“Supplement GMPs are being more tightly enforced, but also the Food Safety and Modernization Act is going to cause a better need for transparency for all incoming global raw materials for the food industry, which will also include all supplement ingredients,” said NSF’s Wyszumiala.

The Solution: Traceability The chief benefits of supply-chain security are the ability to trace materials back to their source, coupled with the confidence of having a back-up plan in place to circumvent unforeseen supply issues.

When sourcing from China, yes, China is cheaper, but testing costs remain the same. But there are other costs to consider, and not paying attention to these other considerations could cost you big-time down the road.

Economic adulteration

The risk of economic adulteration looms large in the calculus of whether it makes sense to source ingredients in China or elsewhere. In some ingredient sectors, there is little choice; China owns the market in vitamin C, for example, with almost the entire world supply being manufactured in that country.

Some in the industry, though, see focusing on China per se as a non-issue, or a red herring at best.

George Pontiakos, CEO of BI Nutraceuticals is one. Whether a supplier chooses to adulterate a product, or whether a buyer chooses to collude in that process is a moral issue, he has long maintained, and has little to do with where the business is being conducted.

“Companies of a similar culture tend to come together,” he said.

Sourcing responsibly

That being said, there are some significant hurdles to jump through if a U.S. company is committed to doing business in Asia the right way. Supply chain transparency demands that suppliers and manufacturers be absolutely certain of where an ingredient came from, how it was produced and under what quality conditions, and where the raw material came from. How best to do that in a country like China or India?

There is little substitute for boots on the ground. A robust documentation stream is a good start, but it’s a slender reed to lean on without actually seeing the facility where the ingredients are made and talking with the people who made the ingredients and generated the documents.

“The days are gone when you just looked at the [Certificate of Analysis] and approved a product,” said Shaheen Majeed, marketing director of Sabinsa.

Top 3 China supply tips

This is an excerpt from the concise, new, 22-page Nutrition Business Journal | Engredea report: “The Fear Report 2013-14: Dietary supplement industry executives’ top 10 concerns, and how to manage them for a better industry.” For more information, go here.