With more than 35 years as a global ingredient supplier to the dietary supplement and food and beverage markets, BI Nutraceuticals has not only built up a vendor base that spans more than 45 countries — from small town mom-and-pop farms to the biggest cultivators in the nation — but also a complete understanding of each of them.
With our continued long and storied history in Asia, from both a sourcing and manufacturing perspective, BI is especially in tune with the business dynamics in the region. I thought it would be interesting to list some rules, which if adhered to, I believe would recover Asia’s reputation for quality ingredients. Although these rules are not specific to any geographic location, they can apply globally.
Stop enabling your customers to view you only as a low cost solution
There is no denying that price point is a determining factor in any business purchase. In the ingredient space, this results in adulteration and contamination. The nutraceuticals marketplace has created an adulteration nightmare by demanding unrealistic pricing that’s substantially below market; and there are those in the supplier base, more commonly in Asia, that are willing to support the deliveries of adulterated raw materials to meet these demands.
Because of this rampant lack of ethics on both parties, statements such as “China Free” are becoming more prevalent, even bordering on the point of mainstream. There is no secret buying model, no super procurement professional that can consistently provide correct product significantly below market. The industry, up and down the supply chain, knows this. This tacit approval of incorrect, unsafe product benefits no one in the medium- and long-term — and the opportunity for human and economic harm is massive.
If your customer does not trust you, how long do you think they will stay a customer?
I am constantly amazed at the cost of doing business with suppliers that are untrustworthy. Forcing your customer to defend their receiving dock because they lack confidence in you is a very shortsighted business model. Companies spend billions of dollars a year on incoming inspections because they refuse to hold their buyers accountable for the quality of product they bring in.
However, I am witnessing the procurement model within many companies rapidly changing; from one that simply accepts a “sample” that passes some AQL model to one in which buyers and QA act synergistically with co-ownership of the raw materials. Your customers’ leadership is eliminating the excuses of poor products and the extensive cost in line downtime, fulfilment and customer disruption they cause. How is your company positioned to support this change?
If the raw material is not native to your region, stop advertising that it is
The different species of Black Cohosh and Bilberry grow in varying regions; Chinese material is cheaper and more readily available. Price is the first indicator of what source the material is from. Your credibility and professionalism are completely destroyed when you knowingly advertise and ship product that is not correct to the genus species. A gullible customer will not last long in this saturated marketplace, and servicing such companies is not a good model.
Add value beyond price
The days of Asia being the default low cost region are long gone. If all you have to compete on is price, then your company is weak. Provide value add through your harvesting process, organic hygiene, knowledge of your space, professional execution and delivery, and testing methodology. Asia has been conducting business successfully for centuries; only recently has the ethics issue infected the region. It must be corrected for the long-term health of the region, your customers and the health and safety of the consumers who trust you.