L'Oreal's Powdered Up

L'Oreal's new CEO Jean-Paul Agon reckons the significance of the company's first-half results is limited.

But with L'Oreal's share price jumping Thursday to its highest level since May 2002, investors clearly beg to differ. After three lean years by L'Oreal's high standards, the cosmetics company is back in rude health.

Investors have underestimated quite how favorable a strong U.S. economy, buoyant global economic growth, revived consumer spending in the more sluggish OECD economies, and the unquenchable thirst among consumers in the developing world for Western goodies are for L'Oreal.

With such a strong following wind, L'Oreal has been able to fine-tune its product mix, push through price increases, and ease up a touch on promotional spending. Its R&D effort is paying off with strong demand for its new range of active skincare products, like wrinkle and cellulite treatments.

The upshot is that despite customers running down some inventory - L'Oreal says that was a feature particularly in the U.S. in the first half - and high raw material prices, L'Oreal chalked up a 23% rise in operating profit.

That was on a 5.8% increase, like-for-like, in sales, as its gross operating margin expanded 1.7 points to a heady 71.5%. R&D, and advertising and promotional spending slipped a touch as percentages of sales.

However, as has happened in the past, this all means L'Oreal stock is back in expensive territory, trading at 27 times estimated 2007 earnings, and at a premium to nearest listed peers - from Avon to Beiersdorf, Christian Dior, Colgate-Palmolive, Estee Lauder and P&G.

As Agon would no doubt say, L'Oreal is worth it. Whether the stock is worth much more is more open to question.

L'Oreal's strong interim showing came off a weak first half of 2005. The company retains a 10% stake in patent-pressured drug-maker Sanofi-Aventis which L'Oreal might be better off disposing with.

Making a success of the Body Shop acquisition, consolidated from July 1, and the prospect of more sluggish-than-expected consumer spending in the U.S. and Western Europe in 2007, should keep investors' enthusiasm in check despite L'Oreal's strong operating performance.

Source: Business Intelligence

Big Food Companies Sell More Organic Products

WHEN ERNIE COSTAMAGNA, a third-generation California farmer, first tried growing organic tomatoes, his weeding bill rose tenfold, to $500 an acre. Shunning his usual chemical fertilizers, he stockpiled smelly chicken manure and bat guano. But when the curly-top virus attacked some of his plants last month, there was little more he could do than watch them succumb.

As the nation's big food processors and packagers start to develop organic products, many of their big farmer-suppliers are switching over at least some of their output to meet organic standards. But going organic can be a tough row to hoe. The switch away from traditional methods of farming and production is rife with complications, expenses and risks. "Sometimes it isn't worth it," says Mr. Costamagna, who says he plants 25% more crops than his organic customers require, as a contingency against lower yields.

With organic grocery products ringing up sales growth of some 15% a year, five times the growth rate of conventional packaged foods, several major supermarket chains have begun offering their own brand of organic pasta, cookies and juice. Now, giant food processors and packagers of national brands are getting in on the organic action -- spurred in large measure by Wal-Mart Stores Inc. The nation's largest retailer decided earlier this year to expand its organic offerings in the produce and grocery aisles across all its outlets and doubling the number of organic items in 10% of its stores.

Wal-Mart is introducing about 200 additional organic grocery products in 370 of its stores with the higher-income customer demographics Wal-Mart sees as most inclined to buy organic. But rather than stocking mainly private-label brands, Wal-Mart has opted to feature organic offerings from big brand marketers whose names and products are already well known to its customers.

"When a company the size of Wal-Mart is suddenly very interested, it gives us more reason to think the wave has gotten to the size where we can surf it," says Paul Norman, president of U.S. morning foods at Kellogg Co., of Battle Creek, Mich., which launched organic versions of Raisin Bran, Frosted Mini-Wheats and Rice Krispies earlier this summer. The organic products, with packages featuring a big, green "Organic" banner, cost on average 15% to 25% more than the regular versions.

The organic grains, sweeteners and other ingredients used in these products don't sprout up overnight, of course. Farmers who want their crops to be considered for the U.S. Department of Agriculture organic label must avoid chemical fertilizers and pesticides for three years. The transporting, processing and selling of organic food also is held to strict federal rules, which companies say crank up costs an estimated 50% over corresponding costs for conventional products. Even when organic products make it to the shelf, it isn't clear which ones will sell well.

Del Monte Foods Co., the San Francisco fruit and vegetable processor, decided about three years ago to venture into organics. But it wanted to move cautiously: The food industry had invested heavily in low-carb dieting, only to watch the trend fizzle a short while later. Still, the years of advance planning required for an organic label meant Del Monte would have to commit to the idea early if it wanted to launch products nationally while the trend was still a hot topic: To create five lines of organic canned-tomato products, Del Monte would need to convert 500 acres of cropland to organic methods.

Mr. Costamagna had been supplying Del Monte with conventionally grown tomatoes from his 26,000 acres of fields in California's Fresno, San Joaquin and Kern counties for 20 years. So when Dave Withycombe, Del Monte's vice president of operations, was looking for growers to farm organically, Mr. Costamagna signed on. Now, 8% of his acreage is farmed organically. "My children are now in the business, and if we want to continue to be a fourth-generation business we need to follow the trends," he explains.

Through trial and error, Mr. Costamagna has learned organic tricks, such as using drip irrigation to reduce weeds and planting "buffer crops," such as sugar beets and alfalfa, to attract bugs away from the tomatoes and cut down on disease. But there are always new problems to solve. Chicken manure and other natural fertilizers are getting harder to find, and fuel costs are making it more expensive to haul the tons of manure he needs.

Despite his higher costs, Mr. Costamagna couldn't begin commanding a premium for produce grown on chemical-free land until the land was certified as organic about a year ago. Del Monte has agreed to buy his organic crop for the three years following certification -- which is how long it will take to recoup his investment, he figures. "First you try to learn," Mr. Costamagna says, "then you earn."

For Del Monte, the learning curve also has been steep. Factories that process organic products have to be certified organic. In factories processing both organic and conventionally grown foods, the machines have to be stopped and cleaned with an organic solvent before the organic run. Still, early sales of Del Monte's organic tomato products, which went on sale this spring, are promising enough that the company is moving ahead with other organic products, including peas, corn and green beans.

Companies developing organic versions of existing products don't have to reinvent the recipe, but they can expect to make adjustments. Mars Inc., another company that resisted the organic movement until Wal-Mart assured them of a market, has taken on the challenge of creating an organic Dove chocolate bar.

Not just any organic cocoa beans would do. Mars required just the right flavor profile, which it describes as "chocolate-y without harshness" and "velvety smooth without any detectable particles." Since cocoa beans' taste varies depending on the conditions in which they are grown, it took Mars far longer than usual to track down and import enough organically grown cocoa beans with the desired characteristics. Wal-Mart will be selling the organic Dove chocolate bars exclusively -- at least at first -- starting this month. A 3.5 oz. bar costs $2.97.

Kellogg couldn't find enough white wheat to make the organic version of its Frosted Mini-Wheats cereal, so it had to use red wheat instead. Finding enough organic sugar and corn syrup also was a problem, so it has turned to organic evaporated cane juice in its place. "When you change ingredients, you still have to match quality expectations, and that is not as easy as you might think," says Kellogg's Mr. Norman. Kellogg conducted extensive consumer taste-testing to make sure it got it right.

Organic headaches trickle all the way down to the retailer who tries to sell the products. Even displays can be tricky. The USDA can fine a store shelving conventional fruits and vegetables above organic items, because when the non-organic produce is misted with water, it might drip residue onto the organic items.

Wal-Mart found the negotiating leverage it usually has with suppliers evaporated when it came to pricing organics because of the products' tight supplies and higher costs. "We sometimes have to pay more than other companies" to lock up enough supplies, says Bruce Peterson, senior vice president for fresh produce at Wal-Mart. Wal-Mart says its other efficiencies, including lower operational and transportation costs, still will allow it to price its organic products at 7% to 25% less than its competitors.

Despite the boost from Wal-Mart, some big food companies are determined to move slowly, waiting for demand for organic to grow big enough to justify the trouble and expense. Mr. Norman says Kellogg is limiting its organics line to products that the whole family eats, tapping into the broadest market possible. "You won't see organic Fruit Loops any time soon," Mr. Norman says.

Food supplement Market Data

A Skin-Win Situation

Impressed by the success of the natural products industry, major cosmetics companies are taking a closer look at cosmeceuticals.
In The Innocents Abroad, Mark Twain wrote that “one is apt to overestimate beauty when it is rare.” That may be true, but when it comes to the market for beauty products, it’s difficult to overestimate demand. Cosmeceutical sales reached $13 billion in 2005 and may top $17 billion by 2010, according to market research firm Packaged Facts (New York City). Skin-care products earned the lion’s share, with about $7 billion in sales. Exensive marketing data at
http://www.chartsbank.com/DiagramCategory.aspx?CategoryID=41

Who is the average cosmeceutical consumer? The answer may surprise you: Image-conscious women, men, baby boomers, and young adults. “The stereotype of this being a women’s-only market is passé,” says Don Montuori, publisher of Packaged Facts. “While aging baby boomers are still the best target, marketers would be wise not to overlook the broader-reaching consumer base.”

WHO, WHAT, WHY?


Cosmeceutical users are diverse. But despite their differences, they are united in one goal: to slow the signs of aging. “Everyone is looking for a good formula that works in real life,” says Ohad Cohen, CEO of herbal extract supplier Vitiva (Markovci, Slovenia). “If the formula is all natural, that’s the best scenario.”
While FDA does not have an official definition of the term cosmeceutical, the consensus is that cosmeceuticals are cosmetic products, often derived from natural sources, that claim to offer therapeutic benefits. The term can refer to products that are ingested or topically applied. Some cosmeceutical ingredients, such as aloe, can be both ingested and topically applied.
Cosmeceuticals appeal to consumers for a variety of reasons. One reason is that consumers see the products as alternatives to invasive procedures like surgery or temporary solutions like Botox injections. Many shoppers believe that because of their therapeutic qualities, cosmeceuticals will offer benefits that last.
“While many cosmetics have short-term effects on the appearance of the skin, cosmeceuticals may improve the integral condition of the skin in the long term,” says Kristen Trautman, product category coordinator for essential fatty acid supplier Bioriginal Food & Science Corp. (Saskatoon, SK, Canada). "Consumers therefore consider cosmeceuticals as a solution, not only for improving the appearance of the skin, but also for nourishing the skin.”
Another reason for the popularity of cosmeceuticals is that consumers are becoming more accepting of the notion that what they eat can affect how they look. “The idea that what we eat influences our health is a well-established concept worldwide,” says Christian Artaria, vice director of marketing and development at herbal extract supplier Indena (Milan, Italy). “The idea that what we eat can specifically influence our skin’s appearance is also becoming an established concept.

GOING MAINSTREAM

Consumers aren’t the only ones to embrace the concept. Cosmetics giants like L’Oréal (Clichy, France) have already launched their first wave of cosmeceuticals, and more are under development. “Products promoting healthy hair, skin, and nails have been offered by nutritional companies for years,” says Scott Rosenbush, botanicals business manager at P. L. Thomas & Company, Inc. (Morristown, NJ). “Now these products are going mainstream.”
In fact, companies like L’Oréal have been paying close attention to the success of the dietary supplement and healthy food industries. “If the whole natural products movement is gaining momentum, why shouldn’t they compete for a piece of it?” asks Wayne McCune, senior vice president of sales and marketing at Aloecorp (Lacey, WA). Most companies already have loyal customers, he notes, so offering cosmeceutical products under their brand names makes sense.
For instance, European consumers expressed strong interest in Innéov Fermeté, a cosmeceutical product that was the result of a joint venture between L’Oréal and Nestlé (Vevey, Switzerland). Launched in 2003, Innéov contains vitamin C, soy isoflavones, and lycopene to promote skin tone. Innéov proved to be popular among first-time supplement buyers, according to L’Oréal. The company also noted that nearly 80% of those who used the product for at least three months said they intended to purchase it again.

INGREDIENT SELECTION AND QUALITY

Few cosmeceutical products can survive for long in the marketplace if they aren’t based on a good formula. Because many cosmeceutical ingredients are unstable or lack scientific substantiation, choosing the right ones can be a challenge. On the other hand, quite a few popular ingredients are based on natural substances that are backed by centuries of traditional use and, in some cases, clinical trials. Read on for a discussion of several cosmeceutical ingredients that are more than just skin deep.

PYCNOGENOL

One of the most versatile dietary supplement ingredients on the market may also turn out to be one of the most useful cosmeceutical ingredients. Pycnogenol, derived from the bark of the French maritime pine tree (Pinus pinaster), contains high concentrations of antioxidant compounds like procyanidins that protect collagen, improve the circulation of tiny skin capillaries, and counteract UVB radiation.
“One of Pycnogenol’s basic mechanisms of action is that it helps neutralize the harmful effects of free radicals, which can aggressively break down and damage cells,” says Frank Schönlau, PhD, director of scientific communication at Horphag Research Ltd. (Geneva), which supplies Pycnogenol. “In fact, research suggests that Pycnogenol may reduce damage to the skin cells caused by UVB radiation by effectively neutralizing the free radicals originating from UV rays that saturate the skin.”


According to Schönlau, studies done at the University of California and the University of Arizona have shown that Pycnogenol has antiinflammatory properties. “Pycnogenol inhibits the release of proinflammatory mediators, preventing activation for immune cells, helping protect skin from photoaging, and extending the skin’s resistance to sunburn,” Schönlau says.
For example, Schonlau points to a small pilot study published in the January 27, 2006, issue of the Journal of Inflammation that examined Pycnogenol’s role in reducing harmful inflammation. In the study, conducted at the University of Würzburg in Germany, seven healthy volunteers received 200 mg of Pycnogenol for five days. Analysis of blood plasma taken before and after the trial showed that Pycnogenol lowered the activity of nuclear factor kappa B (NF-kB), a molecule linked to inflammation, by 15%, according to Petra Högger, PhD, the study’s lead author. NF-kB can trigger inflammation by activating proinflammatory molecules that travel throughout the bloodstream.
“Inflammation is a double-edged sword for our health,” Högger says. “Beneficial inflammation is crucial for fighting infections and healing wounds. Harmful inflammation, such as that triggered by a noninfectious event, erroneously aims at the body’s tissue, causing significant damage. Patients who supplemented with the pine bark extract Pycnogenol benefited from an immune system response that attenuated excessive inflammation.”
Although the Journal of Inflammation study was a pilot trial intended to identify an in vivo method of measuring the antiinflammatory effects of plant extracts, Schönlau notes that Pycnogenol has been the subject of more than 200 studies, including clinical studies that have shown antiaging benefits from daily supplementation. “This is truly exemplified by the array of both topical and oral skin-care products with this ingredient that are available globally today,” Schönlau says.

BIOASTERI

Borage (Borago officinalis) oil is another cosmeceutical ingredient with strong antiinflammatory properties. In 2005, the National Institutes of Health’s (Bethesda, MD) National Center for Complementary and Alternative Medicine awarded a grant to the Wake Forest (Winston-Salem, NC) and Harvard (Cambridge, MA) Center for Botanical Lipids to study the effects of polyunsaturated fatty acids derived from plants like flax and borage on inflammation.
According to Bioriginal’s Trautman, borage oil is one of the richest natural sources of gamma linoleic acid (GLA), an omega-6 fatty acid that contributes to the healthy function of cellular membranes by maintaining the stability and fluidity of dermal cells and preserving the skin’s natural water-loss barrier. Trautman notes that GLA may also inhibit androgens that are related to acne. Bioriginal supplies BioAsteri, a generally recognized as safe (GRAS)–affirmed borage oil ingredient.
“By preventing transepidermal water loss, GLA prevents dry skin,” Trautman says. “The proper maintenance of the skin’s barrier function is also essential for preventing skin infections and irritation. If the body’s natural barrier is defective, then the skin can be more susceptible to damage and a variety of disorders including dry skin, eczema, sunburn, and acne.”
Trautman says that some studies suggest that when topical lotions containing high-quality borage oil are applied to the skin, GLA is absorbed by dermal cells. “GLA-rich borage oil has been shown to provide a powerful antiinflammatory effect, which means that it can be effective in the alleviation of damage from ultraviolet light,” Trautman says. “The skin generally contains high levels of arachidonic acid, which can inflame sunburn. Applied topically, borage oil acts as an antiinflammatory to reduce the redness, swelling, and pain caused by ultraviolet damage.”

Trautman adds that borage oil’s antiinflammatory properties, combined with its moisturizing effect, make it an attractive cosmeceutical ingredient. “As the body ages, it becomes less capable of producing GLA, meaning that cellular membranes retain moisture less effectively and the skin becomes dry and rough. The topical application of borage oil products can help promote a smoother complexion and soothe dry, scaly patches of skin. High-quality, concentrated borage oil, such as our BioAsteri brand, is becoming a popular ingredient for cosmeceutical applications, benefiting from well-documented research that highlights its various skin benefits.”

OPEXTAN
Opextan, an olive fruit extract standardized to contain the polyphenol verbascoside, is the product of a five-year joint collaboration between Indena and Kanebo Cosmetics Inc. (Tokyo). Research conducted by Kanebo, one of Japan’s largest cosmetics companies, found that verbascoside may help prevent thinning and dehydration of the skin. According to Takeshi Ikemoto, research and development manager at Kanebo, studies have confirmed the antioxidant effects of Opextan, which can be taken orally and topically. “Preclinical and clinical evidence of its free radical–scavenging capacity was obtained successfully in our laboratories,” he says.
“The main benefit for the skin is protection against premature wrinkles,” explains Indena’s Artaria, who notes that fear of the visible signs of aging was identified by DataMonitor (London) as the greatest influence on cosmeceutical use. “What makes Opextan unique is that it works via several different mechanisms to reach this goal.”
For instance, Artaria notes that Opextan prevents the weakening of underlying tissue and also hinders moisture loss, creating a plumper skin appearance. Specifically, Opextan’s antioxidant activity helps maintain the cellular structure of the skin, block damage from ultraviolet radiation, and lessen epidermal permeability. Moreover, Opextan helps maintain normal blood sugar levels, which preserves moisture, Artaria adds.
Indena plans to promote the ingredient outside of Japan, where it is already marketed under the brand name Bella Vita. “We are proud of our long-term collaboration with Kanebo,” Artaria says. “Both companies have shared their expertise to achieve the success of this novel ingredient.”

ALOE VERA

The succulent aloe (Aloe vera) has a long history of use as a remedy for injured skin and as a laxative. Recently, however, manufacturers of beauty products have been eager to explore its potential as a cosmeceutical ingredient. According to data from the International Aloe Science Council (IASC; Irving, TX), growers across the globe cultivated more than 23,000 hectares of Aloe vera in 2004. IASC estimates that worldwide sales of raw aloe materials were in the range of $65 million to $80 million, while sales of finished aloe products reached $110 billion. One reason that manufacturers are upbeat about aloe is that it can be taken topically and internally.
“Aloe is unique in that it has been shown to be beneficial in both oral ingestion form and certainly topically,” says Aloecorp’s McCune. “The whole understanding that aloe can be beneficial in tablet or capsule form is still gaining momentum but will continue to grow, especially as further science is completed. It has been hypothesized that aloe is one of the few ingredients that supports the ‘beauty from within’ concept. Whether science supports such a theory remains to be seen.”
In 2005, Aloecorp helped manufacturers take the “beauty from within concept” one step further by introducing new technology that improves the taste of aloe ingredients while enhancing their bioavailability. The company’s Qmatrix process uses a combination of low-temperature, short-time dehydration and enzymatic modification to produce crystal flakes of aloe that meet a targeted molecular weight distribution. The flakes, which benefit from reduced moisture absorbance and improved flow characteristics, can be reconstituted, bottled, or packaged dry. The technology has also enabled Aloecorp to add fruit ingredients, such as blueberries, cranberries, and raspberries, to the aloe flakes. One of the first companies to take advantage of the new technology is Nutri Pharmaceuticals Research Inc. (Las Vegas), which will use the flakes as a carrier matrix for its oil-to-powder conversion process. Godfrey Yew, president of Nutri Pharmaceuticals Research, says the process will help manufacturers use oils such as docosahexaenoic acid, eicosapentaenoic acid, and GLA in “a more production-friendly and flexible dry-powder form.”
“Developing a range of powders using oil-to-powder technology and our Qmatrix aloe vera crystal flake will enable us to help beverage suppliers and food producers develop unique, efficacious functional foods and beverages,” says McCune. “Plus, it will offer dietary supplement and cosmeceutical manufacturers an exciting opportunity for patented, health-specific products.”

ESTER-C

While vitamin C may help keep skin looking smooth, soft, and supple, it often presents a problem for manufacturers. The nutrient’s instability can affect product potency and shelf life, and its acidic nature may render it unsuitable as a cosmeceutical ingredient for people with some skin types. Moreover, the need to keep vitamin C in an oil base can cause problems for people with skin that is prone to acne. “If a product containing vitamin C is water based or in a container that must be opened and exposed to the air repeatedly, it can lose up to 90% of its vitamin C within 30 days of being manufactured,” says Amy Nelson, sales coordinator for Zila Nutraceuticals Inc. (Prescott, AZ). “If you want to reap the benefits of vitamin C, you must get the vitamin C to the skin.”
According to Nelson, more-stable forms of the nutrient, such as Zila’s Ester-C, a patented, neutral-pH combination of calcium ascorbate and other ingredients, can maintain its potency for up to two years. Zila manufactures several grades of Ester-C for use in dietary supplements and also offers a topical serum, Ester-C gold. The oil-free serum, intended for beauty salons, day spas, and dermatologists, is packaged in an airtight and watertight pump bottle, guaranteeing an average vitamin C content of 14.3%. “It’s highly concentrated, so the user can add it just prior to application to any skin-care product and maintain the original stability of the product,” Nelson says. “This allows consumers to use it with a water-based product if they like, because it does not remain in that product over time but is only added just prior to application.”

URSOLE

Fragrance is an essential component of many beauty products. Although herbs from the minty Labiatae family of plants are known to give off an aromatic scent, their distinctive odor is only one of their cosmeceutical benefits. Labiatae plants like basil (Ocimum basilicum), rosemary (Rosmarinus officinalis), and sage (Salvia officinalis) also contain the antioxidant compounds ursolic acid and oleanoic acid, which may have several beneficial effects on the skin.

Ursolic acid makes skin firmer and more elastic, and it is therefore mainly used in anti-aging cosmetics,” says Vitiva’s Cohen, who adds that the acid inhibits the antiinflammatory enzymes cyclooxygenase and lipoxygenase. Ursolic acid is also thought to improve the appearance of photoaged skin and suppress the production of UVA-induced oxidation. Vitiva manufactures an ursolic acid extract, Ursole, using a patented process that yields a 45% ursolic acid content. “The result is a cost-efficient production of highly concentrated Ursole,” says Cohen. “This remarkable product offers great opportunities for nutraceutical and cosmeceutical producers in several applications.”

NUTRILAYER

Bran, the nutritious coating of grains that is often discarded during food processing, is the source of one cosmeceutical ingredient that offers moisturizing and antioxidant benefits. In April, Eastman Chemical Co. (Kingsport, TN) introduced NutriLayer, a topical ingredient derived from rice bran.
Extracted from rice that is not genetically modified or chemically altered, NutriLayer contains rice bran wax, squalene, and phytosterols to create a barrier on the skin that seals in moisture. The ingredient also provides tocopherols and tocotrienols, antioxidants that help fight free radicals. According to Eastman, rice bran helps inhibit UV-induced oxidative stress and offers protection against the damaging effects of photoaging.
“NutriLayer helps personal-care brands meet consumer demand for holistic, natural treatments that yield touchable, visible results,” says James McCaulley, global market development manager at Eastman. “It gives brands the opportunity to substantiate their claims and give consumers exactly what they seek.”

LUMISTOR

Lumistor, an animal-free form of L-hydroxyproline created through fermentation, helps promote moisture retention and epidermal cell proliferation, according to manufacturer Kyowa Hakko USA (New York City). L-hydroxyproline is a major component of skin collagen, connective tissue, and bone, stabilizing collagen’s three-dimensional structure.
“Animal studies have confirmed L-hydroxyproline’s safety and indicated that it has a high potential for use as an effective ‘beauty from within’ ingredient,” says Karen Todd, RD, senior marketing manager at Kyowa Hakko USA. “Preliminary studies with oral supplementation of Lumistor have shown increased skin hydration after four weeks of oral intake.” Todd adds that Kyowa Hakko plans to study the effects on fine lines and wrinkles of a treatment that combines Lumistor with Resilen, the company’s hyaluronic acid ingredient. In addition, Todd notes that Cognizin, Kyowa’s cognitive function ingredient, may also affect the appearance of wrinkles by stabilizing cell mitochondria and improving energy storage.
“We have targeted both antiwrinkling and long-lasting moisturization of skin, hair, and nails because of the vast line of amino acids, amino acid derivatives, and peptides developed by Kyowa Hakko through unique fermentation processing methods,” Todd says. “Such innovations provide us with the means for supporting the cosmetic, food, and nutritional supplements industries with natural and highly functional ingredients in these important areas.”

5-LOXIN

An ayurvedic herb related to frankincense may play a role in combating irritation by inhibiting the activity of 5-lipoxygenase, an enzyme that mediates inflammation. Last year, researchers from Ohio State University (Columbus, OH), Georgetown University (Washington, DC), Creighton University (Omaha, NE), and the Laila Impex Research Center (Vijayawada, India) found that one of the compounds in the plant Boswellia serrata, acetyl-keto-beta-boswellic acid (AKBA), inhibited the expression of matrix metalloproteinase enzymes that break down structural proteins in cartilage. The research was published in the April 2005 issue of DNA and Cell Biology. P. L. Thomas & Company’s 5-Loxin, the Boswellia serrata extract used in the study, is standardized to contain 30% AKBA.
According to Paul Flowerman, president of P. L. Thomas, a new study that appeared in the April 2005 issue of Toxicology Mechanisms and Methods confirmed the extract’s safety in animals, testing 5-Loxin for acute oral, dermal, primary skin, and eye irritation, as well as 90-day subchronic toxicity.
“This is an important study affirming 5-Loxin’s safety in several models,” Flowerman says. “These results are also supported by a recent Ames mutagenicity study, further developing the body of evidence supporting its use.”

CYNERGY

Ultimately, many consumers believe that the best approach to skin care is one that is based on a holistic perspective that combines the topical application of helpful ingredients with nutritional supplementation. Two cosmeceutical ingredients from Keratec Ltd. (Lincoln, New Zealand) may address this need.
The ingredients, the topical Cynergy TK and the supplement Cynergy NK, are made from keratin extracted from sheep’s wool. The keratin contains low concentrations of zinc and copper protein complexes that help repair and maintain skin. The proteins also facilitate increased elasticity and moisture retention. According to Keratec, Cynergy NK also soothes inflammation by blocking prostaglandin E2 production. Gavin Frankpitt, international sales executive at Keratec, adds that the company extracts the keratin in a fully intact and biologically active form using proprietary technology. “Our unique process and product are covered by patents,” says Frankpitt. “With our gentle extraction process, we retain the functionality and bioavailability of the protein components by protecting selected bonds. These are not broken or denatured, as is the case with the harsh chemical methods used for production of traditional hydrolyzed keratin from animal by-products.”
The two ingredients appear to work together to create a synergistic effect on skin health, notes Fertram Sigurjonsson, vice president of business development at Keratec. “Our offering to consumers is a natural, renewable, and bioactive solution to the dilemma of which materials to select for integrated skin-health conditions,” Sigurjonsson says. “Cynergy allows customers to select an integrated vertical solution for premium skin care.”

Food supplement market

An amendment to the Food, Drug and Cosmetic Act that would obligate supplement manufacturers, packers and distributors to notify FDA of any serious adverse events reports (AERs) was introduced yesterday, to the applause of the industry associations.Senate bill 3546, the Dietary Supplement and Nonprescription Drug Consumer Protection Act, is sponsored by Republican Senator Orrin Hatch and Democrat Senators Tom Harkin and Dick Durbin.

It will require supplement labels to include a telephone number for the reporting of serious advert events, and require supplement companies to pass on these reports to FDA within 15 days.

For its part, FDA would be obligated to consolidate multiple reports of the same incident, and retain records for six years. Individual states would be precluded from establishing their own AER systems.

The industry opposed the introduction of an AER bill in the state of California in 2004 on the grounds that it covered minor, as well as serious AERs, and would have been financially burdensome for supplement companies.
Steve Mister, president and CEO of the Council for Responsible Nutrition, told NutraIngredients-USA.com that the industry associations have had a seat at the table throughout the process, and the senators have shared drafts with them.

The bill has been in the works for the past year, and a meeting was held at Expo West in Las Vegas last autumn at which the associations explained the rationale behind supporting the bill to the industry at large.

The news of the bill’s introduction was also welcomed by the National Nutritional Foods Association (NNFA) and the American Herbal Products Association (AHPA).

The NNFA issued a statement saying that it believes the bill “represents a fair and meaningful collaboration among the supplement industry, our bi-partisan champions in the Senate, and legislators who would like to see more stringent oversight of dietary supplements”.

The dietary supplements industry is regulation by DSHEA, the 1994 Dietary Supplements Health and Education Act (also an amendment to the Food, Drug and Cosmetics Act). This law has drawn criticism from some quarters since it does not require the same pre-market approval for supplements as is necessary for prescription drugs.

However adverse events are by no means only associated with safety of specific ingredients; they might also stem from supply chain issues, contamination or tampering.

By having the FDA collate all adverse events, the government agency may be able to identify patterns that would lead to the source of a problem being identified, such as tracing it back to a common supplier. Such patterns might not be immediately evident to manufacturers dealing with isolated or few incidences.

Mister also pointed out that premarket testing is not a catch all for safety problems, as has been seen with issues over Vioxx and other drugs in the past.

The 15-day window to pass on reports associated with supplements or OTC drugs to FDA allows for a very quick response.

As for why the bill is being introduced now, 12 years after DSHEA, Mister said that the industry has matured in the intervening years. It wants to be respected and recognised, and is aware of its obligation to consumers.

“In the last 12 years, the FDA and the industry have recognised more and more the importance of adverse events, understanding that things happen in the market that you may not expect when preparing for market,” said Mister.
He added that the case of the banned herbal ephedra also has a lot to do with it; in the late 1990s a company received a number of AERs relating to ephedra but these were turned over to the FDA only when it was issued a subpoena.
“That started the industry thinking that we need to be credible about this.”

AERs are defined only as health-related events resulting in death, a life-threatening experience, inpatient hospitalization, persistent or significant disability or congenital abnormality or birth defect. As such, the industry is expecting a low incidence of reports lodged with the agency – yet to prove this it has to put its money where its mouth is.

Some concern has been raised from within the industry that the collation of AERs will make it easier for plaintiffs’ attorneys to bring law suits against the industry, however a mechanism has been built in to protection against this; namely.
AHPA president Michael McGuffin said: “Marketers of [supplements] can be certain that they will be provided with the same kinds of protection that the pharmaceutical industry enjoys, so that this system does not penalize companies that comply”.

The bill includes language to make it clear that reporting an AER to the FDA “shall not be construed as an admission that the dietary supplement involved caused or contributed to the adverse event”.

It would also be illegal to file a false AER report.
The bill is being immediately to the Health, Education, Labor and Pensions (HELP) committee, and a mark-up session has been scheduled for next Wednesday.

From there the timescale becomes less clear, but Mister said: “We are hopeful it could be on the President’s desk by the end of the year.”

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Vitamin E market in turmoil

A new report says that the market for vitamin E supplements is in turmoil as consumers become confused by conflicting media messages, but despite this the cosmetics and toiletries industry is likely to fuel future growth as it is increasingly incorporated into a range of skin care products.

The report outlines that as vitamin E manufacturers consolidate their operations and make the most of less expensive production methods, prices are likely to fall but that demand will vary according to industry sector.

Market data contained in the Frost & Sullivan report reveals that the US vitamin E market earned revenues of $209.6m in 2005 and is estimated to reach $260.8m by 2012.
But evidently the picture is likely to be a mixed one for the industry, as demand is hit by different perceptions of the vitamin's benefits.

In the supplements sector, where Vitamin E is marketed on the strength of its powerful antioxidant properties and its known benefits to both skin and hair help to market it for both well-being as well as beauty purposes.

However, Cognis Nutrition and Health, one of the leading suppliers of vitamin E in the US recently reported a decrease in demand for its natural vitamin E products of 40 per cent, which led to a drop in revenues of 18 per cent in 2005.

"With the decreased demand for vitamin E in human supplement applications, there is a surplus of supply over demand thought to drive down the market price per pound," said Frost & Sullivan Research Analyst Jennifer Steinke.
The report suggests that this problem has arisen due to low consumer understanding that means the increased interest in vitamin E supplements is likely to be limited.

The paradox is that as consumers become more aware of the health benefits of food ingredients, in turn they lack an overall understanding due to a deluge of information on the subject that is not always positive.

"Low consumer understanding of the health benefits of vitamin E supplementation impedes market growth," explained Steinke. "Thus, the market for vitamin E in supplements is not expected to return to normal until consumer understanding increases."

To tackle this problem, the report suggests that marketers of vitamin E supplements should aggressively undertake marketing strategies that counter-attack negative aspects associated with the vitamin and stress its attributes.

Demand for vitamin E is being driven by the feed market - for 70 per cent of global supply goes to animal nutrition - but also by new research supporting its use in cosmetic applications, with growth in these areas expected to be sustained for the next five years.

For cosmetics applications vitamin E oil is known to help maintain general skin healing and condition and can reduce the appearance of stretch marks. Equally, taking it as a supplement is said to promote shinier hair as well as promoting general skin health.

But where it has proved to be increasingly popular is in its application for the skin care segment. Because of vitamin E's antioxidant qualities and its ability to smooth out fine lines on skin, it has proved an increasingly popular ingredient for products aimed at the booming anti-aging market.

Considering this trend, its seems that supplement manufacturers might gain a larger market share if they were to market vitamin E supplements on the strength of its beauty and well-being properties in an effort to muscle in on some of the growth being experienced in the cosmetics and toiletries sector.

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