Open innovation at BASF: ‘We want to move beyond the buzzwords'

But Jandali, a high-flier who took the helm of BASF’s new North American nutrition and health division last January after a pretty meteoric rise up the ranks, insists his firm really walks the talk when it comes to collaboration.

Think Newtrition: Walk the talk…​

Speaking to NutraIngredients-USA at the IFT show in Las Vegas, Jandali says there’s one phrase that holds special meaning at BASF: "customer-centric innovation​". 

He adds: “There is a lot of talk about open innovation, but we want to move beyond the buzzwords and really walk the talk, demonstrate real value to our customers.”​

One obvious example of this is the recent expansion of BASF’s food technology & applications center in Tarrytown, New York, which provides a clear signal to the market that BASF wants to work more closely with customers, he says.

“We want to have a different kind of communication with our customers, to collaborate with them. It’s about thinking business-to-consumer, but acting business-to-business.​

“So we are approaching customers with ideas that are based on market analysis and consumer research and demographics. They understand what we are trying to do and they open up. It’s the start of a dialogue, which is why we use the tagline ‘Welcome to our kitchen’. It’s about co-creating together.”​

Firing on all cylinders​

And with the integration of Cognis - purchased for an eye-watering €3.1bn in late 2010 - now complete, BASF is now firing on all cylinders with an expanded portfolio of health ingredients, concepts and formulations to discuss with customers, says Jandali.

“We have a very broad portfolio of essential micronutrients/vitamins, natural carotenoids, functional ingredients - including omega-3s, plant sterols and CLA​ [conjugated linoleic acid] - and food and beverage performance ingredients offering improved texture and mouthfeel.”​

Body-shaping and the Dr Oz effect​

New finished product concepts on offer at the IFT show demonstrate this breadth, from a coconut water featuring fat-busting TONALIN CLA to an energy drink featuring caffeine, B vitamins and carotenoids; heart-healthy ginger crisps with omega-3 fatty acids and vitamin D; gummies with phytosterols and lycopene, and 'toning' TONALIN CLA shots, says Jandali.

Weight management and healthy aging are key themes, while the desire for convenience and natural ingredients is also central when developing new concepts, he adds.

“We are looking at a range of new delivery systems for CLA so that people can easily incorporate it into their daily routine, whether in capsules, shots or a hydrating coconut water, for example.​

“Weight management is a clear growth area - the category is showing 7% compound annual growth - and we are well-positioned with TONALIN, as people are beginning to realize that it’s more important to reduce fat than to just lose weight. It’s all about body shape.”​

Unusually in the weight management segment, TONALIN CLA is also supported by solid human clinical data demonstrating its ability to reduce fat mass and increase lean muscle mass, and recently gained some extra kudos following a recent mention on Dr Oz, he adds.

Sustainability​

Another area where BASF feels it is starting to differentiate itself and achieve a competitive advantage is via its sustainability SET (sustainability, eco-efficiency, and traceability) program, which is “a lot more than carbon footprints”, ​he notes.

“We are looking at the value chain from end to end, identifying the ‘hot spots’ and sharing this information with our customers; ​together we identify hot spots with highest impact on sustainability and suggest​what​ to work on and prioritize, whether it’s energy or transportation costs to water use ​or even social aspects​.​

“They are also sharing this information with their customers/retailers, who are in turn sharing some of it with end consumers.”​

Traceability is also a key part of SET, he says: “If you have full traceability, you don’t have to recall 95% of your product if you have a problem, when only 5% of your stock might be affected.”​

On the acquisition trail…​

Jandali would not be drawn on the criteria for making further acquisitions, beyond saying BASF remains open to doing deals with companies that have ingredients supported by science, and has the funds available should “the right opportunity present itself”. ​

Meanwhile, its recent acquisition of high-end omega-3 producer Equateq shows BASF “puts its money where its mouth is​”, adds Jandali, who says Equateq’s proprietary chromatographic separation methods allow flexible formulation of omega-3s at “exceptional​” purity levels of up to 99%.

BASF is also bidding for a slice of the action in a new segment of the omega-3 market via a tie up with Cargill to commercialize a next-generation canola oil containing the long-chain omega-3s EPA and DHA by the end of the decade.

BASF Nutrition and Health​

The BASF Nutrition and Health Division - which comprises Human Nutrition, Animal Nutrition, Aroma Chemicals and Pharmaceutical Ingredients and Services - posted a "solid​" 1% rise in sales to €476m in the first quarter of 2012, although margins on vitamins were hit by "higher raw material costs which could not be passed on fully", ​said CFO Hans-Ulrich Engel.