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Diversifying supplement supply chains: Navigating global challenges for managers

A new report investigates the state of the global supply market, from today’s giant, China, to tomorrow’s potential value source, India.

Todd Runestad

January 23, 2024

2 Min Read

At a Glance

  • China is the global source for sourcing supplement ingredients.
  • Various factors are leading companies to diversify sources away from China.
  • India is eager to establish itself as a quality global producer.

China is incredibly efficient and produces high-quality raw materials used in most dietary supplements sold in the U.S. market. Yet diversification of supply chains is being discussed by brands thanks to recent macro forces — the pandemic, its related effect on global inflation, the Russian war in Ukraine and realpolitik musings on how it might influence China’s action vis-à-vis Taiwan, and saber rattling for domestic audiences both in China and the U.S.

The SARS-CoV-2 virus that upended societies and economies across the world is still exerting temblors. While the cost of shipping as well as lead times have improved significantly, ingredient buyers and supply chain managers must still contend with price fluctuations, some due to importation tariffs.

While the cautiously optimistic hope is that supply chain headaches will subside, the challenge remains around the rapidly increasing price of Chinese herbs across the board. This affects demand, availability and supply all at once.

The history of sourcing nutraceutical ingredients, whether botanicals or specialty ingredients, has always been one of moving to search for ever lower-waged workers. India has emerged as a source. Already, India is a major supplier of herbal extracts for the $13 billion U.S. herbal and botanicals market, with about a quarter of the top 40 extracts being of India origin.

Yet India — or any other national source — would have work to do to catch up with China in other areas like chemical manufacturing capacity and expertise.

So how does a supplement brand, broker or contract manufacturer go about looking to diversity its ingredient sources? What are the considerations at play? How can bridges be built to other places like India — which is eager and ready to take the next step and help establish itself as a quality global producer?

To get the inside track on these issues, be sure to purchase this Natural Products Insider 2024 supply chain report as part of your registration for SupplySide East.

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About the Author(s)

Todd Runestad

Content Director, NaturalProductsInsider.com, Natural Products Insider

Todd Runestad has been writing on nutrition science news since 1997. He is content director for NaturalProductsInsider.com and Natural Products Insider digital magazines. Other incarnations: supplements editor for NewHope.com, Delicious Living!, and Natural Foods Merchandiser. Former editor-in-chief of Functional Ingredients magazine and still covers raw material innovations and ingredient science.

Connect with me here on LinkedIn.

Specialty

Todd writes about nutrition science news such as this story on mitochondrial nutrients, innovative ingredients such as this story about 12 trendy new ingredient launches from SupplySide West 2023, and is a judge for the NEXTY awards honoring innovation, integrity and inspiration in natural products including his specialty — dietary supplements. He extensively covered the rise and rise and rise and fall of cannabis hemp CBD. He helps produce in-person events at SupplySide West and SupplySide East trade shows and conferences, including the wildly popular Ingredient Idol game show, as well as Natural Products Expo West and Natural Products Expo East and the NBJ Summit. He was a board member for the Hemp Industries Association.

Education / Past Lives

In previous lives Todd was on the other side of nature from natural products — natural history — as managing editor at the Denver Museum of Nature & Science. He's sojourned to Burning Man and Mount Everest. He graduated many moons ago from the State University of New York College at Oneonta.

Quotes

"There is not a colds-and-flu season. There is a vitamin D-deficiency season."

"There is no such thing as inclement weather. Only improper attire."

Link answers question, "When taking magnesium, should you also take vitamin D3 2,000 IU?"

"Cannabis is nature's most nearly perfect plant."

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