The Supply Chain Keeps Us Together

Manufacturers can be victimized by economic adulteration. George Pontiakos, the president and CEO of BI Nutraceuticals, lovingly describes the raw material marketplace for nutraceuticals as being "replete with people completely lacking ethics." 

Having a reliable, transparent supply chain isn't a necessity just because of legal consequences. Getting caught with a defective product, says Dr. Markus Lipp of the U.S Pharmacopeia, "leaves a dent. You'll have a tremendous expense to recall [the product], fix the product, and rebuild trust in your consumer."

Whether or not it's an accident is almost irrelevant. "Anybody who wants to stay in business doesn't want too many oopses," he adds.

Oopses can happen regardless of precautions. (Example: Two herbs look alike, and an inexperienced worker picks the wrong one.) "Even with all my efforts, between 5 to 7 percent of the product that arrives here is rejected," Pontiakos says.

Word of mouth remains influential, so if a customer has a bad experience taking "bilberry," when it's really something else, the whole industry suffers.

Just following the GMPs and requesting the so-called right information only does so much. "The supplier can only be as good as the manufacturer requires," says ethnobotanist Trish Flaster, the executive director of Botanical Liaisons (Boulder, CO).

Pontiakos doesn't recommend buying any ingredients by lowest price. "No one is that strong a negotiator to get 20 to 30 percent off market pricing," he says. Shopping for the best price also means that manufacturers can't build long-term relationships. "If you have a well-established relationship with a supplier, then you tend to be less suspicious, and with good reason," Lipp explains. "[Suppliers] want you to come back. Repeat business is always easier than getting new clients." 

Raw materials, says Pontiakos, should be bought "from reputable, professionally managed companies who have the capital strength to invest in sterilization methodologies, lab technologies, and sourcing technologies" that agree with the GMPs.  

Therefore, visiting where your ingredients come from—and not relying on handouts and handshakes—is a must, Pontiakos adds. Observe how suppliers operate. "As a president of company, if you're not scared about who you're buying from, you need to be," he says. "That will hurt you more than anything."

Though these posts cover economic adulteration, another compelling point emerges: The bar for entering (and staying) in the industry is really high. Resources are available for companies to navigate the GMPs, but that clearly takes time, energy, and capital, especially for new participants.

The federal government may have dampened the industry's entrepreneurial spirit, so it's easy to understand why cheating occurs.  But that doesn't make a company "storied" or "scrappy," Pontiakos says. Provide the right product, he warns, or go home.