Industry Leaders Give Dietary Supplement Industry Outlook For The Next Two Years

The dietary supplement industry will likely witness changes in consumer activity and more emphasis on manufacturing standards within the next 18 to 24 months, according to some experts in the industry, who participated in a panel discussion, “Future View from the Top: Industry Leaders Forum on the Supplement Industry” on the final day of The Conference, the Council for Responsible Nutrition’s (CRN) annual symposium on dietary supplements, held this month at the Hyatt Regency Tamaya Resort & Spa in Santa Ana Pueblo, N.M. The panel discussion included Steve Mister, president and CEO, CRN, as moderator; Janice Binger, president, Natural Health & Nutrition Division, Archer Daniels Midland; Harvey Kamil, president and CFO, NBTY; and George Pontiakos, president and CEO, BI Nutraceuticals. Following are brief highlights of the panel discussion.

Prevention will be profitable

According to the panel, the current focus by the presidential candidates on preventative healthcare could help the dietary supplement industry gain consumer growth, particularly if that emphasis continues following the November elections. Mr. Pontiakos said that there will continue to be a change in how consumers perceive healthcare, stating, “I believe that we’ll see a growth in nutraceuticals over the next few years, in part, due to the [high] cost of pharmaceuticals. Consumers increasingly recognize that they own the responsibility of their healthcare.”

The panel participants also suggested that one of the greatest opportunities in the supplement industry is helping consumers and the medical community recognize that dietary supplements are mainstream, and are no longer “alternative” products, but rather are an integral part of health and wellness. According to Mr. Pontiakos, “Supplements are becoming more mainstream and medical professionals are becoming more comfortable with our industry.”

Ms. Binger agreed, saying, “It’s disappointing that [currently] we [our nation] don’t integrate nutrition into medical healthcare,” and recommended that this change in the future.

Slumping economy will shrink the number of companies

The panel experts agreed that the slumping economy will have the opposite effect in terms of growth on the number of dietary supplement companies in the marketplace. Mr. Kamil, whose company, NBTY, has grown over the past several years in part by purchasing other dietary supplement companies, noted the economy is already affecting the availability of financial capital. He added that consolidation will continue and that financial issues will also play a role in shrinking the number of companies manufacturing and marketing supplements, stating, “With the new good manufacturing practices (GMPs), as well as other financial pressures, we’ll see that many companies can’t handle the financial pressures and the industry will shrink in size.”

According to Mr. Pontiakos, it costs millions of dollars to maintain a laboratory to test ingredients that are used in dietary supplements. “From a raw materials standpoint, the market will contract aggressively. The next space to go under will be small contract manufacturing,” Mr. Pontiakos predicted.

Quality will continue to be a concern

The supplement industry has already taken steps to help ensure quality throughout the supply chain, including lobbying for publication of the final GMPs rule and for the new adverse event reporting (AER) law, and is spearheading (under the leadership of four supplement industry trade associations) the Standardized Information on Dietary Ingredients (SIDI™) protocol, a guideline to standardize and streamline the communication of information on raw ingredients from ingredient supplier to manufacturer. However, despite these efforts, the dietary supplement industry cannot become complacent when it comes to quality, warned the panel. Mr. Kamil pointed out that the entire dietary supplement industry is at the mercy of any one company, with responsible companies’ reputations potentially tarnished by rogue companies not abiding by laws and regulations. “We should all be concerned for product quality—we’re all in this together,” said Mr. Kamil, who also added that his company, NBTY, has already been inspected by FDA to ensure that they are meeting the GMP standards, now required by law, and passed the inspection.

Mr. Pontiakos agreed, stating, “Our customers come to us because we provide them with quality products. The biggest challenge I see in the market is that some [outliers] think that you can still get away with stuff.”

Ms. Binger noted that Archer Daniels Midland has taken extra precautions to ensure quality control. “Currently we are meeting Europe’s standards [for ingredients], which are based more on a pharmaceutical standard and therefore more rigorous than those in the U.S., so we’re exceeding the standards here.”

Communication will continue to be key

The next 18 to 24 months will hold many challenges and changes, as all industries adjust to a newly elected Congress and President. But communicating the benefits of our products to consumers, as well as to the media and healthcare professionals, needs to continue, said the panel.

Mr. Kamil noted that the messages from the “Life…supplemented” consumer education campaign have the most resonance. “We need to tell consumers, the media and healthcare professionals that we’re a responsible industry and our products are part of a healthy lifestyle. The products work.”

Ms. Binger agreed, stating, “We’re a responsible, regulated industry that adds to the health of consumers.”

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