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These days, you can’t be in the supplement biz without being in the transparency biz. Or the traceability one.
These days, you can’t be in the supplement biz without being in the transparency biz. Or the traceability one. Or the supply-chain one, either. That’s because the complexities of a global marketplace have shone a light on our industry’s need to…well, shine a light on how we source and produce supplement products-and to do so before someone else does it for us.
A handful of unfortunate but high-profile quality breaches have converged with consumers’ expanding appetites for and access to information to remind us-as if we needed it-that our business is, in a very real way, the public’s business. And as far as Brent Bauer, marketing, food issues and sustainability leader, Cargill (Minneapolis), is concerned, we should’ve seen it coming.
“As labels become cleaner,” he says, “and as consumers grow more satisfied that the ingredients in the products they buy are what they wish them to be, the conversation will move increasingly toward factors that fall under the umbrella of transparency.” That’s a big umbrella, covering everything from ingredient identity and origin to fair treatment of labor. But it’s an umbrella that supplement brands and suppliers will have to hold high. For, as Bauer says, “We don’t expect consumer demand for transparency to subside; in fact, we think it’ll only grow in intensity and specificity as the years unfold.”
Pulling the Trigger
Ask industry insiders what they think triggered the tilt toward transparency and you’ll hear a variety of theories. But one view all share is this: “We’ve seen the trend building for several years,” says TimothÃ©e Olagne, U.S. marketing director for health and nutrition, Naturex (Avignon, France). “This isn’t something that’s completely new.”
A key turning point in the trend’s progression came in 2015, when the office of New York State Attorney General Eric T. Schneiderman revealed the results of an investigation-some would call it a sting operation-into supplement industry practices. DNA barcoding of supplements sold at four major retailers revealed not only that some contained few of the botanicals listed on their labels, but that others actually contained contaminants, as well.
Not surprisingly, the story took off, and the resulting publicity lit a fire under an industry already aware of the reputational risk such a scandal posed. “Although some of us had been talking about transparency for a very long time,” says Shaheen Majeed, marketing director, Sabinsa (East Windsor, NJ), “when the New York attorney general took action against some large supplement retailers and the media headlined the story from coast to coast, the industry woke up and started focusing on the need to do things right-and to talk about it in terms of transparency.”
Further momentum came from pending implementation of FDA’s New Dietary Ingredient (NDI) and Food Safety Modernization Act (FSMA) regulations. And at least in the food sector, Bauer says, another catalyst has been the raft of GMO-labeling referenda on ballots in several localities. “Those provided transparency advocates a high-profile vehicle to express their views within the context of, arguably, one of the most emotive subjects in the agro-food industry,” he says. “That really turned the flywheel, in my opinion.”
Consumers in Control
Of course, any time events call into question-for good reason or not-the safety of what we put in our bodies, it’s bound to stir up emotions. And supplement users are as liable to emotional stirring as anyone else.
That’s why Sandra Gillot, CEO, Benexia (Santiago, Chile), believes industry would be wise “not to underestimate the attention and knowledge of today’s consumers”-the same consumers who, to a great extent, are driving the move toward transparency. “They can and will be very vocal about a product they feel isn’t living up to its label claims,” she says, “and they’ll never trust that brand again.”
Fear is hardly their only motivator for digging into supplements’ backstories. “Consumers are passionate about nutrition and what they eat,” says Olagne. Because it reflects so deeply who we are, he adds, “people really look for information about food and nutrition and want to know more. And now that they have a voice through social media, brands know that they’ll use it.”
Nowhere to Hide
And how. The Internet and social media have “completely revolutionized” consumers’ exposure to transparency developments, says Vincent Tricarico, vice president of contract manufacturing, NutraScience Labs (Farmingdale, NY). “Whether it’s via something like a digital community of likeminded consumers, a brand’s social media accounts, or a local or federal organization’s official website, those who wish to remain informed have more power than ever when it comes to deciding which stories or issues remain in the spotlight.”
That informational access can cut both ways for supplement brands: It leaves them nowhere to hide if they fall short on commitments, but it also gives them a louder megaphone for spreading good news when they do. As Tricarico says, social media and digital technologies “have increased the ways in which a supplement brand can interact with its customers-or prospective customers-tenfold. Whether it’s by means of an on-label QR code or a live-streamed question-and-answer session, companies looking to keep their customers engaged and informed on sourcing and traceability can choose from dozens of options.”
What Consumers Want…to Know
Which raises the question of what consumers want to learn when engaging brands about transparency. Bauer notes that a Hartmann Group survey of 1,800 consumers found transparency to be “driven by clarity around ingredients, sourcing and production practices, and social criteria,” he says. At a rate of 64%, consumers were most interested in learning about ingredients themselves, while just under half cited factors including how products are manufactured, how companies treat animals along the way, where companies do their sourcing, and how they manage labor practices and environmental impact. “All of these have varying degrees of importance,” Bauer says.
Declarations of organic, non-GMO, and “natural” identity also come into play, with certifying agencies eager to help brands prove their inputs’ bona fides. And today’s consumers demand “purpose-driven products,” adds Steve Holtby, president and CEO, Soft Gel Technologies Inc. (Commerce, CA)-even in the supplement aisle. “That means they want to buy sustainable and eco-conscious products from companies whose values are most like their own.”
But when you get down to it, consumers’ demands for transparency stem from their desire to know that the products they buy for themselves and their families are safe. They don’t need to know all the details, Bauer says, but “they want access to information how, when and where they want it. And they don’t want technical jargon.”
Tough Row to Hoe
Alas, there’s no shortage of jargon in the pursuit of transparency-or at least no shortage of arcane words describing complicated practices. That’s because achieving transparency is itself arcane and complicated, as companies are learning in their attempts to trace ingredients from seed to shelf.
Notes Chris Oesterheld, executive vice president, Jiaherb Inc. (Pine Brook, NJ), the fact that most crude raw material going into supplements is wildcrafted from multiple locations rather than farmed on a single plot makes achieving transparency even harder. “For example,” he explains, “Rhodiola rosea root grows wild, high in the northern mountains of China. Its harvest involves various self-employed ‘pickers’ scouring the landscape and filling burlap sacks with Rhodiola rosea roots. Then they go to a local broker who gathers from various pickers, and those brokers ultimately sell to a manufacturer of botanicals. It’s easy to trace crude materials that are harvested from a specific farm, but wildcrafted materials present a true challenge.”
As do some of the costs associated with ensuring traceability and transparency. Yet, says Majeed, “There’s a disconnect between wanting transparency and traceability, and buying by price.”
Guy Woodman, general manager, Euromed (Presto, PA), agrees. “Buyers dictate the level of ingredient traceability required and, subsequently, the investments that suppliers will make,” he says. But sound agriculture, cultivation, and harvesting practices “require additional financial investments, and brand marketers need to recognize the value of this stewardship in providing botanical ingredient quality to consumers. When companies focus only on price, suppliers have to cut corners somewhere and certainly reduce their investment in quality control.”
Fortunately, consumers in the natural and organic channels have demonstrated a willingness to bear the costs of quality, says Olagne. “The biggest question remains with the mass market,” he concludes. “Are consumers in the mass market ready to ‘digest the pill?’ This we don’t yet know. But we do know that mass-market customers are asking questions, as well.”
Need to Know
As well they should. Woodman believes that transparency “is more than just saying you have documentation available; it’s actually providing evidence of this.” Supplement makers can “cut through the veneer” of traceability, he says, if they “drill down deeper to determine the supplier’s level of knowledge about the products they’re working with.”
This means asking about country of origin for botanicals, the harvest season, the method of species identification, and testing results. Ask to see a spec sheet for both the plant material and the extract, Woodman emphasizes. When customers ask this of his own products, the company provides a “full spec sheet, including minimum chemistry content for the plant material we extract,” he says. “This ensures product quality and consistency because the manufacturer can test using the same lab methods as we do and receive our lab test results, as well.”
Majeed adds that for branded ingredients, customers should ask to see published research on their efficacy, and make sure that the ingredients don’t infringe on anyone else’s patents. And Holtby adds that brands should keep shining transparency’s light at the contract manufacturing stage, too, performing regular audits “on a timetable that’s consistent with their buying habits-i.e. at least annually if not more often,” he says. “Look at batch records and raw-material certificates of analysis and, most importantly, make sure they’re doing all the testing required by the GMPs. Manufacturers can save a lot of money if they’re not doing all the required testing; if a quote looks too good to be true, there’s probably a reason.”
Supplement brands are better positioned than consumers not only to attain this information, but to interpret it accurately, as well. As Majeed points out, “The difference between consumers and the industry is that we know where the vulnerabilities are. So the question becomes, ‘Are companies focused on doing just enough to use transparency claims in their marketing, or are they truly demonstrating best practices?’”
To hear Tricarico tell it, it’s the latter. “From what we’ve seen, some of the most significant turning points in the conversation concerning transparency and traceability in our industry have come as actions that industry players have taken themselves,” he says. Pointing to initiatives like the Council for Responsible Nutrition’s (CRN; Washington, DC) Supplement OWL-an online wellness library and supplement registry-he applauds the work of industry advocates. “At the same time,” he adds, “we’re seeing an increase in the number of individual supplement manufacturers, companies, and brands making the effort to take responsibility for the transparency and traceability of their processes, and improve the ease with which consumers can gain access to this information.”
Which is a smart idea all around. After all, says Cargill’s Bauer, “We’re in this together. If you’re listening to your consumer and engaged in understanding what they’re looking for, you could argue that the marketplace will reward you for that. And in that situation, it’s an ecosystem between the consumer, the brand, and the supply chain because we can’t do it without each other.”
Sidebar: Putting Principles into Practice
How supplement suppliers and manufacturers are “doing” transparency
Supplement brands, suppliers, and contract manufacturers all understand that supply “chain” isn’t just a metaphor. Each party really does occupy a link that, only when firmly connected to the others, delivers supplements safely, traceably, and transparently to consumers. So here’s what several of those links are doing to keep that chain locked tight.
Sandra Gillot, CEO, Benexia (Santiago, Chile)
Her company, a vertically integrated source of chia seed powders and oils, demonstrates its commitment to sustainable sourcing with its sustainable-farming certification from GLOBALG.A.P., which guarantees no-till farming, crop rotation, natural soil nutrition, agrochemical control, manual plague and weed control, technological innovation, and “traceability from the field to the plate,” she says. In addition, they analyze each seed batch via internal and external testing for moisture, microbial load, purity, toxins, and agrochemical residue on the entire lot.
Chris Oesterheld, executive vice president, Jiaherb Inc. (Pine Brook, NJ)
Oesterheld claims that his company “was one of the first manufacturers” to use HPTLC testing-high-performance thin-layer chromatography-for botanicals. But just as important is its commitment to on-the-ground sourcing. “We have the ability to be there in the fields or countryside firsthand to confirm macroscopically that we’re starting with the correct species of crude raw material,” he says. “Then, in the lab, we confirm through HPTLC both for the crude raw material and finished extract powder.” While they’ve increased the amount of DNA testing they do, “we still feel strongly about the accuracy HPTLC testing offers.” And sensing the “strong push for clearer and more accurate information” on ingredients, Jiaherb created its HerbaLink program, an “efficient way of presenting all this information in a single document packet showing each link in the supply chain from plant to finished powder or extract,” Oesterheld says.
Guy Woodman, general manager, Euromed (Presto, PA)
Woodman believes his company is “well positioned” to demonstrate transparency with a supplier certification and qualification program applied to all botanical ingredients it purchases. The firm has a full-time staff agronomist “who oversees and establishes the global cultivation of different medicinal plant species,” he adds, and it provides other support like efficacy and stability studies, extract-dissolution test results, and species testing via DNA analysis. Euromed also introduced its Phyto-Proof quality-control process to boost consumer confidence in its products. “Every batch of extract undergoes a minimum 20 laboratory tests beginning with the farm-grown or wildcrafted plant all the way to the finished extract,” Woodman says. And retailers benefit by knowing that the ingredients “are verified for purity, potency, and plant identity.”
Steve Holtby, president and CEO, Soft Gel Technologies Inc. (Commerce, CA)
As a contract manufacturer of softgels, Holtby sees the connection between transparency and a strict adherence to GMPs. That being the case, he says, “Our QA department monitors quality throughout the manufacturing process. We maintain complete, detailed batch records for traceability purposes and ensure that we’re GMP compliant so that we keep our certifications. In fact, some of our customers require us to undergo periodic internal and third-party audits to confirm GMP compliance.” And because “it’s common for distributors of raw ingredients not to perform all necessary testing,” he adds, “in those cases we would perform or arrange for the testing ourselves”-providing not just standard analysis of finished softgels, but also extensive testing on raw materials for identity, potency, and contaminants.
Brent Bauer, marketing, food issues andsustainability leader, Cargill (Minneapolis)
With demand for non-GMO ingredients growing, Cargill launched its Known Origins GMO tracing program in March, 2017, covering non-GMO and corn and soybeans produced in North America and high-oleic canola seeds produced in Australia. The program allows the company to identify each farmer in the non-GMO producer program, and while it’s been a big shift for industry, “in some cases, we’re able to work with our customers to create supply chains that enable not only the ability to draw specific connections back to individual farmers, but also to explore improvements in on-farm practices that address sustainability drivers,” Bauer says. In the end, he believes, “The more that consumers place value in understanding supply-chain dynamics, the more brands and their supply-chain partners will respond and put in place the mechanisms to explain.”