Natural Products Insider

MAY-JUN 2018

INSIDER is the leading information source for marketers, manufacturers and formulators of dietary supplements, healthy foods and cosmeceuticals. Since 1997, INSIDER has been serving the needs of the global nutrition industry.

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60 INSIDER May/June 2018 Ingredient suppliers in the food, beverage and dietary supplement industries are going global to source raw materials, fi nd the best ingredients and help control costs. Sourcing ingredients from China has many advantages, but can also have some challenges and potential pitfalls, as well. Suppliers can leverage the resources of this vast region while remaining transparent and ensuring the highest quality ingredients for customers and consumers. China is a well-established exporter, and over time, has expanded and bolstered its infrastructure to support exports on a massive scale. This economy of scale allows for cost advantages and expertise. Through its long history of exports, China has evolved processes to meet global needs. It has advanced machinery and manufacturing capabilities, and offers continuous innovation and competitive costs. Today, manufacturers and consumers are demanding transparency and verifi able quality across the supply chain. Just as every country and region around the world has different standards and regulatory needs, China has many quality and safety controls in place to help ensure the integrity, purity and authenticity of raw material ingredients. Many raw material producers in China have longstanding experience with the ins and outs of varying international standards and regional requirements, adding tremendous value to ingredient suppliers and manufacturers. China is rich with natural and botanical resources, and has established and matured its agricultural programs to support sustainable supply. From a cultural perspective, China has a strong reputation of willingness to take on challenges to meet the needs of industry. As one of the largest raw material providers in the world, China has invested and continues to upgrade in massive scale and capacity. China continues to provide quality products with competitive costs and a sustainable supply. People should not view "Made in China" claims as negative. The country has made great strides in the food safety and quality regulations imposed on manufacturers. With that said, there is always room for improvement. The enforcement of these laws is still an issue, and adulteration and false claims still exist. Selecting high-quality, trustworthy manufacturers can be a signifi cant challenge. With proper vetting, companies can determine the best-suited partner and most trustworthy manufacturer. When possible, ingredient customers (buyers) should visit the production and manufacturing facilities in person. This helps validate quality claims, true capability and capacity. When working with partners in China, or in any region for that matter, it is important to ask the right questions. For example, require that the product is manufactured and the facility is operational during the audit or visit. While there, don't be afraid to ask questions, such as, "Are you the sole manufacturer?" "Do you source from other suppliers?" "What's the annual output?" "Where is your raw material stocked?" and "Can you show your production records?" If a small facility claims it can produce multiple products in large quantities, this manufacturer is likely being dishonest. Be clear, open and up-front regarding requirements and needs. When both parties are up-front and stay in sync throughout the process, trust—a requirement of solid relationships—is established. This also allows for fi nding solutions to challenges throughout the partnership, and before it is too late in the process. Look at other major companies that are trusted in the market, and fi nd out the supply partners they work with and why. This can help shorten the vetting process, and help in locating the right partner. Whenever possible, have third-party testing done on a sample to confi rm/verify claims and results. Another challenge is the result of customers/buyers focused only on securing the lowest price possible. For some customers, if the supplier can provide product, basic documentation and the lowest price, they choose to "trust" what they are receiving. In many cases, a quality assurance (QA) program and onsite audit are required to verify the supplier's claims. Dishonest suppliers will make false claims unless held accountable—and still often win the business with the lowest price. China Sourcing Sourcing Food, Beverage and Supplement Ingredients From China by Elaine Yu Many raw material producers in China have longstanding experience with the ins and outs of varying international standards and regional requirements, adding tremendous value to ingredient suppliers and manufacturers. The Bridge to China China has always been important to the supply side of the U.S. health and nutrition industry, but smart businesses are tapping into the growing Chinese consumer base. However, accessing Chinese consumers is not an easy task for U.S.-based brands who must navigate regulations and communication barriers. In the Healthy INSIDER Podcast: U.S. Nutrition Industry Strengthening the Bridge to China, Loren Israelsen, president, United Natural Products Alliance (UNPA), discusses how the U.S. and Chinese natural products industries are starting to align, with Sandy Almendarez, editor in chief. Listen to the podcast to learn more. naturalproductsinsider.com/legal-compliance/healthy-insider-podcast-us-nutrition-industry- strengthening-bridge-china Scan Here

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