increase in food prices in the four months between October 2010 and January 2011. In the UK, food price inflation is running at a reported 6.3% and in the USA, Feeding America reported a 46% increase in the number of people in the USA needing their assistance. Record numbers of floods, typhoons and unseasonal heat-waves, whether the result of global warming or some other factor, are impacting on the size and quality of agricultural crops and reducing the availability of good farmland. And all this at a time when scientists and agronomists are trying to find ways of meeting the challenge of feeding a rising world population which will reach 7 billion this year, up from 5 billion 20 years ago.

With disposable income likely to fall over the next 2 or 3 years, consumers will question every expenditure. Can the cost of dietary supplements and/or the additional premium of dietary supplements or functional foods be justified when staple ingredients need to be bought and the family needs to be fed?

Industry growth plans will have to address this fundamental question by investing in good marketing. Marketing that keeps the consumer interested, informed and persuaded of the benefits and value of its products, even when budgets are tight. But here’s another problem: just as consumer budgets are likely to be at their tightest, the strictures and limitations of EFSA’s rulings will begin to apply.

Our industry’s problems are trivial in comparison to much of what is happening in the world today. But for dietary supplement and functional foods manufacturers, and their customers, the storm clouds developing over Palma (where EFSA is based) still threaten to do serious damage. Only
by working constructively and creatively will we be able to navigate our way to a healthy and profitable future.

Henry Dixon
Commercial Director, Barrett Dixon Bell