2016: The year of the hammer and the squeeze

By Loren Israelsen, president, United Natural Products Alliance

- Last updated on GMT

© iStock/marekuliasz
© iStock/marekuliasz

Related tags: Supply chain management, New york

2016 felt like the year of hammer blows and the squeeze play, with the finale the unpredicted win of Donald Trump as President. I count myself among those who close this year pondering the state of affairs globally, nationally, and personally.

A number of historians have noted the changes we see in national opinion, the break-up of historic alliances, and the flows of displaced peoples and disruptions this creates are well known patterns. We feel these same forces within our own industry. At its heart, we appear to be in the midst of a great Squeeze. This Squeeze is the flight of stability, a sense of prospects and opportunity of the middle class of our industry, who are the rank and file ingredient supplier, contract manufacturer, and small retailer. Like elsewhere, many have a sinking feeling, while a few are doing spectacularly well. This middle part of our industry is the ballast of the boat and the gyroscope that keeps us balanced. As they are the center point between the consumer and the origin of ingredients, they are feeling the pressures of lower consumer prices but rising costs to meet GMP, quality, and global supply standards. 

Forging new strength

And then there is the Hammer. It began in January with the New York Times/Frontline​ expose on supplements and protein products. Like an anvil, the hammer just kept pounding in the form of the U.S. Attorney General’s highly critical video message to her staff about dietary supplements and some of its purveyors. Then Consumer Reports jumped in, as did the New York Attorney General in their settlement with NBTY and the FTC’s actions against Herbalife and Vemma with ominous messages to the rest of the direct selling industry. We saw the NDI draft guidance republished and many comments submitted, and finally a year-end Department of Justice settlement with GNC. I think it’s fair to say big retailers did not have an enjoyable year.

Loren Israelsen, UNPA

Yet, this Hammer and Squeeze have created heat and pressure, both necessary elements to forge, mold and strengthen our “steel”, and this, in fact, is what we are seeing: new systems to enhance quality and supply chain management, stronger procedures, more training, and investments in technology. Many others on all sides of the industry will be asked to support and participate in these new standards and practices.

So, as 2017 comes into view, we see the prospect of a different attitude toward regulation. There is uncertainty among career civil servants in government agencies wondering what their new mandates will look like. If, indeed, regulatory pressures ease, it would not be unsurprising if industries across the board follow that lead. But would it not be better to set a course that looks beyond the next few years and continue, for our own good reasons, to strengthen systems, quality, and rigor? 2017 may be a rare chance to test our resolve to take a more strenuous path when there is a fork in the road.

As has been said, integrity is what you do when no one is looking. 2017 offers the prospect to carry the hard lessons of 2016 into 2017 and beyond.

Related topics: Regulation

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