Ashland’s new business unit prepped to create ‘a global presence in the nutraceutical/food market,’ says VP
“We are focusing on creating products and services that combine the nutraceutical expertise of Pharmachem, and the nutrition and excipient know-how of Ashland, to create a global presence in the nutraceutical/food market,” David Neuberger, Group VP of Pharma, Health and Wellness, and Agriculture at Ashland Global Holdings Inc. told NutraIngredients-USA.
Ashland, traded on the New York Stock Exchange, bought nutraceutical contract manufacturer and ingredient supplier Pharmachem Laboratories for $660 million in April of this year, greatly increasing its capabilities in the sector. With a wide portfolio of chemical offerings ranging from pharmaceuticals to personal care, this business unit won’t be Ashland’s first dip into food and beverage—the company has experience in food and beverage product development, ranging from stabilizing sugar reduced beverages to adapting foods for gluten-free diets.
Starting with performance nutrition and aloe vera
But Ashland Health and Wellness will plunge even deeper into the functional food and beverage as well as nutraceutical sectors. One area within the sector that the new business unit will focus on in its early stage is performance nutrition.
Category Crossover
Ashland's new Health and Wellness business unit rides on the health-conscious consumer trend. One example that David Neuberger, Group VP of Pharma, Health and Wellness, and Agriculture at Ashland Global Holdings Inc. is the 'category crossover.'
"Millennials, in particular, are always in search of new product formats and we see new combinations of product delivery systems and ingredients coming on the market," he told NutraIngredients-USA.
"Performance nutrition used to be just sports drinks. Now we see products like chews, power shots and jerkies. With our Pharmachem processing capabilities, we can create products like encapsulated multi-vitamin sprinkle packs. It’s a great example of an Ashland Ingredient (ferronyl iron) matched up with Pharmachem processing to create a great tasting, on-the-go nutrition product that dissolves instantly on the tongue. There are many more examples of these to come."
“In performance nutrition, some key needs of these consumers are supporting an active lifestyle, improving physical endurance, increasing protein intake, accelerating muscle recovery and increasing muscle growth. A great product example here is Pharmachem’s Acti-Solve,” Neuberger said.
“We have a proprietary process which significantly improves the solubility and dispersion characteristics of ingredients. This is great news for a formulator who wants to incorporate branch-chain amino acids, as an example, into a sports recovery powder drink mix offering both performance and satisfying consumer experience.”
Another category the new business unit will focus on while in its infancy is aloe vera, which Neuberger described as a “strategic core competency—its use in food and personal care products is a strong and growing market.”
To Neuberger, the combination of the two will help the new business unite gather momentum. “Research indicates that an estimated 24% of US consumers are buying some kind of performance drink. In addition, annual sales of healthy beverages with aloe vera are probably in excess of $6 billion. We see that as a significant opportunity, particularly outside the US,” he said.
A global strategy for Ashland’s Health and Wellness unit
Global expansion will be on top of Covington, KY-based Ashland’s agenda for its new unit, with Neuberger saying that two major initiatives include adding new capabilities to its existing network, as well as adding new markets to enter.
“[We are looking at] the geographic expansion of the Pharmachem business model and market expansion, where we would look to have products from both [Ashland and Pharmachem] available for sale to customers globally,” he said.
He added that the project will be a multi-year effort, and may be complemented by “potential acquisitions as appropriate.”
He also sees a lot of potential crossovers. ”For example, we see growth opportunities for Ashland’s Aquarius film coatings to be offered to Pharmachem’s nutraceutical customers.”
With half of Ashland’s $5 billion in sales for fiscal year 2016 generated outside North America, Neuberger said that Ashland’s international nutraceutical customers can rely on more tailored partnerships.
“Although many [of our] products will go across all regions, business will be driven by customer needs. Our regional teams will identify the product and service requirements to best meet the needs in their respective markets,” he said.
