2016 is going to be a dynamic year for the dietary supplement industry. It’s also going to be a critically important year.
In 2015, industry navigated some unpleasant surprises, the biggest being a probe led by New York Attorney General Eric Schneiderman in which Schneiderman accused national retailers of carrying contaminated herbal supplements and supplements that didn’t contain ingredients listed on the labels. The following months brought more attacks led by state attorneys general, repeatedly berating the regulatory framework that governs dietary supplements. What’s more, it’s likely that state authorities will continue enforcement efforts in industry in 2016.
Attorneys general aside, industry faces ongoing threats to its reputation caused by intentionally adulterated products in the market, negative media attention and the resounding belief by many consumers that this industry isn’t regulated.
These challenges aren’t news, and responsible, proactive members of this industry are relentlessly defending its reputation. This will continue in 2016. However, brand owners will behoove themselves to look beyond the needs of “right now," and focus on the “big picture," and that big picture revolves around the issue of trust, or lack thereof. Ultimately, the question supplement companies need to be asking themselves when looking forward into 2016 is: What can I do as a brand owner to establish trust with my customers?
INSIDER explored the market to see what companies and other organization are doing to establish trust with their customers, and how those tactics will evolve moving into 2016:
Transparency 2.0 – Consumers want more information—that’s no secret. They want to know what ingredients are in the products they consume, where those ingredients are from, and what functions they provide. That’s in addition to claims that explain a product’s benefits and information regarding sustainability efforts or other ethical initiatives. While brand owners are doing a better job of providing the information consumers want via product labels, advertisements and company/product websites, forward-thinking companies will take it a step further in 2016 (and beyond) to make information more accessible to consumers.
Take, for example, the SmartLabel™ initiative launched by the Grocery Manufacturers Association (GMA) earlier this month. SmartLabel will allow consumers instant access to detailed product information (for household, food and beverage products) via QR codes on the products’ labels. Each product’s landing page will be uniform for easy navigation/comprehension and by 2017, GMA anticipates the program will disclose GE (genetic engineering) content, as well.
Importantly, for transparency efforts to be successful, they must be both robust and simple, so as to appeal to the consumer who simply wants to know more and the consumer who wants to know everything. In addition, successful transparency solutions will be easily accessible, clear, concise and free of marketing “gimmicks."
Ethical Avenue – While transparency is great, it’s only one step in this dance. Largely, whether a company will gain the trust of its customers is based on the story it tells. Consumers are increasingly basing their purchasing decisions on whether a company’s ethics aligns with theirs. However, Mintel reported that half of Americans agree that marketing products as “ethical" is just a way for companies to manipulate consumers. Instead, Mintel reported that the most commonly considered factor when determining a company’s ethics is employee treatment (48 percent), followed by where its products are made (34 percent) and if the brand/or product is environmentally friendly (33 percent). In 2016, forward-thinking companies will focus on connecting with customers via its story, which is developed and reinforced by the actions it takes.
Certifications – An increasingly safe safety net for dietary supplement manufacturers, certifications will only continue to gain traction in 2016. Consumers are skeptical of big business, and are often more likely to trust certain organizations than a big business. One prime example can be seen with the Non-GMO Project, whose certification has seen immense growth in recent years. The total sales of Non-GMO Project verified products jumped from USD $348.8 million in 2010 to $10 billion in 2015, according to data from SPINS. Certifications can help businesses align with organizations their customers trust, which will, in turn, boost consumer confidence in those businesses.
Not only will more products carry certifications on their labels, more organizations will offer certifications for a growing range of attributes—sustainability, ingredient awareness, and those to highlight companies who utilize GMPs (good manufacturing practices).