Given its size and steady growth, changes would normally be expected to occur quite slowly. However, significant shifts are beginning to appear on the horizon and nutraceutical companies will be forced to either adapt or perish.
New regulation looming
In April of this year, US senators Dick Durbin and Mike Braun introduced the Dietary Supplement Listing Act of 2022, which caused supplement manufacturers nationwide to sit up and take notice. The act aims to make the supplement market more transparent by imposing regulations that would require all manufacturers to list their products with the US Food and Drug Administration (FDA).
Braun asserts that the bill will enhance Americans’ healthcare options, whereas Durbin says it will provide a more transparent dietary supplement market that consumers deserve. There is no doubt that consumers would benefit from more transparency. But, if passed, this legislation would wrap an already complicated process in more red tape and create problems for nutraceutical businesses of all sizes.
Nutritional supplement companies need to provide the FDA with product names, ingredients, electronic labels and all health and function claims. It would create an added layer of premarket approval that does not exist today for many foods and beverages … and some argue should not exist for supplements.
The bill has yet to pass, so it remains to be seen if or how it would be implemented.1 But, if it does become law, it will likely cause much stress and confusion for manufacturers and consumers alike, raise already high prices and reduce the number of dietary supplements available on the market.
Those companies that are ahead of the game and have invested in clinical research to support their health benefit claims are obviously the ones most likely to succeed under these new regulatory conditions.
Clinical proof
There was a time when a few buzzwords and vague promises were all it took to sell a nutritional supplement. Consumers were more trusting and not so well informed. However, this also created a veritable “Wild West” where scammers flourished.
Fortunately, times have changed. Although fraudsters still exist and there is no shortage of “snake oil” on the market, consumers have wised up. They no longer take exaggerated claims at face value and are prepared to do their own research. More readily available online reviews, on Amazon for example, have helped immensely with such research.
But if you have a product that genuinely works and you’re making claims to that effect, consumers now expect to see proof beyond reviews. For many consumers, social proof can be enough, such as testimonials, Instagram reviews, forum exchanges, etc. But, for increasing numbers, clinical trials that back those claims is now essential.
Healthy Extracts plant-based formulations for heart and brain health are supported by clinically proven benefits. We don’t just bombard our end users with unsupported claims and scripted video testimonials. Instead, we say: “You can be assured that this works. Here’s proof.” This is now what the modern consumer wants and demands.
Natural, not synthetic
In recent years, customers have trended toward natural products. It’s all part of the growing awareness that natural sources are healthier for your body and the planet. The nutraceutical industry has already begun to tap into this trend. But it’s not just about making vague promises about natural extracts or ingredients. Customers want to know exactly what is in those natural extracts and ingredients, why they are important and how they are created naturally.
When we talk about our premium Citrus Bergamot SuperFruit heart health supplement, we don’t just highlight the powerful benefits of the extract; we tell the story of the fruits from which they’re extracted. We talk about the antioxidants that make them healthy, the region where they are grown and how they have been used for hundreds of years.
We also talk about how we lead the competition, with BergaMet PRO+ having a bergamot polyphenolic fraction (BPF) potency of 47% (compared with the closest competitor at 38%).
Demand trends
One of the driving forces behind the growth of the nutraceutical industry is the trend toward healthy and holistic dietary supplements. Customers are no longer solely focused on supplements that will make them stronger or thinner. Sure, these supplements still constitute a sizeable share of the market, but there has been a growing demand for natural supplements that can improve heart and brain health, as well as liver and digestive function.
It’s not just about quick fixes, but true lifestyle changes that make a difference to living healthier and longer lives. We've all spent a disproportionate time worrying about our health during the last few years. These tough times have been a wake-up call for many of us and living longer is finally taking precedence over our usual vain pursuits.
Production safety
All manufacturers in this industry are expected to follow good manufacturing practices (GMPs) and, as regulations tighten, they may face more stringent controls. GMPs were established by the FDA and govern the purity, strength and composition of dietary supplements. These rules make sure that the supplements contain what they are supposed to contain and are as effective as claimed.
However, customers are aware that not all supplements are labelled correctly or made to the same high standards; as such, they are increasingly looking for proof that the product they receive is the one they actually paid for. Independent testing can help with this issue. It provides a seal of assurance that confirms the identity and potency of the product while also providing peace of mind with regard to the absence of contaminants.
M&A opportunities
With a sharp focus on those that meet our strict scientific standards, Healthy Extracts was formed to acquire complementary companies in the nutraceutical space. As businesses face increasing uncertainties and operating rising costs, we are seeing more consolidation opportunities than ever before.
Although challenging economic conditions also create uncertainties for consumers, the supplement industry has always seemed to be immune. According to a report by Danial Gross at Slate.com, supplement companies actually thrived during the 2008–2009 recession.2
Although consumers had less money to spend and faced financial instability, this did not quash their appetite for dietary supplements.
We saw something similar occur during the COVID-19 pandemic; with many businesses shutting down, health was at the forefront of everyone’s mind as they spent more money shopping online.
A variety market risks still remain, especially with the pending regulatory changes, supply chain shortages and shifting trends; yet, for companies with buying power and experience, we believe the coming months will bring many very lucrative opportunities. For us, this means continuing to expand our product portfolio through the strategic acquisitions that fit our platform and benefit from our multichannel marketing strength.
References
- www.congress.gov/bill/117th-congress/senate-bill/4090/all-actions-without-amendments.
- https://slate.com/business/2009/10/the-vitamin-business-thrived-through-the-recession-why.html.
