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Food, beverage, or supplement: the type of ingredient may dictate the formula for success

By Justin Prochnow February 18, 2014, 01:40 pm MST

The avenues to companies for marketing and selling products are substantially different than those available for companies even twenty years ago.  Supermarkets, with a wider array of sections than ever before, specialty health food stores, vitamins stores, and a little thing called the Internet, to name just a few, have allowed companies to get their products out to more consumer than ever before.  The myriad of platforms to sell products has also led to a substantial increase the amount of products on the marketplace, generating more competition between companies to sell their products.  Companies are always looking for novel ingredients and sexy claims that they can make regarding those ingredients to promote their products.  However, it is important for companies to understand the differences in the regulation of ingredients for conventional foods, including beverages, and for dietary supplements as those differences can help determine the feasibility of using certain ingredients and the ultimate decision to sell a product as a conventional food or as a supplement.

Foods and Beverages

All ingredients intentionally added to a conventional food or beverage are considered food additives.  Food additives must either be approved through regulation by the Food and Drug Administration (“FDA”) as food additives, deemed GRAS (“Generally Recognized as Safe”) or otherwise exempted (such as color additives).  Approved food additives are identified in regulations set forth by the FDA; if an ingredient is not an approved food additive, an ingredient must be deemed GRAS to be legally used in a conventional food or beverage.  Some ingredients have been “preapproved” by FDA as GRAS in regulations; if an ingredient is not GRAS pursuant to a particular regulation or if the amount or use of an ingredient is outside the scope of a GRAS regulation, an ingredient still may be legally used in a conventional food or beverage product but a GRAS determination must be made.  GRAS status can be achieved by establishing an ingredient’s common use in food prior to January 1, 1958 or an ingredient may also be demonstrated to be GRAS if it is recognized, among qualified experts, as having been adequately shown through scientific procedures to be safe under the conditions of its intended use.  In such situations, a report, often called a “Self-affirmed GRAS Report,” must be compiled that details the specific amounts of the ingredient, the specific uses intended for the product, and the safety of the product.  The costs associated with hiring a company specializing in preparing a thorough “Self-affirmed GRAS Report” can run from $40,000 per ingredient to upwards of $75,000-$100,000 per ingredient.  Thus, if a product contains multiple ingredients that are not approved food additives or GRAS by regulation, the costs of assembling several Self-affirmed GRAS Reports can run several hundred-thousand dollars, making the classification of the intended product as a conventional food or beverage a very expensive proposition.

Dietary Supplements

On the flip side, ingredients in a dietary supplement are regulated differently.  Ingredients in a dietary supplement must be dietary ingredients, which include vitamins, minerals, herbs and botanicals, amino acids, dietary substances used to supplement the diet by increasing the total dietary intake, and concentrates, metabolites, constituents or extracts of any of the above categories.  If an ingredient meets one of the definitions of dietary ingredient and was used as a dietary ingredient prior to October 1994, no additional proof of safety is required.  However, if there is not proof of use as a dietary ingredient prior to October 1994 and the ingredient is not an approved food additive or GRAS, a New Dietary Ingredient (“NDI”) notification must be filed with the FDA.  The NDI notification must include evidence of safety for the intended use.  Due to the relatively cheaper alternative to the expenses incurred from one or more Self-affirmed GRAS Reports for foods and beverages, the supplement route has often been viewed as the cheaper route.  However, with the recent enforcement efforts from the FDA to enforce the manufacturing practices for dietary supplements, the costs incurred by dietary supplement companies to comply with these requirements have made the cost comparisons between conventional foods and dietary supplements much closer.

 Conclusion

As companies embark on their efforts to find the next “can’t miss” ingredient, careful analysis of the regulatory status for ingredients is vital.  If the new ingredient is not one that has been customarily consumed in food, the costs of including the ingredient or ingredients in a conventional food or beverage may outweigh the potential benefits received from attracting a new class of consumers.  Or, if the requirements are met, a company may decide to travel the supplement route instead.  Regardless of whether a company intends to ultimately market a product as a conventional food, beverage or dietary supplement, it is clear that considerations regarding the regulation of ingredients will play an important role in the ultimate decision. 

Justin J. Prochnow is an attorney and Shareholder in the Denver office of the international law firm of Greenberg Traurig LLP. His practice concentrates on legal issues affecting the food & beverage, dietary supplement and cosmetic industries. He can be reached at (303) 572-6562 or prochnowjj@gtlaw.com and he can be followed on Twitter at @LawguyJP.

This article is issued for informational purposes only and is not intended to be construed or used as general legal advice.  The opinions expressed are those of the author exclusively. 

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