From technical expertise to market insight, many suppliers offer a host of value-added perks that benefit long-term brand partners.

Karen Butler, Senior Managing Editor

June 7, 2019

7 Min Read
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Part of the problem is rooted in misconception. For instance, some brand holders may think a supply partner doesn’t provide much value beyond a given product or service. Andrew Rice, director of product and brand strategy at Stratum Nutrition®, was quick to counter. “We absolutely want to ensure our customers find success with the products they masterfully create with our ingredients so that our brand partners and their customers both benefit.” Stratum’s value-add comes from internal resources it offers at no extra cost, such as brand, marketing, science and formulation consulting. “This is our way of ensuring they aren’t just getting an ingredient, but something that will help them find product launch success, build a stronger relationship with our company, and above all else, benefit their customers’ health and wellness.”

Shaheen Majeed, president worldwide at Sabinsa, said raw materials sourcing is an additional area brands may misunderstand. “Brand holders often worry that suppliers will fall short of supply, but in fact, good suppliers anticipate and take action to address potential shortfalls well in advance; that knowledge alone is worth its weight in gold,” he stated. “In the world of botanical extracts, if there is too much rain or not enough rain during the growing season, we can predict the outcomes fairly accurately; this can help the brand owners make adjustments. Supply chain risk mitigation is something that both suppliers and brand holders can, and should, work on together.”

Brand holders looking to formulate with USDA Organic ingredients should work closely with trusted suppliers. Saumil Maheshvari, senior vice president of business development, Orgenetics Inc., said a significant lag in organic supply can occur when trying to meet demand. “It often takes years for farms to become Certified Organic, and it also is sometimes not easy cultivating crops as USDA Organic,” he pointed out. Close partnership with an organic supplier allows a “forward mapping of supply/demand … to build out a supply chain of the future, for the future consumers.”

Maheshvari suggested, “This sort of ‘vertical collaboration’ can be the brand owner’s relevant teams reaching out to their specified supplier, and working with them through the entire product development’s stages—from inception/formulation to the marketing and timing of launch, etc. Having clear launch timings and expectations alleviates strains on USDA Organic supply chains (upstream to the farmer even), and it helps the supplier better manage investing in growth. It also secures new organic supply for the brand’s new products/projects.”

Beyond supply chain, Majeed suggested brands ask detailed questions of suppliers regarding testing protocols and standard operating procedures (SOPs). “A common misconception is that suppliers only test the first shipment and nothing after—this may be true of some suppliers, but should not be assumed,” he said.

Audits are another area where trust can be built. “Suppliers should expect to be routinely audited,” Majeed noted. “Any supplier that cannot or will not accommodate an audit by a customer should be suspect. It’s a basic GMP (good manufacturing practice) requirement.”

Finding the Right Fit

The first step to building a strong relationship is identifying the right partner. Rice suggested—more often than not in this industry—brands and ingredient suppliers that possess shared values end up finding each other. “You can immediately get a feel for whether or not a brand, manufacturer, distributor or partner of any kind aligns with your company values, mission and culture,” he said. “Natural product brands that are run on a passion to provide consumers with the highest quality formulation and ingredients within their product to maximize the health and wellness of the customer will always win over companies with ulterior motives. Every company wants to find financial success and growth, but for us, true success starts with the end customer, partnering with like-minded companies, and the rest will follow suit.”

As an early-adopter organic supplier, Maheshvari also ascribed to the power of aligned ideals. “We have selectively partnered with customers that have embodied our beliefs and values of bettering the world and consumers with clean products,” he noted.

Ironically, some of the strongest supplier relationships develop ‘organically.’ Majeed shared the story of a customer he spoke with years ago; the company owners’ daughter was involved with co-op farming in Africa. They told him about her dedication and stories of the farmers in those areas. “I could see we shared a similar passion, so I shared how we also work closely with farmers, beyond just paying them a fair price, but in fact actually helping with things like with monetary loans, fulfilling irrigation requirements, and teaching them about best agricultural practices, which touched the heart of the owners,” he recalled. “Not too long ago, they visited our farms in southern India, where we spent several days touring various farms and meeting with farmers. Today, they are one of our largest buyers.”

Beyond shared values, brand holders must also sense their own value in the partnership. Kate Pastor, senior vice president of Superba North America, echoed other suppliers who said they genuinely care about their customers’ success. “Customer-centricity is at our core,” she stated. “Customer solutions are never one size fits all; therefore, we work side by side with our partners to customize various programs and initiatives across the board.”

Rice said a supplier should be able to offer its customers a competitive edge to help them stand out in the marketplace. “They [suppliers] should be able to provide more value than just supplying a company with a cheaper ingredient, product or service. If it’s all about price, it can only go downhill after that,” he cautioned. “Look for companies that provide intrinsic value beyond list price. Can they save you time? Money in overall formulation cost? Regulatory and science efforts? Fill in any gaps your company might have in personnel, technology and/or any other resources?”

Steve Fink, vice president of marketing at PLT Health Solutions, said his company provides a holistic working relationship by engaging customers at multiple levels across the organizations. “For example, our scientific, regulatory and marketing personnel work directly with similar disciplines within the customer,” he explained. “There is a deeper sharing of goals and aspirations, and more feedback on potential directions.”

Pam Stauffer, global marketing programs manager at Cargill, deduced, “The days of food and beverage makers going it alone are long gone, if they ever existed.” She added, “In today’s marketplace, ingredient suppliers don’t just fill orders—we’re delivering real value to our customers by leveraging our deep consumer insights; vast global supply chains; broad ingredient portfolio; and extensive formulation, application, ingredient and regulatory expertise. Close collaboration, often starting early in the ideation process, is the new norm.”

Shitij Chabba, vice president of marketing, human nutrition and health, North America, DSM Nutritional Products, agreed more brand owners want the increased value derived from integrated partnerships with suppliers. It’s a positive change he said helps accelerate innovation. Additionally, Chabba noted, “Our customers expect us to speak their language.” To help accommodate, DSM structured its business by market segment, so its functional experts can better understand customers’ challenges, whether pertaining specifically to early life nutrition, dietary supplements, food and beverage, or other areas.

One final consideration in building stronger brand/supplier partnerships: the end user. Maheshvari said it’s important to remember consumers are becoming increasingly invested in their purchases—not to mention aware of their purchasing power. “This new era of consumerism makes it important for brand owners to really convey not only their product and price point, but also the story behind the product and brand,” he shared. “That story can include the values that the brand stands for, innovations and strides made for the product, and the supply chain behind that product. More consumers want to be empowered by this knowledge/information/data, and [they] want to make an informed decision on what they are buying.”

Fink agreed. “As consumer demands for innovation, trust and transparency increase and as the world becomes more quality conscious, successful ingredient suppliers will continue to make the investments in personnel, systems and infrastructure to become a better partner with consumer product companies.”

Perhaps the best news for quality-driven companies? As Fink put it, “The days of ‘ingredient for a price’ are quickly coming to a close.”

Pastor also gave a nod to the high road, noting the efforts to build better relationships are fueling other types of dividends. “Open innovation thinking, in which brands collaborate with suppliers to co-create unique value, helps drive success,” she concluded. “When brands can harness the determination, knowledge and creativity of their partners, everyone wins.”

About the Author(s)

Karen Butler

Senior Managing Editor, Informa Markets

Karen Butler is a senior managing editor at Informa Markets. For nearly 25 years, she’s worked in a variety of editorial roles, covering topics such as animal nutrition, functional food & beverage, and dietary supplement ingredients and trends. She most enjoys working behind the scenes as a copyeditor, as well as building community and supporting a team. Reach her at [email protected].

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