Amid growing awareness of food perils, companies that spotlight where ingredients originate are enjoying new demand
Earlier this year, Swiss ingredient maker DSM Nutritional Products launched a “premium” Vitamin C. The marketing gambit: It comes from tidy Scotland instead of sprawling China, which provides 80% of the world’s supply. But it was a tough sell. “We were struggling to get the price we thought was justified by the quality,” says communications chief Alex Filz.
No more. Not after contaminated products from China ended up on supermarket shelves. Suddenly, “Not Made in China” has become a major selling point. DSM’s Quali-C brand is flying out of its Scottish factory at more than double the price for bulk Vitamin C. “It’s a tremendous business opportunity for us,” says Filz.
In the midst of the imported food crisis, companies are finding clever ways to cash in. Some, like DSM, are playing the “not from China” card. Upscale New York grocery Fairway reassures consumers that none of its seafood is Chinese. Others see a growing business in making this global supply chain safer. One big player: IBM, which is pushing systems to trace the food supply from source to market. “Whenever there’s a crisis, there will always be a silver lining for someone who can help alleviate whatever pain is out there,” says crisis consultant Gene Grabowski, senior vice-president of Levick Strategic Communications.
Secaucus (N.J.) specialty dog food producer Freshpet found that silver lining. At the end of last year, it was selling its premium all-natural blend of meat and vegetables in a mere 200 stores. Most retailers said the idea was “interesting” but didn’t bite, recalls co-founder Scott Morris.Then pets began dying and, beginning in March, dozens of products were recalled because they might contain melamine from China, an industrial chemical. Freshpet threw out its only overseas ingredient, a protein component from Europe, and quickly ramped up its marketing. It printed big stickers for retailers to put on the refrigerator cases where its products are stocked, highlighting that the food was made daily with fresh, local ingredients. All of a sudden, the retailers who had given Freshpet the cold shoulder “started calling,” says Morris. Now, roughly 1,000 stores offer its dog food, with another 1,000 coming by yearend. Projected 2007 sales have more than tripled to nearly $50 million. “Sometimes you’re good–and you get lucky,” he adds.
With today’s global food supply, however, eliminating every particle from China is impossible for most major food companies. Even a simple product like a cereal bar contains ingredients from India, the Philippines–and China, which now supplies the bulk of the world’s vitamins, apple juice, and other goods. “I think most people are surprised by the diversity of the sources,” says ingredient consultant Peter Kovacs.