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The Global Botanical Supply Chain: How it Works & Do We Get What We Pay For - A Supplier’s Viewpoint
Presented by: Cal Bewicke, CEO, Ethical Naturals Inc.
The UNPA Raw Materials & Supply Chain SummitSalt Lake City, Utah | February 23-24, 2016
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To trace the steps that our botanical extract products take, from the field, through manufacturing, importation, and distribution as the finished ingredients that arrive in our own production facilities.
The Global Botanical Supply Chain
On this Journey, We’ll Look at:
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• How and where many problems occur• How these problems have built-up over time• How in many ways, we’ve built them ourselves
How We can Work Together to Resolve These Problems?
The Global Botanical Supply Chain
TITLE NAME HEREThe Global Botanical Supply Chain
• How do we responsibly control and maintain high standards through every step of this complex web?
• Who in our industry is responsible for this work? • Who should audit this chain? • Who should fully test these ingredients when
they arrive in the US?
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Price per/kg is the key number that determines sales levels.
The manufacturer with the lowest price sells the greatest tonnage of product.
The Global Botanical Supply Chain
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By and large, over the years, we’ve built a perception with these manufacturers in China and India, that as far as the US market goes, price is the key-determining factor, and other issues are secondary.
The Global Botanical Supply Chain
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Grades of Botanical Materials:Premium and Secondary
The Global Botanical Supply Chain
Premium Grade Extracts
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• Meet detailed analysis, by compendia methods, for potency and identity markers
• Come with solvent residue and pesticide testing documentation
• Be tested for known adulterants• Have full stability data• Documented supply chain
The Global Botanical Supply Chain
Secondary Grade Extracts
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• Will pass basic potency, ID and micro tests. • In depth testing will often reveal:• The use of non-stated solvents such as acetone
(instead of ethanol); • The addition of constituents from other species, or
other compounds to adjust potency levels, • No pesticide or solvent residue testing is done.• No true stability or chain of custody data
The Global Botanical Supply Chain
Milk Thistle Extract:
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• Costs more to make with 100% ethanol as a solvent, so almost all MTE is made using acetone in the preliminary extraction phases.
• This is rarely stated on the C of A, though residues will show up in testing.
• Even though many specifications demand it, it’s almost impossible to sell the 100% ethanol extracted MTE in the US, due to the higher cost.
The Global Botanical Supply Chain
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Bilberry Extract: • Cheaper blueberry species are added to reduce
cost while maintaining the measured active ingredient levels.
• Synthetic dyes are also used for the same purpose
Saw Palmetto Oil:• Small quantities of palm oil are added to reduce
cost
The Global Botanical Supply Chain
Importation & Distribution
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• At this critical step, how do we responsibly control and maintain the high standards we seek?
• Who in our industry is responsible for this work?
• Who should audit this chain? • Who should fully test these ingredients when
they arrive in the US?
The Global Botanical Supply Chain
The Contract Warehouse Distributor
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• Product is chosen primarily on price, trading with multiple manufacturers; there is no vendor audit system.
• Products are often imported under different descriptions or categories to avoid FDA import inspections (i.e. for pesticides). Paperwork is changed after importation.
• Shipped into a commercial, contract warehouse, generally without the controls required for food storage.
The Global Botanical Supply Chain
The Contract Warehouse Distributor Con’t
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• No sampling or testing is done.• Manufacturer’s CoA is copied onto company letterhead• There is no stability testing; dates and lot #’s may be
arbitrarily changed to conform to customers’ requirements.
• No recall procedures• The overheads are near zero, so these companies can
fulfill requirements for low pricing.
The Global Botanical Supply Chain
TITLE NAME HEREThe Global Botanical Supply Chain
“The competitive landscape is replete with grifters, cobblers, brokers and dealers who have no moral obligation to provide anything of quality The onus for the good product starts with the person you’re buying from, the supplier…..”George Pontiakos, CEO, Botanicals International
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What do you see as a supplier’s primary responsibility today when delivering ingredients to a supplement manufacturer?
The Global Botanical Supply Chain
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“To ensure the materials they offer are tested for quality and purity with the most up to date methodology available, and remain in strict compliance with current manufacturing standards and regulations. Finally documentation transparency that allows us (the customer) to confirm and be fully assured of the ingredients we are adding into our products.” Ana Soko, Supplier Quality Analyst, Metagenics The Global Botanical Supply Chain
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“The primary responsibility of the ingredients supplier is to meet or exceed the quality expectations of the manufacturer by following proper compliance processes cGMP, FSMA, and full transparency of the of the supply chain to the original source of the materials.
The quality of the finished product of any brand begins with proper compliance by the ingredient vendor.” Jim Emme, CEO, NOW Health Group The Global Botanical Supply Chain
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“The industry has undergone a rapid and necessary evolution in supply chain priorities.
The previous priorities for Price and Availability are now replaced with Quality, Traceability and Sustainability.” Paul Altaffer, CIO, RFI Ingredients The Global Botanical Supply Chain
Supplier Responsibilities for Importation & Distribution
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Prior to Importation• Full, on-site audit of manufacturing facility, including review
of history, noted strengths and weaknesses• Establishment of programs to improve quality and
transparency at the manufacturers level• Validation of manufacturer’s lab testing methods• Full US testing of at least three batches of each raw
material to be purchased
The Global Botanical Supply Chain
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After Importation:• Bring product into a GMP facility, open and sample
drums in GMP clean rooms, according to strict SOP’s• Test for potency, micros, heavy metals, solvent
residue, pesticides and known adulterants• Conduct ongoing stability verification • Maintenance of full documentation, recall
procedures, full adverse event reporting, insurance…etc.
• Achieve high level cGMP Certification
The Global Botanical Supply Chain
Supplier Responsibilities for Importation & Distribution
TITLE NAME HEREnature verified by science®
Cal BewickeCEO | Ethical Naturals, Inc. 415.459.4454 http://www.ethicalnaturals.com
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