To celebrate Nutrition Industry Executive’s (NIE) 20th anniversary, we asked industry insiders with a few years of experience under their belts to reflect on the impact, challenges and evolution of the natural product industry since the magazine’s inception.

Our Participants Are:

• Paul Dijkstra, CEO, InterHealth Nutraceuticals

• Paul M. Flowerman, President & CEO, PLT Health Solutions, Inc.

• Bob Green, Chairman, Novel Ingredient Services

• Jeff Hilton, Partner & Co-founder, BrandHive

• Joe Kuncewitch, National Sales Manager, Fuji Health Science

• Shaheen Majeed, Marketing Director, Sabinsa

NIE: In 1995, DSHEA (Dietary Supplement Health and Education Act) was enacted for less than a year. How has the natural products industry changed since that time?

Flowerman: Passage of DSHEA formalized the legal legitimacy of the dietary supplement industry, enabling major investment and innovation.
Hilton: Tremendous growth in most industry sectors, increased profitability, exciting product innovation and an explosion in consumer interest and trust in supplementation as a critical part of maintaining good health.

Dijkstra: The industry has become more cognitive of how supplements are defined. DSHEA is now a more common point of reference amongst conversations with industry professionals. DSHEA provides FDA (U.S. Food and Drug Administration) with appropriate regulatory authority while allowing consumers access to a variety of affordable, high quality, safe and beneficial dietary supplement products. Consumers would not have the access to dietary supplements like they do today if dietary supplements were regulated like drugs. Only a few products would be available and they would be extremely expensive. In addition to the rules and regulations implemented in DSHEA and other acts and enforced by the FDA and FTC (Federal Trade Comission), responsible companies in the industry adhere to a strong code of ethics and provide high-quality, efficacious products to consumers.

Green: DSHEA completely changed the natural products industry. Its framework allowed us to go from a cottage trade to a burgeoning billion-dollar industry. After DSHEA, it became clear that consumers want to take greater ownership of their health and they want natural alternatives to do it.

Before DSHEA, dietary supplements were considered food. We couldn’t talk about their functions in the body. And if you wanted to talk about the benefits of dietary supplements, you had to invest in years of research, as companies must do for pharmaceuticals.

The DSHEA laws recognized that dietary supplements are not food—nor are they pharmaceuticals. DSHEA defined our unique industry and set up new rules, labeling laws, etc., so we could finally discuss how supplements work in the body.

Consequently, dietary supplement manufacturers—as well as ingredient suppliers like Novel—could publicly discuss specific structure/function applications of the hundreds of nutrients we marketed at that time. This changed the dynamic in which we presented our products and ingredients, especially branded ingredients, to both trade and consumers, catapulting consumer marketing and sales to new heights.

Majeed: On October 25, 1994, DSHEA was signed into law clarifying what supplement companies can and cannot state about supplements they market.
The industry has grown enormously since then due to this clarification and the fact that the FDA cannot regulate supplements as they do with drugs, which is entirely appropriate given the safety record of supplements.

This allows responsible supplement manufacturers and distributors to have the security and financial wherewithal to investigate the properties of supplements in terms of their chemistry and their effects on human health. Sabinsa has used this opportunity to conduct research to clearly define the chemistry of ayurvedic herbs all the way to conducting human trials on nutraceuticals and human health, the world over.

This has also contributed to publication and contribution to the scientific understanding of complex herbal mixtures and single natural substances on complex biological systems, including cell studies, animal models and human trials.

This focus on science had the unintended side effect of some companies “borrowing” the science other companies produced and claiming it was applicable when for proprietary versions of products it actually was not. That also contributed to the commoditization of ingredients, which meant quality and purity was often thrown out the window in favor of cheap prices. Over the last few years, though, we have seen the pendulum swing back over to focus on quality and branded ingredients backed by applicable science. We are very pleased about this, because the ultimate goal is to provide health benefits to consumers, which requires higher quality products.

NIE: How has your company evolved in those years?

Flowerman: PLT’s supplement business initiative increasingly becomes the most significant platform for carrying out our health and wellness mission.
Hilton: BrandHive was founded in 1996. Since then, we have grown to 20 employees, partnering with industry companies around the globe to educate and promote awareness for health solutions. We have moved into new offices in 2014, and work actively in the supplement, food, beverage and personal care sectors.

Kuncewitch: AstaReal, Inc. continues to grow along with the dietary supplement industry and DSHEA has been a guiding force for us. Most recently, we were granted an NDI (new dietary ingredient) up to 12 mg per day for AstaREAL Astaxanthin, the highest daily dose allowed for this antioxidant. Additionally, in 2014 we have constructed a new state-of-the-art algae manufacturing facility in Moses Lake, WA to help us meet the growing demand for natural astaxanthin.

Dijkstra: InterHealth Nutraceuticals was founded in 1987, seven years before the enactment of DSHEA. For over 20 years, InterHealth has provided safe and effective ingredients to the natural products industry. InterHealth supported industry leaders in leading the way to DSHEA’s enactment. Since then, we have worked closely with industry groups, such as the American Botanical Council and Council for Responsible Nutrition regarding regulatory issues pertaining to our industry—ensuring consumer’s rights to safe and effective dietary supplements.

Green: The past 20 years have changed how ingredients suppliers function in the natural products industry. At my first natural products company, Nutratech, Inc. (now Advantra Z, Inc.), we launched Advantra Z shortly after DSHEA had been enacted. It was probably one of the first branded ingredients to launch under the context of the new laws. So, we were able to discuss Advantra Z’s thermogenic mechanism of action and how it supports diet, fitness and energy. This was key to the launch, growth and endurance of this branded raw material, which, 20 years later, is the industry’s leading thermogenic ingredient.

But even before I became involved with my second ingredient supply company, Novel Ingredient Services, it was clear to me that everybody up and down the industry supply chain would have to evolve and offer a whole new level of business and technological sophistication.

That’s why Novel, while still a preferred supplier of high-performance botanical and nutraceutical raw materials, known for its global sourcing expertise and delivering value beyond price per kilo, is really a provider of business solutions, offering a full range of technical services: custom ingredient manufacturing, rigorous QA/QC, and regulatory intelligence, accompanied by world-class customer service. We have distribution facilities on the East and West U.S. coasts, as well as an office in China. Novel also maintains ISO 9001:1008 certification and registration to the NSF International Dietary Supplement Ingredient Good Manufacturing Practices program. In fact, we were the first U.S. dietary ingredient supplier, and the second in the world, to receive this supplier-specific facility registration.

As the industry has evolved, we have positioned Novel to cater to a host of different manufacturer needs, with in-house experts who can work quickly and cost-effectively, adding significant value to the supplier/manufacturer partnership.

Majeed: Sabinsa was founded in 1988 and now employs 1,000 people, in seven world-class manufacturing facilities, with sales and marketing operations spanning several countries, with a primary focus on dietary ingredients. Throughout the years, Sabinsa has pioneered bringing classic ayurvedic herbs into the mainstream as proprietary ingredients supported by science, and often identifying health benefits previously unknown by ayurvedic practitioners. Industry “rock star” herbs such as Garcinia cambogia, piperine, curcumin and coleus are just a few of the herbs Sabinsa put on the dietary supplements map. The company now has nearly 100 patents on its products, and the company’s curcumin C3 Complex is the most studied proprietary curcumin in the world. The company has grown from a handful of researchers to over 100 scientists on staff. A drought in India around 15 years ago taught us to get involved in cultivation, and now Sabinsa has a robust program of working with farmers to insure a sustainable supply of high quality raw materials.

NIE: What impact has NIE magazine had on the industry over the years?

Dijkstra: NIE magazine has been able to maintain fresh insight over the last 20 years. Executives in the industry, such as myself, greatly appreciate the targeted content and practical information in all areas of the industry. NIE has been a great communication tool for me during my meetings and conversations over the years. I know that this magazine will remain an indispensable asset to our industry.

Green: NIE was an industry pioneer. Twenty years ago, our trade journals were focused on finished products and retail—with only occasional coverage of issues important to the supply side of our industry. The publishers at NIE were the first to recognize that the ingredient sourcing and manufacturing side of our growing industry had its own specific challenges and very different business issues than the retail side of the business, and that these could not be thoroughly addressed by the retail trade publications that existed at the time. And for two decades now, NIE has focused on covering the issues that directly impact ingredient suppliers like Novel, as well as finished goods manufacturers, on a daily basis.

Flowerman: NIE has consistently and courageously “lazered in” on the most commercially important or contentious issues of the day. I still consider it a worthwhile read, when I no longer have time to personally review most industry publications.

Hilton: NIE has been a great media partner in helping us credibly educate manufacturers and industry leaders about new technologies, products and clinical research.

Majeed: The launch of NIE was an important development for the industry. The majority of the trade coverage at that time was directed to retailers, but there was increasing need for suppliers and manufacturers to have both a forum and a source of information targeted to their separate issues and needs. Think about it, back then the regulatory climate for most of the industry’s products was still evolving, from organic to supplements. Having a forum to stay on top of developments was essential to industry growth and development. NIE: What impact has the industry had on the health and well being of U.S. citizens?

Dijkstra: The industry has made U.S. citizens a more informed consumer. Nevertheless, the industry has to continue to educating the public and build awareness of how even a small lifestyle change such as supplementing with efficacious and safe products may greatly impact lifelong health. Many of InterHealth’s branded ingredients provide steps manufacturers can take to help consumers maintain their weight, blood sugar and insulin levels. InterHealth’s ingredients help make a difference and improve the quality of life for millions of Americans.

Flowerman: The paradigm of preventive health and wellness grows more credible and well characterized every year. Healthy aging, supplementation to postpone the need for harsh pharmaceutical intervention and supplementation to overcome nutrient deficiencies have become mainstream consumer objectives for which supplement plays an important part.

Green: The natural products industry has made an entire generation of health-conscious consumers healthier. We’ve brought natural products to the masses. We opened the door on new ways to lead healthier lives—and provided the ingredients, products and solutions to help people get there. Twenty years ago, only a fraction of the population had been exposed to these alternatives. Today, a vast majority of Americans consume dietary supplements and partake in alternative health care modalities.

Without DSHEA—if, for example, dietary ingredients/supplements were to have been regulated as food or pharmaceuticals—none of this would have happened. Would there be a successful national chain of natural products like Whole Foods Market? Would mass-market merchandisers like Walmart see the value in carrying a wide selection of dietary supplements and organic products? Would vitamin-only retailers like VitaCost be as popular as they are today? I don’t think so. DSHEA opened the marketing and sales floodgates, enabling dietary supplements to become a hit with the masses and a multi-billion dollar industry.

Hilton: It’s impossible to measure or overstate. While obesity is still a huge issue, our industry has helped fuel the self-care trend that is causing consumers to adopt a more preventive health mindset than ever before. We should all be so proud of those accomplishments. That said, there is so much more to do.
Kuncewitch: The health and well-being of all people including U.S. citizens is what drives our industry. AstaReal, Inc. has invested a tremendous amount of resources, time and effort to the investigation of natural algae based astaxanthin. We are world leaders in studying the safety and tolerances for natural astaxanthin using different doses, treatment periods, research design and demographic variables including age gender and ethnicity.

Majeed: One the appropriate regulatory framework was in place, the industry was able to expand product offerings to provide health benefits to consumers, as well as fund research into those health benefits. Looking at important studies commissioned by first the Natural Products Foundation and later the Council for Responsible Nutrition, billions of dollars in health care savings can be realized by the use of supplements. And you can’t put a price on the quality of life when, for example, a senior citizen can stay independent when their vision stays good and their bones strong. NIE: Overall, what is the current state of the industry? What are its biggest challenges?

Dijkstra: The current state of the industry is change and evolution. Our biggest challenge currently is overcoming the negative publicity of the media. It is unfortunate that a few bad apples have overshadowed more positive discussions about healthful products that are designed to help people support a healthy lifestyle. Unscrupulous companies selling low-quality products drag down the reputation of the industry and the responsible companies that offer safe, scientifically backed supplements. Reputable manufacturers can counteract bad publicity by complying with regulatory, manufacturing and quality standards; providing correct labeling and ensuring that sufficient research has been done to support product claims and safety. Unfortunately, because of the few companies that continue to put marketing before research, the industry is coming under growing scrutiny by Food and Drug Administration, Federal Trade Commission and Congress.

Flowerman: We are experiencing the highest levels ever of investment and attention to our industry. There is also the highest level of government oversight and intervention, which enforces a needed higher standard of performance but also often confuses and limits both the industry and the consumer with confusing guidance.

Green: More than half of Americans take dietary supplements regularly. So vitamins are no longer considered a small cottage industry. They have become a staple of American alternative and preventative health care.

Twenty years ago, you had to go to a health food store to buy dietary supplements. Now, new channels—including the mass market and, especially, the internet—are dissecting the business. Health food stores used to be able to distinguish themselves by having educated personnel to help consumers address their specific nutritional needs. That wasn’t available in the mass market. But with the rise of the internet, all of this information is at your fingertips, along with supplement prices that undercut virtually every other distribution channel.

So while it’s wonderful that our industry has grown and become attractive to the masses, it has created challenges in some distribution channels. Competition is fierce. Consumers are becoming more and more price-conscious and price-driven rather than value-driven. Manufacturers need to make products cheaper, so everyone is squeezed— all the way down to the ingredient supplier.

Oddly enough, this has been an opportunity for Novel to differentiate its ingredients and services. Since the beginning, Novel has cultivated strong relationships with the very best Asian suppliers.

Long before it was mandatory, we worked exclusively with suppliers who were willing to collaborate with our regulatory experts and adopt the proposed U.S. cGMPs (current good manufacturing practices). The suppliers we use have a good understanding of the high standards required by manufacturers in today’s rigorous regulatory environment. These long-term relationships have enabled us to consistently deliver the ultimate in value: premium quality ingredients and value-added services at extraordinarily competitive prices.

Hilton: The industry is healthy and poised for continued growth, I believe. Our biggest challenges in 2015 will be: 1) maintaining and increasing consumer confidence, 2) bringing continued innovation in product development, and 3) maintaining consistent quality and safety of our products.

Majeed: Growth continues, particularly in categories that address concerns of aging Baby Boomers, in sports nutrition and in the ever-strong weight management sector. We’ve been encouraged by newfound interest in “clean label,” and even more so by those companies who interpret that to mean sourcing quality ingredients backed by science and formulating products with efficacious amounts of ingredients marketed with transparency. It was also encouraging to see industry reaction to the POM Wonderful Supreme Court decision, with industry leaders advising companies to closely examine their labels and visible discussion of the pitfalls of “fairy dusting.”

The industry continues strong, albeit with sales slumps when the media picks up on a negative study and scares people away from specific supplements with alarmist headlines while failing to report the inevitable study design flaws.

The biggest challenges to the industry is reaching a consensus on many things—on standardizations of herbs, testing protocols and what constitutes sufficient scientific evidence. This includes guidelines in making structure-function claims. The industry is in a state of flux where proper protocols are being put in place for others in the industry either to follow or to be left behind. It is a very challenging yet hopeful time.

The introduction of cGMP rules for supplement manufacturers to follow was a wonderful development both for the benefit of the consumer and the manufacturer from a safety standpoint so he can rely on his fellow manufacturer’s procedures with confidence. The cGMP regulations ensure safe manufacturing procedures are followed, from quarantine of incoming material until confirmation testing, to cleaning machines to prevent cross-contamination and final analysis of finished product before it leaves the facility.

NIE: What has the industry achieved and how can it best move forward?

Dijkstra: I believe the best way for the industry to move forward is to keep being at the forefront of safety and evolution.

Flowerman: The extraordinary growth in revenues and public visibility document our industry remarkable growth and the popular awareness.
We are involved in very important national controversies over our food supply and the consumers’ right to be well informed about the composition of what they ingest. The only winning strategy is taking the high road, which includes greater investments in quality, science, and reasoned public advocacy.

Hilton: As an industry we can continue to tell the good news story about our products and the legitimate health benefits they provide. We should consistently raise the bar on quality manufacturing. We should seek to support our products and ingredients with science and clinical research. We should reach out to new customers and new younger demographic groups who are just now forming their attitudes and usage patterns around natural products.
Majeed: The industry has achieved increased credibility with consumers due to enormous leaps in knowledge of plant chemistry and pharmacology, which has improved human health in many areas from the supplement arena to functional foods to nutraceuticals. We’ve got nearly 70 percent of consumers using our products, and we stand to make a positive contribution to human health and well being.

The industry can move forward by making a point for this latest trend of “clean label” to actually mean products made with the best ingredients in the right amounts transparently marketed. It can move forward by more businesses that make their livelihood in the dietary supplement world supporting the trade associations that advocate for our industry.