It’s Time for a Dietary Supplement Retailer Code of Ethics

While better than some sectors, as an industry, dietary supplements have never achieved total trust from all of our constituents, including consumers, media, and regulators. Some of this mistrust is warranted, but there’s no question that we get a bad rap. 

In December 2019, in this column, we introduced the concept of The Dietary Supplement Consumer Bill of Rights. These rights included: 

  • The right to safe: to be protected against the marketing of goods which are hazardous to health or life. 
  • The right to be informed: to be protected against fraudulent, deceitful, or grossly misleading information, advertising, labeling, or other practices, and to be given the facts he needs to make an informed choice. 
  • The right to choose freely: to be assured, whenever possible, access to a variety of products and services at competitive prices; and in those industries in which competition is not workable and Government regulation is substituted, an assurance of satisfactory quality and service at fair prices. 
  • The right to be heard: to be assured that consumer interests will receive full and sympathetic consideration in the formulation of Government policy, and fair and expeditious treatment in its administrative tribunals. 

President Kennedy first expressed the importance of these statements in 1962, and the importance of these rights has increased as the consumer marketplace has become much more complicated with the rise of an omnichannel environment. These rights remain a foundation for both today’s consumers and retailers alike, but it gets complicated as we try to imagine what this means broadly for retailers. We should note that IADSA (International Alliance of Food/Dietary Supplement Associations) very recently published its Code of Ethical Principles (so this subject is certainly relevant). In theory, this covers anyone along the supply chain, but a dive into it clearly shows that something special is needed for retailers. 

It is time to develop a retailer Code of Ethics to include the new marketplace challenges, addressing regulatory and legal requirements including responsibilities that focus on supplier vetting. It is time to create an industry initiative that will encourage consumers to make this Code of Ethics a requirement for all the retailers they use. 

The proposed Trust Transparency Center Code of Ethics for Natural Products Retailers: 

  • Our organization will require clear label transparency, including truth in advertising and marketing. 
  • Our organization will require adherence to all FDA cGMP manufacturing requirements for the products we buy. 
  • Our organization will require manufacturer evidence of an AER and SAER reporting system for all products sold to reinforce our commitment to consumer protection (as required by the FDA). 
  • Our organization will not sell products that have received FDA Warning Letters until the FDA response has concluded proof of a remedy. 
  • Our organization will require evidence of claim substantiation on all new products. 
  • Our organization will require notice that there is a Quality Control Trained Individual designated by each brand. 
  • Our organization will require each brand to supply evidence of SOP information including: 
        • QC/QA Testing Policy 
        • Retained Sample Policy 
        • Label Review Policy 
        • Certificate of Analysis Review Policy 
  • Our organization will require immediate notification of all FDA inspections, specifically any Warning Letters  that arise through their inspection.  
  • Our organization will require a review of Product Lot and Expiration Tracking. 

Let’s look at why this action is necessary now.

The marketplace is continuing to evolve at a record and unimaginable pace. The Nutrition Business Journal 2021 Supplement Business Report states: 

For the first time, direct-to-consumer sales of vitamins eclipsed sales in the natural and specialty channel. For the biggest share of the biggest category in supplements to make such a channel shift is a telling moment in the history of the industry. 

This sobering fact is important because the voice the digital space commands for dietary supplements is now louder and carries more weight and responsibility than ever before. There was a time when an irresponsible retailer in Seattle, WA, would have little impact on a retailer in New York and vice versa. Those days are gone as now a retailer anywhere can impact the trust and confidence of a consumer elsewhereNever before has consumer trust been such an essential component of retail.   

Trust is arguably more important in the dietary supplement industry because of the personal nature of expected health benefits and the fact that these products are ingestedWhen consumers research an ingredient mentioned in a clinical trial and decide to try that ingredient as offered in a retail product, the likely outcome is to decide the ingredient does not work and possibly to taint their opinion about both the brand and other supplements as well.  

Trust Transparency Center, through its Ingredient Transparency Center, recently conducted and reported on U.S., UK, and German consumer trust, asking these consumers about their trust in online dietary (food) supplements. While about half of all consumers said that they didn’t purchase any supplements online (45% in the U.S.), of those that did, more consumers were very or somewhat comfortable doing so, and were gaining trust (65% in the U.S.) than were losing trust or hesitant to purchase online (34% in the U.S.).  

 

The ITC report indicates trust in online retailers is growing. However, the realities underpinning this trust are fragile at best and often non-existent. In Trust Transparency terms, this is called a Trust Transparency Collison–when the reality is different from the perception, a collision of trust will occur. The reality is that trust in online retailers is increasing based upon a perception that products offered online undergo the same regulations and requirements as the products offered by brick-and-mortar retailers. That fact may be true most of the time, yet it is also not true much of the time. E-tailers iHerb.com and Vitacost.com have a higher vetting bar than Amazon, but none have as high a bar of product inclusion as a brick and mortar retailer. When the inevitable Trust Transparency Collision occurs, the fallout will include all retailers, not just online retailers like Amazon 

What can be done to level this playing field? For one, Natural Products retailers must come together to capitalize on the difference between online and brick-and-mortar retailers and to talk about responsibility in retailing and this Code of EthicsSome practical steps include: 

  1. Reach out to WholeFoods Magazine and others to reinforce this message at every opportunity. 
  2. Ask your vendors to endorse, support, and mandate this message to all their customers. Let vendors know this Code of Ethics is the new minimum standard you are using to vet your product mix. While many vendors have both online and offline presence, their responsibility is not an either/or proposition. Failure to correct the disparity of brand quality and responsibility of regulatory requirements is a threat to the entire dietary supplement supply chain.
  3. Reach out to other retailers to share this initiative to raise awareness of the increasing disparity between accountability and responsibility from onlineonly brands.
  4. Reach out to state and national legislators to make them aware of our industry’s desire for responsible retailing and retailers. 
  5. Communicate this message to your customers and ask for their support in keeping our industry safe from irresponsibility.  

Trust Transparency Center, NOW Foods, and others have sounded the warning of the inferiority of many online-only brands. Some online-only products lack active ingredients entirely, and others lack proper labeling, including the proper identity of ingredients, and company contact information. Amazon’s response is to let the market govern itself and the customer decide which products are authentic and which ones are fake. The long-term impact of that philosophy will have little effect on Amazon’s overall market, but the impact on our industry could be widespread and catastrophic, so it’s critical to act now.  

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Scott Steinford has built a career of leading, learning and mentoring. Through immersion in many aspects of the supplement and pharmaceutical industry Scott has worked to redefine and improve business practices within the healthcare industry with an emphasis on transparency. His experience ranges from entry level to CEO and positions include organizations representing ingredient supplier, ingredient manufacturer, retail brand, private equity, M&A due diligence expert and trade organizations. Scott has a Pre-Law Bachelor’s Degree from the University of Texas at Arlington and a Master’s of Science Degree in Law from Champlain College. Scott currently is Executive Director for the CoQ10 Association and President of the Natural Algae Astaxanthin Association (NAXA) and Founder of Trust Transparency Center, a boutique consulting organization dedicated to assisting companies seeking to improve both their internal and external trust transparency. Scott’s prior experience includes CEO of Doctor’s Best and maintained a pivotal role with a variety of ingredient manufacturers including Eisai, Kaneka and was a founder of ZMC-USA.