Natural Medicine

As an emerging commercial force, the nutraceutical manufacturing industry is a dynamic force with a unique set of challenges and opportunities. Below are a few little-known facts that set the industry apart from others.

Nutraceuticals Are Not Regulated in the Same Way as Traditional Medicines

The Food and Drug Administration (FDA) is the American government body responsible for monitoring drug sales in the US. Whereas pharmaceutical drugs go through an extensive process of clinical trials and peer-reviewed study prior to being approved for use, nutraceutical companies do not face the same hurdles from the FDA. However, they are still required to clearly label their products’ contents, weight, uses, place of manufacture, and instructions for safe use.

Most Retailers Are Not Manufacturers

Most companies prefer to use their own branded products to sell. This generates name recognition and legitimizes the company and its products in the eyes of the consumer. However, setting up the infrastructure to manufacture these products can be quite costly. Industrial machinery is prohibitively expensive, forcing many groups who wish to market their own branded products to find alternatives.

Because of this, private label manufacturing is a common strategy. In a common example, a nutraceutical startup wants to sell their own fish oil with their own label. However, they cannot source the fish oil themselves or sort it into capsule form. In this case, the company would partner with a pre-existing manufacturer to create the fish oil capsules, bottle them in the company’s label, and then distribute the product for retail sale.

The Nutraceutical Manufacturing Industry Is Booming

Many people in the Western world have begun to experiment with nutraceuticals as an alternative to prescription medication – many of which have unwanted side effects that can outweigh their benefits. Nutraceuticals are perceived by many to be more natural as opposed to the products of the pharmaceutical industry. For example, fish oil has been demonstrated to lower triglyceride levels in humans, making it an attractive alternative to expensive prescription drugs that have potentially devastating side effects.

For these reasons, manufacturers have seen huge increases in sales in recent years. In 2017, nutraceutical sales in the US alone exceeded $8 billion USD.

Sourcing Raw Materials Is a Challenge for Manufacturers

Finding the materials necessary to make their products is a big issue for manufacturers, especially because the industry is still young. In fact, entire conferences with global focus are dedicated to connecting buyers and sellers of these materials.

The rapidly expanding nutraceutical industry is unique in these respects. Moving forward, it will be interesting to see how the facts on the ground change as the industry matures.

If you are interested in learning about how health and business interact, check out some of these articles.

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