KSR: There have been reports of growing interest in nutraceuticals and functional foods as a result of COVID-19, particularly in terms of immunity supplements. Have any innovator companies actually come to you to express their need to increase production and ask for help?
TO: We’ve not only heard this from new clients, it’s something we’re experiencing with existing ones too. Immunity has always been an important aspect of nutraceutical applications. And now, with COVID-19, that will no doubt increase. It’s definitely a growing segment in the food supplement sector.
KSR: Do you think the COVID-19 situation has helped to raise the profile of nutraceutical products or influenced the way that people look at prevention rather than curing certain medical conditions?
TO:Definitely. Prevention is very much what we’re seeing now, which, from Sirio’s perspective, mirrors what we initially saw in China. During the COVID-19 outbreak, we noted a market increase in the purchase of immune health products and ingredients that support a better immune system.
As this was specifically related to the food supplements market, we knew that consumers were looking for preventive measures. This will continue to become more important, I think, as people become more aware of their own health situation and what they can do as preventive measures.
KSR: And I understand that, in terms of sales volume, numbers are up. Is that true?
TO: Derived from a combination of different factors, yes it is. We’ve seen more sales from existing customers in the first half year, which has somewhat compensated for the difficulty of finding new ones.
At the same time, though, they’re planning orders earlier than usual to ensure higher levels of “safety” stock at their own warehouses, so they order more. Plus, we’re helping some existing clients to enter the immunity market by supplying ingredients to formulate new immune health products.
KSR: We hear from various governments people talking about trade relationships, etc., sourcing materials from China and possibly implementing different structures and safeguards. How do you think that might affect global business, particularly for Sirio and Ayanda, but also across the board for companies working on a worldwide basis?
TO: If we look at Ayanda and Sirio, for example, the thing we have in common is that we both manufacture softgels. In addition, Sirio also manufactures other dosage forms that we [Ayanda] don’t. One of the main ingredients used in softgels is gelatin.
We’re now using different sources for that product, but we have to keep in mind the risk of cross-contamination between raw materials from European suppliers and those from product inventories from Asia.
A lot depends on where the raw materials are being produced. Is it only being sourced from Europe or China as well? How does that affect supply, etc? So, it doesn’t necessarily matter if the raw materials are being produced in China and India, or in Europe or elsewhere. It all depends on the raw material itself.
Has a risk assessment for the production of those raw materials at multiple sites or multiple workshops been done and how easily can they be switched?
KSR: And how has gaining access to raw materials been? Do you have a secure supply chain in place or are you searching for other sources?
TO: Fortunately, we have a secure system in place. We anticipated quite early on that we needed to get additional safety stock. As such, we’re in the lucky position of not having had to activate secondary sources … yet.
I know that some companies have had to go and proactively look to dual source certain raw materials because their existing supplier couldn’t deliver, but we are not in that unfortunate situation. We have a secure raw material supply chain in place, which was a conscious move and one that was implemented as early as February.
As a consequence of the pandemic, we’ve also made some new formulations — as per the “development” aspect in our CDMO title — that were made available quite promptly using the raw materials we have. As a result, based on the secure position that we’d established, we were actually able to promote some new immunity formulations to our customers.
KSR: And have these new immunity products gone to market yet?
TO: We made a post on LinkedIn some time ago regarding three different immunity formulations. We were able to make these formulations available relatively promptly. They’re not “on-the-shelf” ready, but we can certainly prioritise those production batches.
We also made sure that we had enough production capacity available to be able to produce them. As well, and perhaps most importantly, the raw materials were promptly available within our own warehouse. It was very gratifying to see our customers responding to that LinkedIn post, which has also brought us some new leads.
And that’s a bonus. You can always try to prospect for new business, but it’s hard work. It’s much more straightforward to increase the exposure of your own brand on a digital platform and hope that the enquiries will come to you.
Thankfully, people found the post to be of interest. In the absence of trade shows, it’s a viable way to scout for new business amidst the pandemic. That, to me, signifies that we’re entering a new era. I think things will happen slightly differently now; we may well need to take a different route to market.
KSR: Do you think this “unprecedented” period has strengthened relationships with existing customers?
TO: I don’t see a difference yet. In the period before COVID-19, we already had strong and long-term relationships with most of our clients. What’s important is maintaining those associations, collaborations and continuing to provide a reliable service. Now, we are harvesting the fruits of those investments, which will hopefully continue for the long-term.
Will a situation like this make our relationships stronger? From a personal point of view, I think it will. And, not just in a professional way, but a personal setting too. This uncertainty can help to make a relationship stronger. I think and hope that that might be the case, but it’s too soon to measure at the moment.
Ultimately, even in a global business such as nutraceuticals, everything we do is driven by those vital partnerships with fellow human beings.