The Botanical Supply Chain Problem of 2021

The start of the new year was a sign of hope, more so than any other year in recent history. While everyone realized nothing would magically be fixed, we’re all crossing our fingers that 2021 will bring an end to the pandemic and the return to normalcy. For the most part. Hopefully, that’s in the not-too-distant future, but until then, most industries are still reeling from the pandemic. Nutraceuticals are no exception.

Not every niche of the industry is going through the same problem, though. Companies that use botanicals in their products are looking at severe shortages due to unforeseen increases in demand and transportation problems brought on by the pandemic.

The Botanical Problem

Plants only grow so fast. That’s not an earth-shattering factoid, but it’s one that’s leaving some companies desperate for new suppliers. Some botanicals, such as echinacea and elderberry, have seen demand skyrocket. This presents two problems for nutraceutical companies — finding these botanicals and importing them.

The first problem goes back to the basic principle of supply and demand. Traditionally there has been a steady, but not huge demand for these products. Farmers had no way of knowing there’d be a huge increase in demand due to a pandemic, so they planted the same number of crops as usual. The ensuing shortage will truly be felt in 2021.¹ In some cases, growing a good crop of these botanicals can take years, so trying to find a high-quality source will be difficult. And, since demand has dramatically increased, there’s the potential for the price of raw materials to follow suit. Business are going to wind up paying extra because there is no extra.

Importing is a problem in many industries. Globalization of supply chains was fine when borders were open, and transportation was largely reliable. But with unpredictable spikes, new laws and guidance surrounding the pandemic can change at a moment’s notice. The nutraceutical industry is largely dependent on India and China for many of its raw materials and travel restrictions are presenting problems for many companies.

The Digital Solution

It’s amazing what we can do with modern-day technology. Unfortunately, speeding up plant growth isn’t one of those things. However, modern cloud-based software solutions can play a big part in dealing with the botanical shortage about to hit the industry. When dealing with such a shortage or having to seek out new suppliers, one of the foremost concerns for responsible supplement companies is adulteration. As Larisa Pavlick of the United Natural Products Alliance put it: “Sadly, in any industry when there is an imbalance in supply and demand, you tend to see increased potential for corruption. For the dietary supplement industry, this means intentional adulteration via substitution, dilution or plain old fraud.”²

To avoid adulteration, nutraceutical companies need to have a high standard of quality throughout their supply chain. Many already have this focus, but how do you ensure new suppliers are on par when you can’t pay them a visit? Luckily this is one situation that there is a precedent for. Virtual audits were conducted even before the pandemic and now the practice is picking up speed. “Various auditing bodies and companies have established practices and policies for virtual audits to ensure their quality metrics are hit,” wrote Gemini Pharmaceutical Inc. CEO Michael Finamore.³ Businesses new to virtual audits can learn from more experienced ones about how they conduct virtual audits to ensure quality is maintained.

A major part of any audit or inspection is documentation. Figuring out how to share documents electronically isn’t difficult — figuring out how to share massive quantities of up-to-date documents securely is. Since nutraceutical companies are the ones doing the auditing in this scenario, that’s a problem the potential supplier will be facing. But it’s an important point for nutraceutical firms as well. If the supplier you’re considering doesn’t have the technology to let you conduct a remote audit, how much confidence will you have in their quality processes? It’s true you don’t need digital systems to maintain quality, but it certainly does help. In fact, firms that use digital systems can get your raw materials to you faster due to an ensuing 75%-80% shortened review time.⁴

Conclusion

Many industries face supply chain problems due to COVID-19. The shortage of botanicals is just one such problem for nutraceuticals, but it’s one the industry can overcome. By searching out other quality suppliers and using digital solutions to conduct remote audits, businesses can ensure they continue to receive high-quality raw materials so they can continue to make high-quality supplements.

Sources:

1. Daniells, Stephen. “Experts sound alarm over 2021 botanical supply challenges.” October 12, 2020. Retrieved from https://www.nutraingredients-usa.com/Article/2020/10/12/Experts-sound-alarm-over-2021-botanical-supply-challenges
2. As quoted in: Grebow, Jennifer. “2021 Regulatory outlook for dietary supplements, fuctional foods, and natural products.” January 12, 2021. Retrieved from https://www.nutritionaloutlook.com/view/2021-regulatory-outlook-for-dietary-supplements-functional-foods-and-natural-products 
3. Finamore, Michael. “COVID-19, supply chain transparency, virtual audits — A new business norm.” September 11, 2020. Retrieved from https://www.naturalproductsinsider.com/contract-manufacturing/covid-19-supply-chain-transparency-virtual-audits-new-business-norm
4. MasterControl. “Metrics That Matter for Quality Manufacturing.” Customer Spotlight. 2019.