NIE’s panel of experts discusses tariffs and supply chain pressures facing the natural products industry.
The panel:
Devendra Soman, Marketing Director, NuAxon Research, Satara, India, www.nuaxonresearch.com
Lauren Clardy, Senior Director of Branded Ingredients, Maypro, Purchase, NY, www.maypro.com
Luke Huber, ND, Vice President, Scientific & Regulatory Affairs, Council for Responsible Nutrition (CRN), Washington, D.C., www.crnusa.org
Shaheen Majeed, Global CEO & Managing Director, Sabinsa, East Windsor, NJ, www.sabinsa.com
Sofia Sotiropoulous, Senior Director, Sustainability & Climate Innovation, Lonza, Basel, Switzerland, www.lonza.com
Tom Ullrich, Chief Supply Chain Officer, Vitaquest International, West Caldwell, NJ, www.vitaquest.com
The natural ingredients market has been plagued by tariffs and supply chain issues of late. These challenges are forcing finished-product manufacturers and ingredient suppliers alike to adapt to ever-changing market conditions. Furthermore, sustainability has taken center stage as a priority for brands as consumers increasingly audit their purchases for eco-friendliness. These and other issues are creating an ever-shifting situation in the natural products industry that requires quick adaptation. To determine how companies are dealing with these challenges, Nutrition Industry Executive (NIE) has convened a panel of experts to speak on tariffs, supply chain issues, sustainability and the importance of adaptability in the nutraceutical sector.
NIE: What is the current state of the natural ingredients market?
Soman: As health care costs continue to rise globally, awareness around healthy lifestyles, regular exercise and preventive health management has increased significantly. This shift has translated into strong and sustained demand across the botanical and nutraceutical markets. In particular, condition-specific blends are gaining considerable traction, as the industry moves away from broad, generic solutions toward more targeted products designed for clearly defined health outcomes. At the same time, the market is maturing. Buyers and brand owners are no longer satisfied with a compelling origin story alone; they increasingly expect clinical validation, full traceability and robust quality documentation to support ingredient claims. This reflects a broader shift toward evidence-based natural health solutions. Interestingly, the organic ingredient space—especially for Indian-origin botanicals—has faced some headwinds. Stricter regulatory norms, coupled with the high cost and complexity of certification, have made organic compliance increasingly unaffordable for many farmers.
Clardy: The natural ingredients market remains resilient but continues to face volatility from shifting consumer expectations, geopolitical pressures and ongoing supply chain fragility. Growth is uneven across categories, with strong demand in metabolic health, cognitive support, gut health, health span, immune function and GLP 1–targeted weight management. Innovation remains robust, particularly around next-generation probiotics, postbiotics, prebiotics, precision fermentation and standardized botanicals. Clinically studied branded ingredients and proprietary delivery technologies that enhance absorption and bioavailability are increasingly differentiating suppliers.
Huber: From CRN’s perspective, the dietary supplement market appears fundamentally resilient, supported by continued consumer interest in health and wellness. At the same time, conditions vary significantly by ingredient category, geography and formulation. Some segments appear to be operating relatively smoothly, while others may experience intermittent pressure related to sourcing, logistics or cost volatility. At this stage, CRN is focused on listening to members to better understand where stress points may be emerging rather than characterizing the market as a whole.
Majeed: The natural ingredients market remains resilient but under sustained pressure. Demand fundamentals are strong, driven by consumer interest in preventive health, clean-label products and science-backed ingredients. However, the operating environment for suppliers has become significantly more complex. Agricultural volatility, geopolitical instability and trade policy disruptions have layered uncertainty onto what is already a seasonally constrained, biologically dependent supply chain. As a result, reliability, transparency and long-term supplier relationships have become more important than ever, often outweighing short-term price considerations.
Sotiropoulous: The natural ingredients market is being shaped by increasingly informed and value-driven consumers. Sixty percent of consumers say clean labels significantly influence their buying decisions, particularly claims such as no additives or preservatives, only natural ingredients, and without artificial ingredients. This increased consideration when it comes to ingredient choice is driving momentum in the natural ingredients market. As a result, sustainability has evolved from a side note to a strategic differentiator.
Ullrich: The market is healthy, but uneven. Demand is strong for botanicals and “natural” actives, particularly those tied to immune support, cognitive health, stress and mood, etc. Supply is still a challenge since many of these ingredients still come from concentrated growing regions and have risks associated with weather, geopolitics and quality.
NIE: How are suppliers dealing with tariffs?
Soman: We have proactively begun diversifying our markets to reduce dependence on any single tariff regime. In parallel, we have repriced a number of ingredients, introduced shorter price-validity windows, and moved toward shared-risk frameworks with customers to ensure continuity of supply in an increasingly volatile trade environment. This is a particularly challenging period for the processing and extraction industry. Significant capital has already been invested in specialized machinery, infrastructure and certifications, and processing locations cannot be easily shifted. Many botanicals are geographically constrained—they can only be grown and processed in specific regions—and, in many cases, local economic factors simply do not support relocation or on-shore processing. We have also adjusted our Incoterms to better reflect changing tariff structures and trade realities. Ultimately, while suppliers and brand owners can absorb part of the impact, there is a limit to how much cost can be carried internally. Some portion of tariff-related increases will inevitably flow through the value chain and reach the end consumer, particularly in a market where margins are already under pressure.
Clardy: Tariffs remain a persistent challenge, particularly for ingredients sourced from India, Asia, Eastern Europe and parts of Latin America. Rather than treating them as temporary, many suppliers have integrated tariffs into longer-term sourcing and pricing strategies. Common approaches include diversifying geographic sourcing, shifting portions of processing to tariff-favorable regions, renegotiating long-term contracts, and investing in North American production where feasible. While some tariff relief has been achieved through AHPA (American Herbal Products Association)-led and UNPA (United Natural Products Alliance) exclusions, many high-demand botanicals and bioactives remain subject to duties, and these costs continue to influence pricing across the industry.
Huber: Tariffs remain an active and closely monitored issue for CRN and its members across the dietary supplement and functional food supply chain. In some instances, suppliers are experiencing increased cost pressures and uncertainty tied to evolving trade policy developments, particularly for internationally sourced ingredients and inputs. Given the dynamic nature of tariff policy, companies are generally taking a cautious and flexible approach rather than relying on any single mitigation strategy.
Responses may include diversifying sourcing, reassessing supplier relationships, adjusting inventory planning, and evaluating contractual or commercial arrangements where feasible. Because trade conditions can shift quickly, companies appear to be planning for multiple scenarios simultaneously rather than assuming stability. To support the industry, CRN has been actively providing members with timely education and guidance. This includes access to external trade and customs expertise through Kelley Drye & Warren LLP, which CRN has engaged to provide specialized tariff and trade consulting support as members assess risk, compliance obligations and mitigation strategies. In addition, CRN provides regular newsletter updates on tariff-related developments, hosts tariff-focused webinars, and maintains an online Tariff Resource Center.
Majeed: Suppliers have adopted a range of strategies, but approaches vary widely in terms of transparency and risk tolerance. Some have raised base pricing outright, while others have embedded tariff impacts into freight surcharges or adjusted invoice values, thereby obscuring the actual policy impact. At Sabinsa, we took a different path: tariffs were handled as a clearly identified, separate line item rather than distorting long-term product pricing. Even when India-specific tariffs reached 50 percent, only 40 percent was passed through, with the remainder absorbed internally to preserve customer trust and pricing integrity. This approach allowed customers to understand precisely what portion of their costs was policy-driven rather than supplier-driven, maintaining the transparency that long-term partnerships require.
Sotiropoulous: Suppliers and brands are increasingly mitigating tariff-related complexity by localizing manufacturing and sourcing. Choosing a local manufacturer offers significant operational benefits including reduced exposure to tariffs, a reliable supply, shorter lead times, scalability and consistently high-quality standards. In the fast-moving nutraceutical space, speed-to-market and operational reliability are critical—whether brands are racing to capture emerging trends or scaling production to meet rising demand.
Ullrich: Our suppliers are dealing with the tariffs in several ways: our larger supply partners are working with us to mitigate cost increases as best as possible. Most suppliers are using a mix of strategies including reclassifying and validating HS codes and COO documentation to avoid surprises at customs or shifting sources away from tariff impacted countries.
NIE: How are suppliers dealing with supply chain issues?
Soman: We have significantly strengthened our forward planning across all critical ingredients, supported by meaningful investments in supplier qualification, end-to-end traceability, and long-term, quality-driven raw material contracts. At the same time, we are driving greater standardization and digitization of documentation, enabling real-time data sharing with both clients and sourcing partners to improve transparency and coordination across the supply chain. In today’s geopolitically volatile environment, resilience has become the primary objective. As a result, we are operating with higher safety stocks and more conservative lead times, which, while not always the most cost-efficient approach, are increasingly essential to ensure continuity and stability of supply.
Clardy: Although COVID-era disruptions have eased, supply chain fragility persists due to climate variability, labor shortages, port congestion and geopolitical instability. Suppliers that have invested in multiple sourcing partners, diversified transportation routes, safety stock and collaborative demand forecasting have fared best.
Huber: Many suppliers appear to be applying lessons learned over the past several years, including more conservative planning assumptions and closer coordination with logistics partners. Companies continue to monitor risks related to transportation requirements, lead times and geopolitical developments, with experiences differing depending on ingredient complexity and region of origin.
Majeed: Current supply chain challenges differ fundamentally from pandemic-era disruptions. This isn’t about capacity shortages or freight paralysis; it’s more about unpredictability and timing. We’ve responded by increasing safety stock where seasonality allows, strengthening logistics partnerships, and diversifying sourcing geographies when agricultural realities demand it. The real differentiator has been relationships built over decades. Long-standing relationships with farmers, freight partners and packaging suppliers have proven critical.
Ullrich: Dual sourcing is becoming standard for critical raw materials and packaging components, more inventory buffering on long lead items. Logistics diversification, especially since ocean lanes have been volatile due to rerouting and geopolitical disruptions.
NIE: What factors are influencing pricing in the industry?
Soman: Climate change and increasing climate variability have made raw material availability far more volatile than in the past. While raw material costs and testing requirements have risen sharply, market expectations around the pricing of both branded ingredients and finished products remain largely unchanged from five years ago. This imbalance has created significant pressure across the value chain, leading to margin compression, unhealthy competitiveness, and, in some cases, reduced demand when prices eventually have to move upward. At the same time, recent disruptions in global logistics routes have caused major swings in freight and insurance costs, significantly increasing the landed cost of goods, which ultimately flows through to the end consumer. Compliance has now become one of the largest cost drivers in the industry. Regulatory requirements continue to increase, and inconsistencies between laboratories—often requiring multiple rounds of testing at different stages of the supply chain have forced companies to build testing and quality assurance costs directly into ingredient pricing. On top of this, tariffs remain a major and growing cost pressure. With tariff levels trending upward, the ability to absorb these increases without adjusting final product prices is becoming increasingly unsustainable.
Huber: Factors that may influence pricing include tariffs, transportation costs, agricultural variability, labor and energy inputs, and administrative costs associated with regulatory compliance and documentation.
Majeed: Pricing today reflects a convergence of factors rather than any single cost driver. Tariffs remain the most visible pressure, but they are compounded by sustained inflation in logistics, energy, labor and regulatory compliance costs. Climate-related yield variability is also playing a role, particularly for botanicals with narrow harvesting windows where a single weather event can affect annual supply. What’s critical to understand is that pricing decisions have become strategic, not merely mathematical. Suppliers must balance cost recovery against the risk of destabilizing customer relationships or undermining long-term market confidence in natural products. This calculation becomes especially delicate when synthetic alternatives or adulterated materials offer artificially low prices that erode quality standards across the category.
NIE: What sort of sustainability initiatives are happening in the industry, both with respect to ingredients themselves and other necessary goods like packaging?
Soman: Regenerative agriculture, water table management, pollination programs and biodiversity enhancement initiatives are some of the core sustainability measures we are implementing to strengthen resilience across our supply chain and ensure a stable, long-term supply of botanical raw materials. From a packaging standpoint, as an ingredient manufacturer, we use fully recyclable HDPE drums and aluminum containers for all extracts. These materials are widely accepted across global recycling systems, ensuring our packaging remains compliant with international recycling norms and aligned with long-term sustainability goals.
Clardy: Sustainability is increasingly operational rather than marketing driven. Suppliers are investing in regenerative agriculture, farmer livelihoods, water stewardship and chemical reduction, while packaging is shifting toward recyclable or reduced-plastic options. Brands are requesting carbon footprints, and environmental impact reporting to meet ESG goals. Third-party certifications, substantiated sustainability claims, and internal compliance reviews are becoming standard. Upcycling is emerging as both a sourcing strategy and a compelling brand narrative, reflecting measurable improvements in sustainability for 2026 and beyond.
Majeed: Sustainability has evolved from aspirational marketing language to operationally integrated practice. On the ingredient side, this includes contract farming programs with fair-trade pricing, farmer training in good agricultural practices, and complete chain-of-custody traceability initiatives from field-level audits to finished product. At Sabinsa, our award-winning Indian Kino tree reforestation initiative, which involves planting two trees for every one harvested, represents the kind of long-term environmental stewardship the industry needs.
Sotiropoulous: As consumers search for more planet-friendly nutraceutical supplements, sustainability must be integrated into the entire product development process—from early innovation phases to packaging and distribution. This need is being further accelerated by the tangible impacts of climate change, which the industry is already experiencing firsthand. Extreme weather events are disrupting crop yields and global supply chains, while soil degradation is affecting the concentration of bioactive compounds in key ingredients. Conscientious consumers are aware of these risks. More than half believe climate change will impact access to food and increase prices, and as a result, they’re more likely to back brands that invest in sustainable farming to help keep food and beverage prices steady. NIE: How are suppliers adapting to emerging pressures like consumers’ demand for eco-friendly supplements?
Soman: We have found that water-free products and ingredients, the elimination of problematic excipients, and simplified formulations and SKUs are some of the most effective ways to reduce waste and improve the overall environmental footprint of our ingredients. This approach not only minimizes material usage but also lowers complexity across manufacturing, storage and logistics. All key activities are tracked through a carbon-footprint lens, allowing us to make informed decisions and continuously optimize operations for environmental efficiency. The use of reusable packaging systems and digitized documentation across the supply chain further helps reduce waste, improve transparency and identify points where resource leakage can occur.
Majeed: The fundamental shift is recognizing that sustainability expectations now influence purchasing decisions across the value chain, not just at the retail level. Brands increasingly view documented sustainability practices as prerequisites for supplier partnerships, which means certifications, third-party audits and transparent sourcing have moved from differentiators to requirements. What consumers are demanding, and what informed brands are requiring, is verifiable evidence: complete documentation showing ethical labor practices, responsible agricultural methods and measurable environmental impact reduction.
Sotiropoulous: Suppliers, in particular those closest to the farm, are often the first to experience the impacts of climate change. As such, they are actively assessing the environmental footprint of their practices and identifying opportunities for improvement. In response to growing consumer expectations, many are exploring alternative and more resilient farming models to deliver products that are more ethical, stable and safer. This includes greater focus on traceability and transparency.
NIE: Do you foresee any improvements in sustainability this year?
Soman: Improvements in sustainability are increasingly inevitable because they are being driven by government policy, consumer expectations and cost economics, not merely by voluntary commitments. In many cases today, being sustainable is actually more cost-effective than being unsustainable, particularly when efficiency, waste reduction and long-term risk are taken into account. While certain areas will take time to adapt due to infrastructure or regulatory complexity, the overall direction is clear. Over time, sustainability will become the default operating model, and every participant in the value chain will have to align with it in one form or another.
Majeed: Incremental improvements are likely in water management, waste reduction and traceability systems, particularly among suppliers already committed to these practices. However, large-scale sustainability gains require significant capital investment, which has become more challenging as tariffs and logistics costs divert funds away from long-term initiatives such as R&D and infrastructure upgrades. The most measurable progress will come from facilities currently under development or expansion, where sustainability infrastructure is being designed into operations from the outset rather than being retrofitted. The concerning trend is that companies are being forced to choose between maintaining supply continuity under tariff pressure and investing in sustainability improvements, when ideally both should be non-negotiable priorities.
Sotiropoulous: The nutraceutical industry has often been ahead of many sectors when it comes to ethical and transparent sourcing, providing a strong foundation for the next phase of sustainability progress. Building on this, climate change adaptation and biodiversity protection are emerging as critical focus areas for the year ahead, reflecting the growing risks posed by environmental disruption. There are also strong signals that the industry is moving beyond measurement toward meaningful action. Companies are increasingly focused not only on improving their own sustainability performance, but also on enabling consumers to make better-informed choices. Greater on-pack transparency is expected to play an important role in this shift, helping translate sustainability efforts into clear, credible information that supports more sustainable purchasing decisions.
NIE: What’s the next big thing for the nutraceutical supply chain?
Soman: Resource planning and end-to-end traceability will become the new default for the industry. Alongside strong clinical evidence, these two factors will increasingly define the long-term sustainability and credibility of nutraceutical operations. While localized ingredient manufacturing may gain attention, it is likely to remain a long-term aspiration rather than an immediate reality.
Clardy: The next evolution will focus on integrated health platforms. In a forward-looking scenario, suppliers act as ecosystem architects, designing platforms that coordinate complementary ingredients around specific health applications—cognition, immune support, cardiovascular health, gut health and more—anchored in clinical evidence rather than individual ingredients.
For brands, this approach streamlines product development, speeds time to market, and reduces regulatory complexity. For suppliers, it transforms relationships from transactional sourcing into strategic partnerships, creating greater value by delivering coordinated, evidence-backed solutions rather than standalone ingredients.
Artificial intelligence will be a critical enabler, analyzing data across ingredients, formulations, and health outcomes to support predictive innovation, optimize delivery systems, and ensure alignment with both scientific evidence and evolving consumer needs.
Huber: Rather than a single “next big thing,” the near-term focus appears to be on adaptability. Companies are working to build systems and relationships that can respond to shifting trade policies, evolving consumer expectations and increasing regulatory complexity.
Majeed: The next major evolution will be toward resilience-driven integration. This includes closer alignment between cultivation, processing, quality testing and logistics, supported by improved forecasting capabilities and real-time communication. Companies that can demonstrate continuity, compliance and complete transparency across the entire supply chain will be best positioned to serve brands navigating an increasingly volatile global environment.
Sotiropoulous: To stay one step ahead in the nutraceutical market, brands need to gain consumer trust through credibility rooted in science and sustainability. As consumers navigate an increasingly crowded marketplace filled with competing claims, AI-based health advice, and product abundance, the brands that are grounded in transparency and evidence will stand out.
Ullrich: The next big thing is verifiable supply chains—being able to prove origin, environmental attributes and compliance quickly. This means digitized traceability and supplier data standards, as well as more rigorous chain of custody documentation. NIE
