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How the botanicals industry may benefit
Only a matter of months have passed since COVID-19 effectively pressed “pause” on life as we’d known it. Yet the disease’s upending of institutions, economies, and industries—to say nothing of individuals’ health—has been so dramatic that it’s hard to remember what “normal” life as we’d known it was like.
Unless, that is, you’re in the botanicals business. As Shaheen Majeed, president worldwide, Sabinsa (East Windsor, NJ), puts it, “Conventional wisdom says that COVID-19 changed everything. Except the pandemic’s impact still hasn’t hit our sector badly.” Government decisions deeming the industry essential, added atop heightened demand for herbal-based supplements purported to boost immunity, have kept botanical companies busy.
And if these companies manage the pandemic’s continued upheavals successfully, they may stay busy long after normal life returns.
Stressful New World
It’s impossible not to appreciate the gravity of the coronavirus’s depredations, no matter the business you’re in. As Ramon Luna, marketing coordinator, Ecuadorian Rainforest LLC (Clifton, NJ), notes, “COVID-19 has been a tragic event for several industries. It’s upsetting to see how it’s ravaged our way of life and forced us to adapt to a new way of being.”
That said, he, too, has noticed a botanical boost amidst the gloom. “We’ve seen great growth specifically in immunity, energy, relaxation, and sleep support categories—which makes sense, given that consumers are adjusting to a new world fraught with fear and stress.”
Brian Appell, director, global communications, OmniActive Health Technologies (Morristown, NJ), agrees, ticking off some of the stressors that bedevil this new world: “self-isolation, working from home, managing an at-home family, less activity—coupled with more eating!”
All have turned frazzled consumers toward products that address immunity and sleep support, as well as others concerns like stress management, weight management, metabolic health, and active wellness, he says.
But immune health, industry insiders believe, has emerged as the real winner here. “Immunity is surging across products,” Appell says, “from vitamin C to more specialized formulas. And while no one could have predicted COVID’s impact on the supply of immunity products specifically, the industry’s been quick to respond and meet the demand.”
Majeed also notices the “emphasis on immune benefits,” adding that Sabinsa had been underscoring botanicals’ role in promoting immunity well before the current crisis. But now the company’s turning up the volume on that message, he says, “providing studies that validate our products’ immune benefits, including clinical studies that show our Curcumin C3 Complex supports immune function and counteracts inflammation, a component of the COVID-19 disease.”
Consumers are seizing upon those benefits and others as a self-empowering hedge against the unpredictable nature of the COVID-19 threat, and they’re looking for any tools they can find—including diet and supplementation—to exert some control over their health.
As Appell says, “They’re reassessing their supplement regimens to align them more with long-term wellness goals. Even seasonal users are becoming more steadfast with their supplementation.” The reason: “I think it speaks to a larger truth that consumers are reexamining what health means to them and how they can live a healthier life,” he says.
Francesca de Rensis, marketing director, Indena S.p.A. (Milan, Italy), thinks COVID-19 has shaken consumers’ confidence in institutions—particularly, in the ability of both government authorities and healthcare systems to adequately provide healthcare services.
“Under these circumstances, individuals have become more proactive, passionate, and dedicated to self-care,” she says. “Personal health has become top of mind, and each of us is making new health choices—from socially distancing to wearing masks—every day.”
Whatever their choices, she says, “The shift toward greater self-care is positive for the industry’s long-term growth. Indeed, since the beginning of the self-care movement, the dietary supplement industry has benefited, and the pandemic has made taking charge of our own health even more important.”
But the pandemic has also made the smooth flow of ingredients from source to supplement manufacturer equally important so that consumers can ultimately access the products they demand.
Unfortunately, a principal “side effect” of the illness has been the complication of the very supply-chain and sourcing dynamics that would otherwise ensure that smooth flow. This has been particularly worrisome with respect to botanicals, which can grow in some pretty remote regions around the globe. And like consumers themselves, those regions and sourcing dynamics haven’t been immune to the pandemic’s fallout.
“COVID’s implications on supply chains have become more apparent as the pandemic’s steadily taken hold in India and other countries where a majority of botanical raw materials are sourced,” Appell says.
Majeed adds that some crops—tulsi (Ocimum sanctum), bacopa (Bacopa monnieri), and gotu kola (Centella asiatica)—“are less abundant than usual due to a shortfall in labor for timely harvesting, processing, and transporting.”
Sabinsa’s pre-inventory planning allowed it to avert any acute botanical-ingredient shortfall, he continues, but if growth in botanical demand continues at the current rate, “We may see permit-based limits on procurement of some key raw materials, especially those collected from the wild.”
Luna agrees that “logistics have been a challenge.” Port closures and short-staffed operations haven’t helped, either, as at-home consumers order more online and burden an already-strained system. But “while this can cause delays and be stressful,” he says, “it’s been manageable.”
That’s because supply-chain disruptions “shocked” manufacturers into finding suppliers with decades of experience in the industry, proven sourcing records, and strong relationships with botanical growers able to weather COVID-19’s disruptions, he says. “These qualities help supply meet market demand so that manufacturers don’t lose business, so for us, it’s been business as usual.”
De Rensis notes that because Indena’s headquarters are in Italy—an early hotspot hit hard by COVID-19—“we had to plan and adapt quickly to maintain supply chains. We communicated with our botanical growers and suppliers as soon as possible to limit any disruptions in supply.”
India took almost as big a blow, which, given its role as a major botanical origin, forced companies to mobilize quickly to safeguard supply continuity. Fortunately, Majeed says, “India’s government is aware of the importance of the herbal industry and has been very supportive.”
While securing the needed border-crossing passes, maintaining processing-plant operations, and resolving logistical problems related to labor and driver shortages “takes a lot of time and resources,” Majeed continues, “we’ve been agile and inventive in those areas beset with lockdowns, social distancing, reduced air-freight capacity, and other unexpected challenges.”
And that, he says, is why Sabinsa’s been able to stay operational worldwide. “Like everyone right now, we’re figuring out how to do everything differently,” he says. “We’re monitoring new information as situations evolve so we can adapt procedures to keep people safe and healthy.”
OmniActive also got ahead of the chaos early, Appell says, establishing an internal rapid-action taskforce across management, procurement, agriculture, legal, production, and R&D departments to support customers and provide an all-important first response during India’s shutdown.
Working directly with the Indian government, the company obtained classification as an “essential” business—which helped keep its supply chain flowing—and prioritized and expedited decision-making as well as customs clearance of essential products.
“Because our manufacturing units are in three locations,” Appell adds, “we were able to maintain operational capacity in compliance with safety protocols, despite restrictions on people’s and vehicle movement.” With inventory warehoused across the company’s global markets, OmniActive’s supply chain was also somewhat insulated from shipping restrictions.
Finally, as a vertically integrated company, he says, they’ve already started planting crops, like marigold, and continue to support their farmers.
And at Draco Natural Products (San Jose, CA), Brien Quirk, director of R&D, reports that supply disruptions on his end are nowhere to be found. “There’s been more scarcity of rhodiola, but that was related to geopolitical issues that were going on well before COVID,” he says. “And there have been widespread shortages of echinacea for consumer products—but we haven’t had supply issues obtaining the raw botanical in our extract manufacturing from China.”
Even the turmeric shortages stemming from India’s lockdown haven’t plagued the company, as its China-grown raw-material chains have been strong, Quirk says. “And in my personal consumption, I haven’t seen any reduction in product availability on the market.”
So botanical professionals can take a victory lap for so far averting the big supply-chain disasters that could have descended had they not been so well prepared.
But it had better be a quick turn around the track, because brands also have to consider the door that COVID-19 opens to increased botanical adulteration.
“Adulteration has been an industry issue for some time,” de Rensis says, “and greater demand due to COVID-19 made it attractive for some companies to sell adulterated ingredients.”
An understandably distracted FDA also increases the opportunity for shenanigans, Appell adds. “But many of the industry’s stalwarts, like the United Natural Products Alliance, the Council for Responsible Nutrition, and the American Botanical Council, have been proactively monitoring and creating awareness around adulteration,” he says. “This hypervigilance, coupled with increased product testing by responsible finished-foods manufacturers, is appropriate and will help ensure the safety and benefits that consumers expect.”
All of which has made COVID-19 something of a “stress test” for industry initiatives to stay on the up-and-up, Appell says. “And I believe we have performed fairly well as a company and an industry,” he declares. “You can be sure that any gaps in those initiatives have been addressed and will only make for a strong botanical supply chain going forward.”