A new year’s resolution for the nutraceutical industry

Jan 23, 2023
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Many New Year’s Resolutions are still in full force!  January’s optimism is holding strong with uncluttered calendars, new gym memberships and a sense of renewal and improvement.  

This marks one of the most important times of the year for many brands in the nutraceutical industry. It’s a moment when consumers are turning their attention to self-improvementmost notably their health. Whether that’s dietary supplements, vitamins, protein bars, probiotics or energy drinks, consumers are spending more than at any other time of year on the pursuit of wellness and nutrition. 

As brands in this space look to capitalize on the demand for products that help consumers to achieve their goals, there is also an opportunity to look inward towards self-improvement with a focus on brand protection and supply chain “health”.  

The two sides of growth

Taking a step back, let’s first look at the global nutraceutical market. This is an industry that was reported to be worth $353 billion globally in 2021 and predicted to reach $658 billion by 2028 — according to a report by Fortune Business Insight.

This remarkable predicted growth is the result of a myriad of factors, but most notably driven by the increasing awareness that what you eat and how you live can lead to a better and longer life. The explosion of this attitude towards self-care and improvement has spread all over the globe with further growth predicted in almost all the major geographical markets. 

As in any industry experiencing a sudden boom, the increasing demand has brought inevitable challenges for nutraceutical companies. 

Unpacking the challenges

Leading the list of issues facing this industry is the increasing threat of counterfeit products. A steep market growth curve alongside rapid online retail growth provides reason and opportunity for counterfeit products to infiltrate the market. In so many ways this mirrors the experiences of the pharmaceutical industry. Yet in nutraceuticals there is typically no regulatory framework to protect both consumers and brands. 

In an article titled Keeping it Real – The Fight Against Fake Drugs, a striking example shows how lucrative counterfeiting can be in the pharmaceutical market. The article outlines how making counterfeit Viagra is up to 2,000 times more profitable than dealing illegal drugs. In fact, a $1,000 investment in counterfeit prescription drugs can result in a $30,000 return, which is ten times the profit rate of trafficking heroin. 

Equally challenging to the pharmaceuticals market is the issue of diversion. Diversion occurs when the authentic product is sold through or by an unauthorized seller or channel. This highly damaging issue threatens your supply chain integrity. Plus, when goods do not follow the expected supply chain route, quality is often compromised due to improper handling, and brand owners lose sight of their operations and performance. 

Bad actors in both the nutraceutical and pharmaceutical markets make use of the same technology that drives legitimate business. For example, printing technologies are available to counterfeiters that create near exact replicas of original items, creating deceiving imitations of original product labels and packaging.  

However, in pharmaceuticals current and emerging regulation is mandating the use of sophisticated new procedures to prevent these issues and protect consumers.

A ‘brand’ new resolution

Many nutraceuticals, by their very nature, are packaged and marketed like pharmaceutical products. This is essential brand positioning needed to communicate their medicinal benefits. After all, some of these products target health conditions as chronic and serious as diabetes, arthritis, digestion and even cardiovascular issues.  

Given this and the challenges that they share with pharma, the new year offers the opportunity to stay ahead of the issues—protecting consumers and brands alike. Many nutraceutical companies are already taking action. The question is: will this help them stay ahead of the threats? 

Steps in the right direction

Nutraceutical manufacturers have several methods at their disposal to protect their product. Most of them involve adding physical overt and/or covert features to product packaging. Typically, manufacturers are taking a mix of both approaches.  

The overt mechanisms can include seals and stickers—helpful, but alone they are far from enough. Whereas covert measures require teams of field inspectors and specialized authentication equipment.  

These tactics have their merits, but alone they are simply not enough to truly resolve the issues. To do this nutraceutical manufacturers require a digitally based layer to provide comprehensive protection. Nutraceutical manufacturers could look to mass serialization which would bring rigor on a par with pharmaceutical companies. Serialization also delivers digital identification at the individual item level.

The answer is simpler than you think

Another possible answer lies in leveraging what you already have… an existing barcode on your nutraceutical packaging. Printing is a dynamic process wherein there are environmental factors such as line speed, humidity and substrate that create micro-variations in the printed mark. These almost unseen individual changes in the QR or barcode can be used to derive a unique digital identifier, or e-Fingerprint®, for each individual product. This can then be authenticated using a mobile app.  

While you may have one million of the same UPC barcodes printed on as many products, e-Fingerprinting allows you to individually identify each one uniquely. Users are then able to easily scan these barcodes anywhere in the supply chain. This approach adds the digital layer of protection needed to ensure that every product is authentic, safe and connected for both brand owners and their consumers. 

Like all good resolutions, success is in making them realistic and achievable. Systech makes it easy to deploy these digital layers of protection with a highly configurable solutions platform. Not only does this offer a critical layer of product protection it’s the start of a journey that delivers transformative traceability across the entire supply chainbringing added protection to the consumer and enhancing your story. 

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