As defined by market research company Transparency Market Research, nutraceuticals are products that provide nutritional benefits in addition to the basic nutritional value present in food. Products considered to be nutraceuticals can range from vitamins and herbal supplements, to food and beverages with added vitamins and/or other supplements. The market is a growing one thanks to lifestyle changes and rising costs of traditional healthcare options. Transparency Market Research suggests the global nutraceutical market was $165.62 billion in 2014 and will grow at a CAGR of 7.3% to reach nearly $280 billion in 2021.
 
Regulatory requirements for nutraceuticals vary from one country to the next, much like pharmaceuticals. However, within the U.S., nutraceuticals face less stringent government oversight. Currently, manufacturers are responsible for following FDA good manufacturing practices and making safe nutraceuticals, but do not require FDA approval before they can sell a product or register products with the agency. As a result, the market has come under political scrutiny.
 
Additionally, issues related to nutraceutical supply chains have prompted calls for the FDA to develop specific manufacturing and supply chain management requirements. Until those supply chain requirements are developed, nutraceutical companies should take the lead in supply chain enhancements to ensure the safety and integrity of products.
 
Know Your Suppliers
The nutraceutical supply chain is global and encompasses a wide variety of products. A nutraceutical company may know its tier one suppliers, but might not know its suppliers’ suppliers and their suppliers. It’s important for companies to do their homework and make sure a reliable IT system is in place to collaborate with all suppliers to ensure good manufacturing practices are in place for all suppliers, as well as ensuring that ingredients are being sourced correctly and timely, and ethically. In addition, real-time visibility throughout the entire supply chain is necessary as well as tracking shipments, inventory and more. Business consulting firm Armanino suggests that an enterprise resource planning tool (ERP) can be useful to track events such as out-of-specification reports, deviations, non-conformances, corrective actions and complaints.
 
Packaging & Labeling
Nutraceuticals encompass a wide range of products. Similar to pharmaceuticals, packaging considerations should consist of tamper-resistance to ensure safety and mitigate possible counterfeits as well as temperature sensitive needs. Leading logistics providers such as DHL, FedEx, Kuehne + Nagel and UPS offer FDA approved solutions for pharmaceuticals, which can easily be utilized for nutraceuticals. Proper labeling of ingredients should also be considered to ease any customer’s concerns.
 
In addition, nutraceutical companies must consider the packaging aesthetics. Many of these products do not hide on pharmacy shelves or in a doctor’s office but are displayed in specialized stores, grocery stores and other retailer locations. Like other products, nutraceuticals are competing for customer eyeballs and shelf placement is just as important for this group of products as a box of cereal or coffee.
 
Lastly, sustainability is important. Customers looking for a “natural” alternative to traditional medicines often expect packaging to reflect an appreciation of the environment. The Association for Packaging and Processing Technologies has noted the increase in packaging options such as recyclable, reusable and degradable. According to an infographic produced by the group, plastic bottles have become the leading container choice for consumers because of the ability to recycle them.
 
Transportation & Fulfillment
As noted previously, the nutraceutical supply chain is a global one. Maintaining safety and integrity of the product is important throughout its transportation. Temperature sensitive products will require specific packaging, tracking and monitoring. Prior to arrival to the U.S., decisions such as drop shipping, zone skipping, warehousing and final destination must be made. Is the product going to a warehouse, a retailer, a doctor’s office or direct to a consumer? It’s important to have a good supply chain consultant as a partner to advise on solutions for such questions. Fulfillment and shipment solutions will depend on final destination and can financially impact the bottom line.
 
Nutraceutical companies should also consider a periodic review of their supply chain network. Customer needs and demands can change year-to-year and supply chains should adapt to meet these needs and remain agile. Perhaps an additional distribution center is needed or maybe a reduction in the number of LTL (less-than-truckload) truck carriers is needed. Periodic reviews of such networks will not only keep one’s network agile but can also reduce costs.
 
Costs
Spend Management Experts
Brian Broadhurst brings more than a decade of experience leading large-scale global transportation cost reduction initiatives to Spend Management Experts. As Vice President of Transportation Solutions he is responsible for account delivery services, internal process improvements and strategic data modeling initiatives.
He can be reached via the Spend Management Experts website at http://spendmanagementexperts.com/contact/. Website: http://spendmanagementexperts.com/