Quality pressures create problems for small herbal companies

Legal, regulatory and self-policing measures aimed at tightening ingredient and supplements quality are having an unintended consequence: harming smaller-time herbal operators who have never had a problem with ingredient quality or consumer trust to begin with.

The FDA’s New Dietary Ingredients guidelines, the New York attorney general’s campaign against botanical supplements, and endogenous industry pressure to join campaigns around transparency are putting costs on everyone up and down the value chain. But while large supplement companies can absorb these costs, that’s not true for everyone.

“I’m a little leery about having a system put in place that benefits the larger companies versus the smaller companies,” said Beth Lambert, CEO of Herbalist & Alchemist, a botanical firm that’s been in business since 1982 and guided by renowned botanist David Winston. “I just don’t want to have to pay more money because consumers don’t trust other companies.”

That point was highlighted last week in an agreement reached between the New York attorney general’s office and NBTY, which is a large supplement brand that was also the contract manufacturer for Walgreen’s and Walmart—two of the four companies targeted for questionable product quality in a February 2015 sting operation by the NYAG.

In the agreement between the NYAG and NBTY, the supplement company said it will begin to implement a DNA barcoding protocol to confirm plant identification. It will also invest $250,000 in herbal authenticity genetic research.

“I applaud their work, but I don’t want their solutions to put our products off the market,” Lambert said. “In their move to try to increase their consumer trust, they are going to limit consumer choices, limit the ability of practitioners of properly made extracts made in small volume available for only a certain period of time.”

Lambert said her company receives whole herbs into its facility, so employees can actually identify the plant material by traditional organoleptic methods—sight, smell, taste. (The company also employs third-party testing to assay heavy metals and microbiological activity.)

DNA barcoding, while an emerging—and expensive—technology that can be used to help identify incoming raw materials, is suited for large companies that receive pallets of nondescript powders from around the world.

“We are seeing, with increased scrutiny of our supply chain, the impact this is having on smaller herbal suppliers,” said Travis Borchardt, vice president of regulatory affairs for Nature’s Way, a large supplement manufacturer. “We can see it and feel it.”

Nature’s Way has one of the widest lines of offerings of different species of herbs in commerce, according to Borchardt. He said the company is dealing with instituting standardized quality control practices on wildcrafters of obscure herbs.

“The point is balance,” said Borchardt. “We’re talking balancing from a risk perspective—doing things the right way, but that don’t limit consumer choice.”

This problem is also being considered by GNC, the largest retailer of supplements. More than any other actor in this drama, GNC has acted the swiftest and with the deepest shifts in how they do business down the supply chain. This includes implementing good farming and harvesting practices, as well as tightening up practices on the portion of the process after the farmer delivers products to an intermediary that processes the material before sending it along to GNC.

“Big companies have more resources to implement more and faster, versus smaller companies that need help,” said Guru Ramanathan, PhD, chief innovation officer at GNC. “We are keeping small farmers in mind in helping them with the tools and techniques and providing them with simple templates—have you done these three things, translated into their language, videos with the sequence they should follow. Larger companies are doing this for free and making this become a standard practice.”

Borchardt said Nature’s Way has put together an audit checklist for everyone from harvesters to raw material processing facilities and testing laboratories that validate the ingredients and finished products.

And there’s no shortage of quality certifiers that will validate ingredients and supplement finished products—NSF, USP, UL, NPA and CRN are such prominent organizations doing this kind of work.

But for herb companies that are not nearly of the scale of a Nature’s Way or GNC, will the pressures coming from regulatory and legal bodies compel them to institute some of these testing and validation protocols, even when it is not necessary?

“There’s a cost for us to have to have all these additional certifications,” said Lambert. “I want consumers to trust our products, but this is another burden on smaller companies. We have far fewer zeros in our numbers than some of the larger companies, and I am concerned that some solutions are for some of the companies to develop broad trust. We don’t have that issue with our customers.”