Despite the challenges caused by the global pandemic and supply chain disruption, the dietary supplement industry reached new heights over the last few years. The importance of supplements to personal health along with the expanding trust the customers have in the supplement industry allowed the industry to record strong profits and exceptional growth.
The remarkable part of this story is that this all occurred during a period of innumerable challenges particular to the industry. For instance, while most people are aware of the supply chain bottlenecks, this disruption was compounded for the industry by the combination of unplanned market growth, labor issues, and ingredient availability from Asia. Everyone has horror stories of resourcing, inferior products and unkept promises despite best intentions. Looking back, the Brand Owner’s choice of manufacturing partner to help navigate these challenges was never more critical than during this time.
The industry is now entering a new phase with an uncertain economy, which will pose additional strains on these relationships. Everyone is aware of the inflationary pressures in the market and how take home dollars are being stretched around the world. While the industry has always been seen as “recession proof” since people traditionally increased supplement usage to offset expensive medical treatment, these truisms occurred in a time before Obamacare, virtual medicine and On-line marketplace dominance. As these changes and others have dramatically changed the healthcare landscape since the last economic downturn, it’s clear the industry is entering uncharted waters.
Across the industry it can be seen that many Brand Owners are now approaching the next 6 months cautiously – reducing inventories, extending lead times on orders and postponing new product launches. This is going to have a ripple affect across all aspects of the industry, as manufacturers will do the same with their raw material orders. This will impact suppliers around the world as farmers, refiners and importers will also back off on production. However, what happens if market conditions change and there is a rapid increase of demand? Or if history holds and growth continues despite a challenging economy? Or if the see-sawing market continues to disrupt planning? Careful planning between the Brand Owner and their manufacturing partner will be the only path for continued success during these times.
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