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How are ingredient suppliers sourcing the most in-demand vitamins?
In the many months since COVID-19’s arrival, Nutritional Outlook has reported on countless different impacts that the pandemic has had on the dietary supplement, health food, and beverage industries. Some ingredients have seen decreased demand while others dramatically rose in sales. But to capitalize on increased demand requires partnerships with ingredient suppliers that have longstanding raw material partnerships in place and are nimble enough to react to shortages of raw materials.
Naturally, interest in certain vitamins grew during the last year. This is due to rising concerns relating to COVID-19 and to a flurry of press and social media guiding consumers towards specific vitamins. After a year of living with COVID-19, are supplies of key vitamins still in jeopardy? Well, it may depend on your supplier and the actions being taken.
Immune Growth, But Also General Growth Maybe
Not surprisingly, the global vitamin trade has been hit with supply troubles relating to immune-health vitamins in particular. Vitamins C and D are very much in demand, and the combined issue of increased demand and uncertain supply is reported by many companies. Prinova (Hanover Park, IL), which attests to owning 33% of the total market share for vitamin C in the United States, reports various procurement challenges for vitamin C in particular right now and an increased demand for vitamin D.
While Prinova claims that its supply of other vitamins has not been impacted in the same way, this likely isn’t the case for all suppliers. Lief Labs (Valencia, CA) has had to handle its own procurement issues relating to immune-health vitamins, but COVID-19 is also impacting the company’s business in other vitamins. It’s not alone. In its 2020 Supplement Business Report, Nutrition Business Journal reported significant increases in sales last year of multivitamins, melatonin, digestive aids, and other products, all of which can be attributed to COVID-19 concerns in the general public. It’s not shocking, considering that health and wellness spending is often prioritized in times of recession.
Strengthening Supply Chains
In the face of increased demand for immune-health vitamins, ingredient suppliers have had to act strategically in order to meet the needs of existing customers and still have enough left for any new customers that may want to trial products in the marketplace. Rising demand for these ingredients is compounded by congestion at ports, a reduced work force at ports, and longer transit times for container shipments.
Since the onset of COVID-19, when it first started to encounter challenges in procuring immune-health vitamins, Lief Labs decided to bolster its supplier network by adding suppliers from South America, Europe, and other parts of the world to protect its primary supply, which was coming from China. While the company is still seeing supply shortages, Lief Labs says business is much more secure now that it has mitigated this threat to the supply chain.
Like Lief Labs, Prinova relies on China for its vitamin C and D3 ingredients. Prinova reportedly holds very large buffer stocks of vitamins C and D3, which are especially useful now that customers are asking for early shipments of their 2021 contracts due to increased product demand. Meanwhile, Prinova Vice President Steve Watts notes that, in addition to rising freight costs and the longer transit times, the price for Chinese ascorbic acid tripled in January. Another COVID outbreak in China, such as that experienced this February in the city of Shijiazhuang or from Chinese New Year celebrations in February, could make the situation even more precarious.
The uncertainty of vitamin procurement during COVID-19 underscores the importance of working with veteran companies that are capable of adapting to changing global circumstances.
COVID Vaccinations and the Future
The prospect of global COVID-19 vaccinations and a return to normal life makes us wonder if the immune-health sales boom will soon regress.
Prinova expects continued strong demand for its vitamin C and vitamin D3 in the first half of 2021. “The demand will remain strong, and if we get issues on the supply side then prices could escalate even higher in the April/May 2021 period,” says Watts. “However, we do forecast that as the vaccination programs start to have an impact on the virus in Q2 2021, then this is likely to take some heat out of the demand for immunity products and could lead to a weakening of price in the second half of 2021.” Similarly, Lief Labs is approaching 2021 with the same vigor as last year but will monitor demand for potential demand changes and potentially shifting interests to other products towards the end of the year.