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Balchem Discusses Growth Trajectory for Portfolio of Specialty Ingredients in Key Markets

Balchem Discusses Growth Trajectory for Portfolio of Specialty Ingredients in Key Markets

The company has bolstered its human nutrition and health unit with several strategic M&As.

02.03.23

Frederic Boned, Senior Vice President & General Manager, Human Nutrition & Health at Balchem discussed the company’s strategic transformation, recent M&As, capabilities, and its portfolio of science-based specialty ingredients for food, beverages, and nutraceuticals. An edited transcript follows below. 



Sean Moloughney, Editor of Nutraceuticals World (NW): Balchem has been around since 1967. But lately, the company seems to be redefining itself within the human nutrition and health industry. Can you tell us about that transition?

Frederic Boned, Senior Vice President & General Manager, Human Nutrition & Health at Balchem: Balchem has been on this incredible growth trajectory for more than a decade now, in particular, with the human nutrition business where they had this fantastic organic growth. But as well, you know, we completed a lot of M&As during that period in the U.S., with companies like IFP’s Sensory Effects, Albion® Minerals, and more recently, with Kappa Bioscience in Europe and Bergstrom.

So there's been a lot of activity, where we really transformed the organization and built what is a powerhouse today, with an incredibly strong portfolio of ingredients, and great capabilities, all rooted in deep science, which makes us who we are today as an unique supplier of high specialty ingredients for food, beverages, and nutraceuticals.

NW: Speaking of science, VitaCholine® had a big year, which included two new clinical studies published out of Cornell. You also received the NutraAward for ingredient of the year for cognitive function. Can you tell us more about that?

Boned: I think it was a great recognition, this NutraAward for cognitive health. It’s a great recognition for what is a great product—first of all a great ingredient—and for all the good science that we put around it to demonstrate its benefit for consumers.

So we started the year getting back to a study that was done years ago, actually around 2018, where it was published already from Cornell. Researchers demonstrated the benefit of choline when supplemented to pregnant women to basically drive better cognitive development for the babies. So that was a big highlight and a big finding to show that babies could receive supplementation through their mothers of choline, which showed elevated attention and focus and better what we call ‘information processing speed.’1

We knew there was this impact already for the first year of the babies. But what published last year was a study that came back to the same babies seven years later.2 And when we look at the same babies, they still have an advanced ability to process information and sustain attention.

So it means that supplementing pregnant women doesn’t only give short-term benefits to the babies in the first year of their life, but also sustained long-term benefits that are still there seven years later. So as a parent, it's an incredible finding. We were very proud of that. I think it's a great advancement, as well from a science perspective.

And we continued on that journey in middle of 2022 with a second study. This time researchers published the correlation of choline supplementation together with DHA, again for pregnant women. We know that DHA is an essential nutrient for brain development of babies and to reduce preterm births.3 But what we noticed is that when we also give choline more or less in a one to one ratio together with DHA, the level of DHA in the pregnant mother is also boosted and accelerated,4 and that was also a very strong finding. All of that led to us getting recognition and a lot of interest from both the brands, our customers, and also consumers.

NW: You have some other well-known branded ingredients in your portfolio, including Albion Minerals, K2VITAL®, and OptiMSM®. Can you speak to those?

Boned: The common denominators with all those products—the chelated minerals from Albion, OptiMSM, and K2—is that they are enhanced specialty ingredients with very strong benefits to consumers. And for all of these different ingredients, we always have a strong leadership position in the market. So that is a very unique position to be. A lot of it is driven by our acquisitions, by the way, the heritage that we got from Albion Minerals from Kappa, and Bergstrom.

If we look at chelate minerals, it's a very good example. These are products that offer a way better bioavailability and tolerability for consumers. So if you're a brand who wants high performance products, and better consumer experience, you would choose another mineral chelated over a basic mineral salt, so that you get way better performance for your end product and better experience for the consumer. So that drew a lot of demand and interest in the market, and therefore growth, for our portfolio of chelated minerals.

We experienced the same with the K2Vital, which is the brand of K2 that was brought to the market by Kappa, which is the leading brand today for K2 with a patented, high-purity all-trans form of K2 MK7 that got a lot of traction on the market, because the benefits to consumer, again, are very clear. And there's a lot of potential that we're still unveiling. So it's about immunity. It's about bone health. It's about cardiovascular health, which of course are big topics in the market today. And we continue to expand this business on K2 with some unique encapsulated forms that allow for better compatibility and application. So we are very excited about that now that we're also taking the Kappa portfolio and bringing that under the Balchem footprint to expand that business in the years to come.

And the last one is the acquisition of Bergstrom and OptiMSM, which is the only GRAS-approved version of MSM on the market with a lot of very trendy attributes for skin, nail, hair on the cosmetic side, and also mobility and joint health.

If you look at all those categories, they are all fast-growing double-digit growth categories in the market. We are very blessed to be able to play in those markets with a leadership position, and to try to expand that more internationally—from what was initially more of a U.S. based operation—toward a broader international play as we have evolved over time.

NW: Balchem seems to have a pretty strong focus on dietary supplements. Do you also see growth in food and beverage? Is that a priority for you?

Boned: That's an interesting point, Sean, because I joined Balchem with the same perspective that it was really a very strong, nutraceutical-oriented company. And I think the explanation for that is all the power brands that I've explained before: minerals, choline, K2, MSM, which get a lot of attention on the market. And therefore we tend to assume that it's mostly a dietary supplements strategy, and portfolio.

The reality is actually relatively different because the largest part of our business today in human nutrition is actually in food and beverage. So it's still a very large portion of our business. It’s mostly still a U.S. based food and ingredient business with a lot of customized solutions, total solutions that we offer to our customers, with lipid powder systems, with flavor systems, with encapsulated ingredients for challenging and intense applications, with inclusion textures and so on, cereal solutions that we offer to our customers. So we have a very broad portfolio of food and beverage ingredients and solutions.

We've been so successful recently in our strategy of acquisitions that’s been very much focused on dietary supplements and nutraceuticals. And that is getting a lot of attention. But we are way more than nutraceuticals indeed from the portfolio, but also from the capabilities and footprint that we have today.

NW: Well there’s certainly a lot happening at Balchem and we look forward to what’s ahead for you. Frederic, thanks so much for sharing your time and insight.

Boned: Thanks, Sean. It’s a pleasure.


References

1. Caudill MA, et al., FASEB J 2018; 32(4): 2172-2180
2. Bahnfleth CL, et al., FASEB J 2022; 36(1): e22054.
3. Middleton P, et al., Cochrane Database Syst Rev 2018 Nov 15; 11(11): CD003402.
4. Klatt KC et al., Am J Clin Nutr 2022; 116(3): 820-832.

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