Editorial: It's "Certainly" September in the Natural Products Industry

By Len Monheit

As we move into show season this year, more than a few companies I’ve spoken with are doing so with a bit of hesitation and uncertainty. As the cost of compliance with new legislation starts to make itself felt on 2008 bottom lines, companies appear to be weighing options – whether this is the time to pursue that foray into functional beverages or whether this is the time to drive into consumer mindshare. Is this the time to change sourcing practices and cement supplier relations in order to better compete in the new regulatory environment? Is this the time to launch that new ingredient processing technology?

September, always a rather frantic month, now has a couple of added dimensions to keep it interesting. As companies prepare for a busy fall show schedule and the usual litany of budgets, plans and strategies, this added complexity appears to be having a subtle effect on companies’ approach to the market with a new conservatism – at least in the mainstream supplements arena. The conservatism can’t last though, and probably shouldn’t, with those confident and poised to take advantage of the emerging environment already well positioned and ahead of those who had not paid any attention to market and regulatory dynamics.

That some companies have been preparing is obvious. With the new GMPs essentially forbidding irradiation of botanicals, farseeing supplement (and many food) companies had been seeking suppliers who could offer viable alternatives. Last week’s UNPA-led and Capsugel sponsored GMP seminar including an entire presentation on the subject by Joseph Brinckman of Traditional Medicinals, who commented on the limitations under the new GMP regulation and noted possible solutions put forth by ingredient companies BDS Natural Products and BI Nutraceuticals.

Another general activity for which evidence is emerging is companies taking steps to more proactively secure their supply chains as they position for the future. The most recent example of that tactic is an announcement from earlier today:

“A.M. Todd Botanical Therapeutics (AMTBT), a major supplier of botanical extracts and nutritional supplements, is now the exclusive North American agent for all products manufactured by Ningbo Green-Health Pharmaceutical Co., Ltd. (NGHP). This move further strengthens the long-standing relationship between AMTBT and NGHP. Earlier this year, AMTBT’s production was transferred to the NGHP facility.”


Predictably, not all companies are being so proactive. Several times in recent weeks I’ve been told the well-rehearsed story “We’ve got three years before they take effect, we’ll wait and see what happens….” I can’t help but be baffled by this approach and strategy (we know the regulations aren’t going away), and it is more than likely that these same procrastinating companies will be the same ones complaining the loudest about the harshness of the regulations and enforcement activity some three years out.

Just in case the rules and their enforcement don’t prescribe adequate quality (and it is distinctly possible and perhaps probable that they won’t), industry must continue to look to itself (and to third parties) to provide the rules with teeth. As it is unlikely that FDA enforcement will identify the outliers we’d so much like to be rid of, we must do so ourselves by any means necessary (including whistle-blowing to any and all who will listen). Apparently, FTC will perhaps take an interest in addressing an ingredient adulteration case or two, and in my opinion, it’s high time. When they find that some manufacturers know they’re buying inferior materials (and don’t care) it will be interesting how they (and the marketplace) will react.

Yes, these are interesting times – stay tuned.

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