Reverse Vertical Integration: A New Trend?

Martek (Life’s DHA™), a well-known supplier of vegetarian omega-3 raw ingredients, announced on Jan. 21 the purchase of Amerifit Brands, a manufacturer of finished goods (Estroven®). The rationale given was because it provided a “platform for accelerating the commercialization of their nutritional product pipeline,” and allowed Martek to “move up the value chain by getting closer to the consumer.”

Is anyone else catching the significance of this event? It turns the traditional vertical integration supply model on its head—literally. Does this hint that powerful, branded proprietary ingredient suppliers are tired of waiting for co-branding partners to come a-courting? Why not just push their way into retail on the coattails of an acquired manufacturer?

I can’t say I am totally surprised by this turn of events. It does, however, signal a potential shift in strategy within the value chain, and has important repercussions for ingredient suppliers, retailers and ultimately the consumer. Stay tuned.