Competing in the sports industry - Degussa BioActives has its say

Related tags Sports nutrition Dietary supplements Nutrition

German company Degussa BioActives, a leading maker of creatine
products, has been focusing on its sports nutrition segment this
year, actively promoting Creapure and other sports products at
trade shows. spoke to Dr. Karl-Heinz Zirzow,
dietary supplements business manager and Craig Fish the US-based
sports nutrition manager about the pros and cons of competing in a
rapidly growing industry.

Last week's report​ on the recession-resistant sports nutrition industry will hardly come as a surprise to many of the major supplement manufacturers. In the US sports nutrition supplements were worth $1.74 billion (€1.84 bn) in 2001, a nine per cent increase on the year before, and the sports nutrition and weight loss supplements segment as a whole is the fasting growing in the industry.

The report is also confirmation for the companies investing in R&D for new products. German company Degussa BioActives​, which claims to be the market leader in creatine products, has responded to the strong market by actively promoting its special nutrition segment this year, both at trade shows like Supply Side East and Vitafoods last month, and in a new advertising campaign.

Dr. Karl-Heinz Zirzow, dietary supplements business manager​ for the company explained: "Last year supplements were weak but sports nutrition is still a safe industry. The market focuses on a group of people able and willing to pay for sports nutrition."

Indeed BioActives, a unit of Degussa Health and Nutrition which saw sales of €1.2 billion in 2001, reported weaker earnings last year than the previous year claiming it was adversely affected by low demand for dietary supplements in the US.

Degussa's creatine brand Creapure has benefited from growing sales in sports supplements, but a booming market means more competition.

US-based sports nutrition manager Craig Fish​ said: "Creatine is well-known and pretty focused - there is nothing else that claims to do the same thing. But the good market days for creatine are over, we have to go forward."

Fish explained that competition, from Chinese companies particularly, has brought prices down. "As a fully synthetic product, creatine can be made by any chemicals company so where the BioActives business aims to show strength is through the branding.

"The Creapure brand name means quality and our advantage is science. The Chinese may have price advantages but they don't have the science to back up their products. Nor do they have the sales staff or R&D to work with their customers."

Fish believes that contact with clients is invaluable. "One of the most negative effects on the business has been contamination in other countries, with some companies adding illegal steroids. We get numerous calls to ask: 'Are you putting steroids in your creatine?' Other companies do not have a sales organisation to contact."

The safety issue with creatine continues to be controversial. Found naturally in foods such as fish and red meat, some are concerned that taking excessive quantities of the amino acid could be dangerous. While Fish claims that the BioActives product is entirely safe, sports bodies are showing increasing concern. The substance is not banned by the International Olympics Committee (IOC) but a study by France's food safety agency AFSSA found a 'potential cancer risk' with the long-term use of the supplement, hence the ban on all creatine products in France.

The high-profile case with football club Juventus has also raised the issue - earlier this year French footballer Zinedine Zidane admitted to using creatine while playing for the club.

"Not one clinical study out there proves against creatine. There is no single harmful effect and a ten-year safety record,"​ argued Fish."There have been anecdotal stories concerning creatine, but bad press has not diminished the market. The only thing that did that was the economic downturn,"​ he added.

The state of the economy is however unlikely to have as big an impact on the industry as regulation will. Despite sustained growth in the industry, there has been little done to improve safety and regulate the masses of new products appearing on the market.

"It's a dirty industry. For example, although there is no stable liquid creatine on the market, it is sold by several companies. There is going to have to be something done,"​ claimed Fish.

In fact he suggests that if it had not been for the bad press generated by ephedra, little would have raised the concern that has prompted consumers to think more about their safety.

The BioActives business has a regulatory affairs person responsible for ensuring compliance with the DSHEA and national legislation in Europe. This could be crucial according to the NBJ report cited earlier which suggested that companies have to remain adaptable to take advantage of the changing business and regulatory environment.

The report also suggested that continued investment in brands was important as image is key for sports products and brand popularity can shift dramatically in the sports nutrition industry.

"The Creapure brand is backed by science so there is a consistent quality aspect. We use clinical science and work on this with our clients. If there is anything new on creatine we let our clients know. This helps educate people,"​ said Zirzow.

The Creapure brand now includes Creapure Citrate and Creapure Purovate, claimed to have improved bioavailability and taste. There are also new applications planned for Creapure, some outside of sports nutrition targeting the ageing population.

"We want to make new formulations and blends, improve our delivery systems and target a different market. We want to go closer to the medical sector where the marketing is more difficult because doctors are sceptical about supplements and the science aspect that we are strong in plays a more important role,"​ said Zirzow, who declined to give further detail on projects in the pipeline. He did however confirm that sports nutrition would remain valuable to Degussa BioActives.

"Sports nutrition will always be a substantial part of the business. At the same time we would like to develop other areas, for instance blood glucose management products. The long-term aim is to keep launching science-backed quality products and then protect them with patents - this is what will do well on the market. A patent means success in the long-term market."

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