Premium ingredients and commodity ingredients: There's no "versus" needed

Brands are working hard to bridge the gap between premium ingredients and commodity ingredients affordable for consumers.

James J. Gormley, Founder

May 30, 2014

2 Min Read
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First off, what are “premium ingredients”? The term is so broadly used that the lines between intrinsic value and marketing speak do, at times become blurred.

Premium can mean any of these things, and more:

  • A very pure or high quality source

  • An ingredient that has a “value-added” quality associated with it, such as a unique manufacturing, fermentation, purification or refining process, often protected by patents

  • Ingredient compounds protected by composition of matter patents or use patents for a given application

  • A unique delivery form, usually for enhanced absorption and bioavailability, ergo efficacy

  • A proprietary blend (although this is highly debatable as to whether proprietary makes it premium: see below.)

If you want to use or develop a premium nutritional ingredient, what considerations are involved?

Here are some bad reasons not to use or source a premium ingredient:

  1. I just want to be able to charge more money and make better margins.

  2. I only want to differentiate my finished product from competitors’ products.

  3. I want to hide poor-quality or filler ingredients under a “proprietary blend” shield.

Here are some good reasons to use or source a premium ingredient:

  1. I want to provide the most effective product I can, matching wherever possible the dosages and ingredient forms used in clinical studies.

  2. I want to provide consumers with maximum value.

  3. I want to utilize ingredients produced via technologies that developers have invested millions of dollars in.

As to the cost burden on consumers, in cases where there is a very high price point thanks to the use of premium ingredients, Michael Lelah, technical director for Bloomingdale, IL-based NOW Foods: says: “Yes, consumers ultimately decide, and we work hard to bridge the gap between commodity and premium ingredients for and on behalf of the consumer.”

Noting that NOW Foods, for example, tries to provide premium ingredients wherever possible, “There are times when we can’t justify the high price of a premium ingredient based on its increased benefit, and we are not prepared to pass this on to the consumer.”

As to the question of economic adulteration hiding behind the “proprietary blend” aegis, Lelah notes: “We believe in full transparency on our labels. All our nutritional ingredient amounts are declared on our labels and we in most cases declare the potency of the ingredient or key botanical marker, so the consumer knows what they are purchasing.”

I would imagine that other companies share NOW Foods’ way of approaching the question of premium versus commodity. In addition Federal cGMPs are starting to level the playing field between premium and commodity ingredients, as well.

So there you have it: when it makes sense, doesn’t create an unreasonable price point, and is utilized for the right reasons, premium ingredients can be a great choice. That being said, since the quality of U.S. commodity ingredients is rising every day, these ingredients can serve as the foundation for formulas, with premium ingredients added for specific applications.

About the Author(s)

James J. Gormley

Founder, Gormley NPI Consulting

James Gormley is an award-winning health and medical writer, editor and author and the head of Gormley NPI Consulting. He wrote the Supplement Insights column for Natural Products Insider from 2011-2017, and also served as editor-in-chief of Better Nutrition magazine and editorial director for VRM Media. Gormley is a writer and consultant for natural products industry companies and magazines.

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