The dietary supplement industry will face many opportunities and challenges within the coming year, according to leading industry executives, who participated in a panel discussion, “The View From The Top” on the final day of The Conference: CRN’s Annual Symposium for the Dietary Supplement Industry, held recently at the Terranea Resort in Rancho Palos Verdes, Ca. The panel discussion included moderator, Steve Mister, president and CEO, Council for Responsible Nutrition (CRN); Connie Barry, president and CEO, Pharmavite LLC; James Hyde, CEO, Albion Laboratories; and Douglas Lioon, executive chairman, Douglas Laboratories. Following are brief highlights of the panel discussion.
Economy is encouraging healthy behavior
According to the panel, the current state of the economy is having a positive impact on the dietary supplement industry. Consumers are continuing to utilize dietary supplements as an important part of their health program, said Ms. Barry. Mr. Lioon agreed, noting that though there has been robust growth in the dietary supplement business, the industry certainly does not take that for granted. “People are worried about themselves and their health. The year 2009 has been good for the dietary supplement industry; we look forward to 2010,” added Mr. Hyde.
Education will be key in coming years
Mr. Mister followed up on the economy question by asking the panelists what major consumer trends, other than consumers taking proactive control of their health, the dietary supplement industry can expect to see over the next year. Ms. Barry began by saying that she is starting to see a shift in company trends with more allocation of dollars going to consumer education, as consumers want to understand more about their health. She added that an educated consumer—one who understands the role dietary supplements play in health and wellness—leads to a consumer more willing to spend money on the products.
Mr. Lioon, whose company manufactures products for the healthcare professionals channel, noted that, “There is an abundance of information out there and consumers are demanding that information. We need to put out good products with clinically backed ingredients. The more science they see about supplements, the more they become believers.”
As follow-up to the education comments, Mr. Mister asked Mr. Hyde, whose company specializes in mineral supplement products, what some of the opportunities are for helping to communicate the benefits of mineral supplements to consumers. Mr. Hyde began by saying that consumers are confused and they don’t know what to believe, adding that Albion Laboratories, his company, spends a great deal of money on conducting clinical trials to help promote and sell their products. “The economy and state of healthcare has created an opportunity that our industry has never had before; it has created [an anxiousness for consumers] wanting to see dietary supplements work,” said Mr. Hyde.
Regulation will continue to rule the industry
The panel then shifted into discussions about regulation within the dietary supplement industry, including the good manufacturing practices (GMPs) specific to dietary supplements that are now in effect for the vast majority of the industry, with many of the large companies having already been inspected by the Food and Drug Administration (FDA) for compliance. Mr. Mister asked panelists whether the new regulations have changed their businesses.
Mr. Hyde answered that his company is not doing anything drastically different than they had already been doing, noting that they already had many GMP processes in place before the final guidance was issued. “We embrace the GMP regulations and use it as a strategic advantage,” said Mr. Hyde. “It is a few bad actors that give the industry a bad name.”
Mr. Lioon added that companies, such as his, who do business internationally, have to be cognizant of all the different regulations globally, making it necessary to raise the bar on all his products. “We have built a brand around quality,” said Mr. Lioon.
Ms. Barry added that her company was very prepared for the GMPs. She also noted that the fact that Joshua Sharfstein, M.D., principal deputy commissioner, FDA, was willing to speak at The Conference, was a good indication that the regulatory agency was open to collaboration and dialogue with the dietary supplement industry to help ensure high-quality, safe products for consumers. “That’s why I get up in the morning—to give consumers products that can benefit their lives,” said Ms. Barry.
The topic of food safety regulation was also discussed, with Mr. Mister noting that CRN had recently announced support of S. 510, the Senate’s bill for the FDA Food Safety and Modernization Act, which would include annual registration of facilities and mandatory recall authority for FDA. Mr. Mister asked panelists whether or not the passage of this legislation may have a large impact on the dietary supplement industry. Mr. Hyde responded that he couldn’t predict how big an impact this legislation, if passed, would have on the dietary supplement industry; however, he stated, “If there is a perception change in how the industry is regulated, then it is probably a good thing.”
Ms. Barry said she wished that Congress, FDA and the industry could use the tools that are already in place under the law before going forward with new legislation, but she also noted that she understands that food safety is a big issue which needs to be addressed.
New investors are inevitable for the industry
Mr. Mister then changed topics, asking panelists how new investors will be using capital and credit to enter the dietary supplement industry and what effect that will have on the industry as a whole. Mr. Lioon said that he has seen some investors that really get what the industry is all about and that is why they get into the business. However, he cautioned that, “There are two types of investors—the ones that get it and the others that are just looking to make an investment and profit quickly and flip their business.”
Mr. Hyde commented that there will be some companies looking for short-term profit, and not worrying about the long-term health of the industry. To counter this, he suggested we need to raise the bar and industry accountability so that there is a balance between the mentality of needing to be profitable this quarter versus wanting to grow things over the long-term. He urged companies to work hard to meet somewhere in the middle on these goals.
Words of wisdom for industry newcomers
Mr. Mister queried the panelists about the key advice they would offer a small company just entering into the dietary supplement industry. Mr. Hyde said that he would begin by advising start-up companies that they need to be prepared to work very hard. He also said that having a good platform and a strong foundation is essential to success.
Ms. Barry proposed that start-up companies need to have a clear vision of who they are because it is very easy to lose your way. “A core understanding and a commitment to quality will take them a long way,” she said.
Mr. Mister ended by asking the leading CEO’s what one thing keeps them up at night. Mr. Lioon noted that the fear of a new economic contaminant that finds its way into the supply chain is one of his biggest fears. He went on to encourage companies that see something that doesn’t make sense, to step up and raise their hands and report it. “We all need to take responsibility for, and protect, our own real estate,” he said.
Ms. Barry said that her biggest fear is that as an industry, she worries that we won’t take the opportunities for growth around us seriously, warning that companies who see growth must also strive to maintain responsibility. “I do feel that the industry we make today will set us up for the industry that we become in the future,” said Ms. Barry.
The panel and day ended with Mr. Mister thanking the panelists for their viewpoints, and telling conference attendees that contrary to the popular advertising campaign for Las Vegas, “I hope that what happens at Terranea does not stay at Terranea. I hope that you will take the things you have learned here this week back to your companies and implement what you have learned here.”
Note to Editor: The Council for Responsible Nutrition (CRN), founded in 1973, is a Washington, D.C.-based trade association representing dietary supplement manufacturers and ingredient suppliers. In addition to complying with a host of federal and state regulations governing dietary supplements in the areas of manufacturing, marketing, quality control and safety, our 70+ manufacturer and supplier members also agree to adhere to additional voluntary guidelines as well as CRN’s Code of Ethics. Visit www.crnusa.org.