Pinocchio was more than a wooden marionette whose nose grew when he told a lie. That was a minor part of the story about a
disrespectful puppet who avoided responsibility and got into all sorts of mischief. The metaphor can only go so far, but industry needs
to look itself in the mirror and see who’s looking back, Pinocchio or a real boy (or girl)?
We’ve seen an amazing, disturbing focus on DNA testing when in fact the current state of that testing for widespread plant identity
testing is undoubtedly a work in progress—it’s a Pinocchio instead of a real boy. The same can be said about the lack of standards used
to identify botanical ingredients. Official standards for herbs of commerce have been around since 1820 with the establishment of the
United States Pharmacopeial Convention (USP).
Herbal drugs faded from public view by the late 1950s but a cultural resurgence in the 1960s started a movement that brought
botanical materials back in popularity. USP now develops monographs that serve as quality standards for the gamut, covering food,
supplements and drugs. Again here, the supplement industry appears to be largely disengaged.
The focus on cGMP auditing and product testing is great. But it doesn’t address the foundations that support product manufacturing and proof of quality. Those basic pillars include monographs, scientifically valid testing, certified reference materials, and competent laboratories. We are all stakeholders in these activities and need to be engaged in order to build an industry about which it cannot
be said there are too many Pinocchios and not enough real boys.
There is a caveat here too. Methods, standards and results satisfy the specifications-results-certificates of analysis triad, but quality
is more than what can be tested for. Quality can’t be tested in. Quality results from the complete processes within the supply chain
and how raw materials are created. Good Agricultural and Collection Practices must precede GMPs.
Authenticity and true herbal integrity also extend beyond testing and agriculture. You’ve found it when the communities that produce the materials are also included. The circle of people and plants, which after all is the story of herbal use, is connected when the
people and the general ecology from the production region are taken into account and fostered. The path for Pinocchio to become a
real boy required study and sacrifice. What mattered most was what he wanted to become, not how difficult it was to get there.
—Steven Dentali, PhD, Botanical Industry Consultant
The concept of“you are known by the company you keep” is as old as Aesop and King Solomon. In 2016, and
going forward, it may be said the dietary supplement industry can be known by the companies that are not kept.
Industry mergers and acquisitions were active in 2016 and the outlook on the horizon in 2017 indicates the trend is
expected to continue. Investment in the dietary supplement industry has come from both strategic and private equity
sources. Swander Pace constructed a strategic initiative atypical for private equity by purchasing the complementary
organizations of Swanson Health Vitamins and the soft gel contract manufacturer Captek in Cerritos, CA. The combination of the two entities is considered a significant increase of value for each organization based on the synergies
each provides the other.
GNC is the largest and most talked about upcoming opportunity with management openly marketing the company. Current estimates on the value of GNC is $4 billion. In October, the Wall Street Journal reported GNC officials met with several Chinese investors
who have been actively interested in the vitamin industry. Chinese investors are very interested in U.S. supplement brands as a result
of a loss of confidence by their domestic consumers. Chinese pharmaceutical and milk scandals have made the“Made in the USA”
label a valuable asset for vitamins in China and elsewhere. HKTDC Research in China reported the Chinese market for vitamins is approximately $15 billion and expected to continue to increase at double-digit annual rates. As the world’s attention to health increases,
the likelihood of continued acquisitions of vitamin companies increases likewise.
—Scott Steinford, President & CEO, CoQ10 Association and NAXA
As an ingredient supplier, 2016 has been the year of the“supplier survey.” Everyone is tightening down any loose
ends of their cGMPs with pages and pages of questionnaires regarding quality assurance, origin, production, warehousing and handling. I think this speaks well for our industry that is so often accused of“not being regulated” in the
mainstream media. Manufacturers are asking the deeper questions such as“where did this come from?” and“how
did it get here?” Prices should eventually reflect this demand for identification and quality control, but competition
is fierce and the added costs may just get absorbed as the price of doing business.
Regulation continues to be a big concern and the wrangling over the proposed New Dietary Ingredient (NDI)
notification process is a head scratcher. Let’s all hope common sense plays some role in the NDI situation and we can keep evaluating
new ingredients for consumer safety, period. The idea of evaluating every possible combination is the beginning of the end and it will
kill proprietary product development, a key driver of growth.
The mood was upbeat at the fall trade shows, but the Food, Drug and Mass Market companies are still very cautious about launch-
ing new products. Heart health, pain management, bone health and circulation are doing well in terms of growth categories and new
product launches. Probiotics are still going strong and we continue to believe algae-based products will be future growth drivers, as
soon as we“work the bugs out.”
The U.S. dollar remained strong into 2016 as did the Japanese Yen. Non-U.S. companies selling into the U.S. are helped by this, but