Our taxonomy of the sector
Welcome to ThinkingLinking’s taxonomy: the first multi-dimensional taxonomy of the natural ingredients sector!
A 5D taxonomy for the sector
In linking natural ingredients companies, our M&A/JV/licensing advisory firm realized that partners care not just about the match on the ingredient dimension itself but many other factors as well. Not finding an existing useful taxonomy in the sector, we built our own around the key five considerations that kept on coming up in our work. This new taxonomy was initially for the ‘ThinkingLinking Natural Ingredients Database’, but we have decided to publish it, along with what we have been able to do with it in practice, so that clients can use it themselves and see the patterns it has revealed about the sector and the opportunity it provides to link partners more efficiently and successfully.
The taxonomy allows a product to be classified broadly enough to make strategic linking possible. Also, it allows the scale of the sector to be seen clearly in terms of its ‘territory’. Finally, the relationships between the origins (or sub-origins), processes (including process combinations), vertical markets and health benefits for each ingredient can be plotted and quantified using the taxonomy as a ‘backbone’. Health benefit is included as a dimension because of its importance, even though of course it doesn’t apply to all products.
Finally, the taxonomy has been tested against our database of 300 companies and overlaid on 628 of their products to make it useful for 5D linking purposes (see section ‘The power of the database’).
The elements of the 5 dimensions
Note:
“Functional ingredients": It is recognized that products can fall into an ingredient category as well as functional ingredients since the latter is in effect an additional dimension. However, taking into account ingredients companies often use the term “functional ingredients” in place of a technical ingredient category, we have included it as a category alongside the ingredient names and have generally classified products as the producer in question has. “Other Fat”: This is an abbreviation for other saturated fatty acids. “Mushrooms”: Mushrooms are included in the Plant origin category “Microorganisms”: Single-celled plants are excluded from the Plant origin category separated as Microorganisms. "Health benefits”: The health benefits are as claimed by the producer and we are not offering any opinion on their validity.
Testing the taxonomy
Our taxonomy has been used to classify the entire ThinkingLinking Natural Ingredients Database which is a database of real world natural ingredients companies and their products.
This process allowed us to ensure that it works in the sector. Moreover, we looked at the last 10% of the companies classified and found that they didn’t require any new categories or present any classification contradictions.
A multi-dimensional taxonomy can mathematically of course offer every permutation of its dimensions (in our case over 432,000 theoretical combinations). However, the real world permutations, which are limited by what is scientifically possible and further by what actually exists, number about 400. It is these 400 relationships that we have been able to present in this directory in visual form to describe the sector as it is. Future innovation of course can expand the number beyond 400 when a new product happens to make a different ingredient/sub- origin/process/vertical market/ health benefit combination. It should be noted, of course, that most innovation takes place within the existing configurations since the purpose of innovation is hardly to invent a new configuration.
The ‘territory’ of the sector and relationships between its five dimensions, as shown in the more complex charts later in the directory, are derived directly from the actual product classifications we have made as opposed to what is scientifically possible but which may not exist yet in the market. Put another way, every line in the link charts, or data represented in other charts, is backed up by a minimum of one actual product and its relationship picture as classified across the dimensions.