While the US-China trade war has had little impact on the dietary supplement industry up to now, that could be set to change. The threat is out there that many previously exempt products, including the ingredients for dietary supplements, may be subjected to new, 25% tariffs.
That could equate to rising prices at the shelf. When I posed the question recently to several industry sources as to whether higher prices might equate to lower sales, the response was that it depends on the elasticity of demand. If a given supplement were to, say, rise 10% or 15% in price, would some consumers drop it just on that basis alone? Or would they buy the products regardless of the price (within reason, of course).
Trust underpins market
The willingness of supplement consumers to continue to buy their supplements depends on how much they trust that those products will do what they say they will and that they are correctly manufactured.
Many supplements have effects that are prophylactic in nature, or are subtle. For many of these the strongest evidence might be epidemiological. And there is not a lot of hard evidence that shows why certain consumers respond well to a given supplement and others don’t (to be fair, that information is lacking for a number of drugs, too).
So if prenatal omega-3s lessen the risk of premature births, for example, how can you be sure it will do so in your case? You can’t know; you can only trust that what the companies are telling you is the truth. And you also have to trust that the supplement they are selling you conforms well enough in terms of dosage and product specification to what was studied that it can infer the same benefits.
Antioxidants, omega-3s provide cautionary tales
The dietary supplement industry has weathered other storms before, both in terms of trust gaps and the vicissitudes of the economy. There was the collapse of the antioxidant construct. While that was based on actual data, it was the results of tests in a petri dish, and those soaring ORAC values proved to have an uncertain relationship at best with positive health outcomes in the body. It got to the point where the USDA took down its ORAC database, because marketers were perceived to be blatantly abusing this idea.
Yet antioxidant ingredients have survived. While they can’t shout their ORAC numbers from the rooftops, they have been able to make a case for the role of these ingredients in ameliorating chronic inflammation.
Then there were some equivocal large term studies that came out on omega-3s. This is perhaps the oldest dietary ingredient in the industry, with a marketing history stretching back into the 1700s in the form of cod liver oil, yet those studies were enough to seriously rock the boat. They caused a market that was growing in solid double digit range to flatten and, for a time, to even contract. But the demand picked back up for omega-3s and while the market is showing signs of maturity (meaning the days of double digit growth might be gone for good), it is growing again and there is still plenty of research being done in this space.
On the economy side, the dietary supplement industry as a whole weathered the 2008-2009 financial collapse better than most. Some industries, such as the newspaper business, took a grievous hit during the recession, and its problems have only worsened since. The supplement industry, by contrast, continued to grow throughout, even though the rate of growth did slow a bit.
Trust must actively maintained
The above examples would seem to augur well for the notion that consumers trust these products and believe in their utility. But that is no cause for the industry to rest on its laurels.
I think it's imperative that companies in this space support the initiatives that will continue to prop up consumer trust. It can be lost quickly, and once gone, can be hard to restore. A story published today on our sister website shows that four cases of hepatitis in Italy have been linked to curcumin extracts coming out of India. Stories like these, while ephemeral and restricted in nature, tend to stain a category and can be hard to get rid of.
Therefore I think it’s incumbent on every responsible company to support industry initiatives that boost trust and transparency. Industry initiatives like the Botanical Adulterants Prevention Program, for example, which has been chosen as a finalist in NutraIngredients-USA’s upcoming annual awards for Industry Initiative, help bolster the quality image of the industry. Anothe industry initiative—and another awards finalist—is the GRMA’s effort to standardized GMPs for dietary supplements.
With the cushion of trust and goodwill that seems to buoy the sector among its loyal consumers, the dietary supplement industry probably has little to fear from any trade dispute fallout.
But the case of the newspaper industry provides a cautionary tale. “I read it in the newspaper,” used to be a statement that something was generally believed to be true. Now the industry struggles with charges of fake news leveled at it by people in positions of authority, and some of the electorate has gobbled this line of thinking up. While that development is not the sole cause of the industry’s woes, it definitely doesn’t help.
How many tainting scandals would it take for consumers to start to thinking along the same line about supplements? They’re all junk in a bottle sold by shysters? Who wants to find out?