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‘The industry is recognizing that spending good dollars gets you good products’: BI Chief on GMPs, adulteration, and the Dr Oz effect

By Stephen DANIELLS , 16-Apr-2013
Last updated on 16-Apr-2013 at 15:47 GMT2013-04-16T15:47:29Z

George Pontiakos, president & CEO, BI Nutraceuticals
George Pontiakos, president & CEO, BI Nutraceuticals

The dietary supplements industry is making ‘heartening’ progress on taking a hard look at raw material sourcing, but GMP issues and adulteration issues continue to cause concern, says the CEO of BI Nutraceuticals.

Speaking with NutraIngredients-USA during a recent tour of their Islandia, Long Island facility, BI’s George Pontiakos said that the company is enjoying increases in market share because of GMPs , but he remains perplexed by other companies wrestling with GMP compliance.

“I don’t get it. You have the business owners, these big time entrepreneurial business men, struggling with cGMPs.

“If you cannot figure out cGMPs then you have the wrong people on your staff. It’s about providing a program, a repeatable process of what you do and why you do it.”

‘If you don’t start with good stuff then it doesn’t matter what you do afterwards’

 “Companies have to understand where the raw material is coming from,” continued Pontiakos. “That is fault number one: If you don’t start with good stuff then it doesn’t matter what you do afterwards. The barriers of entry are low for raw materials, and it’s unfortunate that many small companies do not have the capabilities to protect a customer on cGMP compliance.

“At BI Nutraceuticals, we have a chain of custody from grower to a customer’s receiving dock. It costs money to do that. We have our own factory in China because we couldn’t source quality product with the existing infrastructure.”

Pontiakos notices an evolution in the customer base, away from simply asking how much cheaper an ingredient can be provided, to thinking about the issues associated with poor sourcing. What is the cost of rejecting a shipment? What is the cost of buying replacement product? What is the cost of testing?

“There is a swing in the mindset,” he said. “Finally, the industry is recognizing that spending good dollars gets you good products.”

“The leadership of companies is taking a hard look at what they’re buying. This is heartening.”

Adulteration and the Dr Oz effect

While there is ‘heartening’ progress, adulteration of raw materials continues to be an issue, and Pontiakos sees three ethical segments in the industry: The first are the ‘correct’ companies, he said, which buy product at the correct price, and they take pride in everything that is good about their formulations. The second segment includes the companies that would like to buy correctly if they can, but if not then they will cut a corner. They consider it cheaper to get caught than get it right.

The third segment of the industry includes the companies with a “total absence of ethics”: “These guys will buff a turd and put it in a pill.”

Pontiakos also pointed to the Dr Oz effect, of how consumer interest in specific ingredients or formulations increases following a ‘recommendation’ from the good doctor. “There are guys out that, as soon as Dr Oz points to a product, they have products and labels ready to go with ‘As seen on Dr Oz’. These guys operate for six months and then disappear.

“The challenge for the industry, particularly for niche specialty ingredients, is that the supply may not be enough to meet the mass market demands that follow a mention on Dr Oz. That really encourages adulteration.”

“Adulteration is a buyers’ problem, and the marketplace challenges are self-inflicted. There are ethical issues at the buyers’ level. They should be pressuring the suppliers to have the right products in there.”

The pharma and food influence

There are emerging forces in the market coming from other industries, notes Pontiakos. “You have the pharma guys with a focus on quality nutra-science, to produce products that are safe, efficacious, and correct, and you have the food guys who are forklifting quality nutrascience into their products.

“The extra benefit of the food guys is that compliance has always been an issue for supplements. The food guys solve that problem because we’re all used to three square meals a day.”

BI Nutraceuticals, which celebrated its 35th Anniversary last year, is seeing increasing interest from food and beverage manufacturers. The company supplies a range of botanical ingredients and its portfolio is currently split 80:20 for nutrascience versus food/beverages.

“In food, which is increasingly a focus of us, we supply a variety of companies, and our ingredients are used in nutrition bars, pasta, energy drinks, dried soups, stick packs, and meal replacement bars,”  he said.

“We supply the largest names in drinks, cereals, and pre-packaged foods. We’re the only manufacturer of botanicals that is SQF-certified,” he added.

There is significant innovation in the liquor and beer segment, he said. “It used to be only the vodka guys, but now you’ve got innovation with bourbon and whisky. The micro-brewers are also very innovative, putting botanicals in their products.”

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