I sat down with Christopher Good, Chief Operating Officer at Theralogix, to discuss his recent visit to Natural Products Expo West in Anaheim, California. He shared with us some great insights and how this trade show helps improve the natural supplements industry.
Q: What is Expo West and why does Theralogix attend each year?
A: At the end of the day it’s our job to provide customers with dependable, natural supplements. Natural Products Expo West is the premier industry trade show for the Natural Products and Supplements industry, attended by 80,000 people this year.
The Expo is held each spring in Anaheim, California. For Theralogix, it is a chance for us to see the current state of our industry and see new trends and products. More importantly, it is an opportunity for us to meet with a large number of our raw material suppliers. We also attend education and discussion sessions that explore topics ranging from regulatory compliance to clinical studies and research supporting supplements.
Q: What did you learn about the state of the natural supplements industry this year?
A: The industry continues to grow, and in fact, it grew more than twice as fast as the US economy did in the last year. Supplement sales increased by 7.7% year over year in 2016. Some of the fastest growing segments of the of the industry were practitioner product lines and internet sales.
These trends are great news for Theralogix! Consumers are looking for products like ours that are supported by research and trusted by physicians. They are also becoming more comfortable with purchasing natural supplements over the internet.
Q: What products or innovations were getting the most attention at the Expo?
A: Exhibitors with newly available probiotics were getting a lot of attention. Two exhibitors of fish oil, Nordic Naturals, and AlaskOmega had popular exhibits as both had expansive lines of new products.
It is always fascinating to see what is at Expo, and to try to guess which new items will gain popularity in stores. For example, I don’t think of jerky as health food. However, the show featured several companies that were introducing organic, healthy jerky with hopes of catching the attention of health food store buyers. You never know; even food bloggers got in on the action and shared their favorite foods.
Q: You said that you met with several raw material suppliers. Who stood out?
A: It would take a whole year’s worth of travel for us to see as many current or potential new raw material suppliers as we do in four days at Expo. It is a great way to build relationships and evaluate new suppliers.
The meeting that stood out to me was with EuroMed, the company that supplies the saw palmetto for Prostate SR. It was interesting because it illustrated the importance of good supplier relationships. It also highlighted the potential dangers of not knowing or properly evaluating vendors.
Q: What happened with EuroMed?
A: We purchase saw palmetto extract from EuroMed, and have for years. In fact, this last summer we flew down to Okeechobee Florida in August to see the Saw Palmetto harvest. One of the reasons we decided to visit the harvest is because this happens to be a raw material that has been tricky to purchase over the years.
The saw palmetto fruit is wild-harvested, meaning that nobody plants saw palmetto. It grows wild in places like south central Florida, and is hand-picked. Plants take thirty years to fruit, and the harvest is unpredictable from year to year. This has caused supply issues, leading to price spikes and poor availability.
EuroMed is a great supplier because they contract directly with the land owners and pickers and personally oversee the harvest. Other saw palmetto suppliers may purchase extract or berries second hand. Therefore, EuroMed knows what they are getting, and they are less susceptible to price spikes.
Because of a conversation we had with EuroMed at Expo West in 2016, we knew that last year’s harvest would most likely be poor. Our history and good relationship with EuroMed allowed us to negotiate a full year purchase agreement. We guaranteed them that we would buy a certain quantity this year. In exchange, EuroMed negotiated a fair price and a guarantee of availability of the raw material.
When there is low availability of a raw material the resultant price pressure may lead to adulteration in the supply chain. Dishonest suppliers were introducing a material that looked like saw palmetto, and in some tests, even tested like saw palmetto. However, in fact, it was a cheaper material or inferior saw palmetto. This is a scenario that is unfortunately sometimes seen in our industry. Price pressures result in adulteration or poor quality materials.
Q: So how does your relationship with EuroMed avoid poor quality?
The way to avoid this is to know your suppliers. Testing is not perfect, and without visibility to your supply chain, a manufacturer might be fooled. Other manufacturers are now wading through a minefield of issues such as high prices, no supply at all, or worries about the quality of their raw material.
Our relationship with EuroMed gives us confidence that we have a high-quality material, and plenty of it. Our conversation with EuroMed at Expo West 2017 was about how to tell our story.
We want our consumers to know that our product is of the highest quality and they should be discerning when purchasing saw palmetto products.
Q: This is a good story to segway into my next question. What can we expect from the FDA in the year ahead?
A: Nobody seemed to have that answer at Expo, there was little discussion around the topic. This was a significant change from a year ago. In 2016, the industry was coalescing around several initiatives to self-regulate, in part because of a belief that the FDA would require more of the industry.
A year ago, the Expo was on the heels of the news that the New York District Attorney had independently tested several supplements, potentially with inappropriate testing methods, and then required retailers to pull those items off store shelves.
The industry wanted to increase self-regulation to build consumer confidence. Moreover, the industry hoped to show regulators and the FDA that the industry is a responsible one. Much of the discussion at Expo a year ago, centered around appropriate testing methods, a self- administered industry product database, and a desire to build trust with consumers.
This year, the discussion was empty. We have an acting head of the FDA and little indication as to the direction that the FDA might take in the years to come. Possibly that direction will come soon, but at the time of the Expo, there was very little discussion on the current regulatory environment.
Q: Any final impression of the show you would like to share?
A: The supplement industry is rapidly changing and dynamic. Each year when we attend Expo West, we see the industry and our place in it a little differently. It is one of my favorite and most productive trips of the year.
This year was no exception.
The industry continues to produce new dynamic products and to improve the quality and diversity of offerings. It is exciting to walk the exhibit floor and see where the industry is headed. Expo is also a great place to build supplier relationships that benefit our company and ultimately our customers.
We will be there every year- getting some sunshine in Anaheim.
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