Here’s what industry leaders are saying about the major issues affecting the natural products industry today.
The panel:
Alina Hornfeldt, Co-owner, Mastel’s, St. Paul, MN, www.mastels.com
Debra Short, Executive Director, SENPA, New Port Richey, FL, https://senpa.org
Holly Prugar, Supplement Manager, The Mustard Seed, Watertown, NY, www.themustardseedonline.com
Jim Emme, Chief Executive Officer, NOW Health Group, Bloomingdale, IL, www.nowfoods.com
Ramona Billingslea, Marketing & Education Manager, Betsy’s Health Foods, Spring, TX, https://betsyhealth.com
Steve Mister, President & CEO, Council for Responsible Nutrition (CRN), Washington, D.C., www.crnusa.org
The natural products industry is facing a variety of opportunities and challenges in the face of an uncertain world. While consumer demand for natural health products remains high, emerging regulatory concerns have left natural products suppliers, retailers and even industry bodies anxious about the future of the VMS industry. From tariffs to the future of the GRAS (generally recognized as safe) process to the rise of products for GLP-1 users, the natural products industry is in flux. Vitamin Retailer has convened a panel of experts to discuss the emerging business concerns facing the industry at the state and national levels.
VR: What are your current business concerns?
Hornfeldt: Currently, our main concern is the unpredictability of the current administration in regard to tariffs, new regulations and any deregulations as well. Things feel volatile and unstable, so we are just going to keep doing what we do best—serving our customers and hope that things will level out and we’ll have some consistency in the future.
Short: We all know that innovation is the lifeblood of any industry, including the natural products industry, making it challenging with an aging community of leadership at the retail and supply level. In 2023, the SENPA Board of Directors saw the opportunity to engage a group of young leaders, namely, SENPA’s Emerging Leaders in Natural Council. Where is it better to gather new ideas, policies and practices than among the young leaders currently rising through the ranks at their respective organizations? With three active emerging leaders on the retail and supply side of SENPA board of directors their input is vital to round out future and vision of the organization.
Prugar: Our current concerns center around out-of-stocks and price increases. We are again seeing many out-of-stock items on our orders. This is concerning, because many of the out-of-stock items are very popular. Price increases from supplement companies are also a growing concern. The cost of everything from raw materials to packaging and shipping is increasing; in order to help with some of the increased costs, supplement companies are raising prices.
Emme: Our current business concerns are focused on solutions to the whipsaw effects from the different tariffs implemented by the White House. We are also concerned about the unintended consequences of the pending 232 decisions by the Commerce Department. We are advocating through the Natural Products Association to directly influence both of those issues.
Billingslea: We are having fewer issues with manufacturer out-of-stocks this year than we experienced last year, but keeping product on the shelf is still a top concern. Even though prices have gone down in some industries, several of our manufacturers who managed to not raise prices in the last two years or so have had to implement price increases recently. We’ve reduced some of our margins to mitigate some of the increase, but we remain concerned about having to raise prices when everyone is ready to have prices go down.
Mister: Our members are most concerned about the uncertainty around the tariff situation. The vast majority of raw materials that go into dietary supplements are sourced internationally, even though the products are formulated and made in the United States. The raw materials come from all over the world. The uncertainty around the tariff situation—not knowing whether there will be country-specific or sector-specific tariffs, or unique treatment of China or India—all of this is creating situations where the industry cannot move forward because we don’t know what the market will look like in 90 days. At the federal level, we have one area where we’re playing defense and one area where we’re playing offense. With defense, we’re wondering what will happen with the change in the administration and what will happen under Secretary Kennedy. We know he’s been very supportive of supplements in the past, but we don’t know how that will translate into oversight of the industry. We’re also seeing him trying to take away certain dyes and the self-GRAS process for approving new ingredients, which causes our members anxiety. We don’t know how quickly this will happen or whether the system will still have a GRAS pathway there. All of these regulatory concerns are bumping everything else in line, because companies cannot make decisions about product launches or new product development if they don’t know what the environment will look like six months from now. On the offensive side, we’re very much working to get dietary supplements included in flex spending accounts and health care savings accounts. We have this opportunity with the current Congress to get this provision included in the Big Beautiful Bill, because it’s essentially a tax provision that identifies dietary supplements in the tax code as being a qualified medical expense. There are some real opportunities if that happens, because it gives consumers more access to products and makes their dollars go farther.
VR: What sorts of products are trending right now?
Hornfeldt: Beef tallow topicals and butyrate supplements are hot items, and recent trends like sea moss are holding steady.
Short: GLP-1s are trending for weight loss, and the industry is working to complement the needs of consumers and their weight management priorities. The industry is also concentrating on gut health, including enzymes and probiotics/prebiotics, as well as healthy aging.
Prugar: Superfood items seem to be trending. Irish sea moss supplements are a big seller for us. Natural Renewals sea moss gel has been a big hit for our store; the company offers flavored sea moss options. Shilajit and moringa are also very popular. Plus, weight-loss and blood sugar support products are very popular right now; everyone is looking for natural ways to support healthy blood sugar levels. Berberine has been a very hot seller.
Emme: We’re continuing to see strong growth of all magnesium products, as well as steady sales from creatine items. Overall, fitness-oriented products are back in growth categories.
Billingslea: Our probiotics and multivitamins are always at the top of the list in popularity. Products like collagen and NAD for vitality are popular. Maintaining a healthy immune system and blood sugar management are also in-demand customer concerns; other trending products include D3+K2 products, mushroom products, berberine and cinnamon.
Mister: We’re still seeing a lot of interest in sports nutrition. Those products are capturing consumers’ attention, everything from electrolyte replacement products to the expanded indications around creatine. We’re seeing that creatine has benefits for post-menopausal women, for people who are trying to avoid sarcopenia, and even things like cognitive function. So that whole area is really trending. The products that can help consumers who are using GLP-1 drugs and looking to counter some nutrition concerns. I’m not talking about a dietary supplement that would present itself as an alternative to a GLP-1, but rather, one that might help you maintain muscle while you’re on a GLP-1. There are lots of products now that are positioning themselves as an addition to the GLP-1 regimen, and those products are doing quite well, too.
VR: What can you tell us about the impact of tariffs on the natural products industry?
Hornfeldt: We have only had one vendor inform us of a price increase due to tariffs at this point. Many of our brands knew that tariffs were on the way and have done their best to stock up and prepare. It is an ever-changing issue, so who knows where we will be by the time this ends up in print.
Short: With tariffs being the talk of the town, it’s not only affecting finished goods, but also ingredients and packaging. The challenge for some companies is to evaluate the SRP of products being segmented from different countries. As for dietary supplements, associations continue to monitor progress and how tariffs will render potentially higher costs for the industry and consumers.
Prugar: So far, we have seen the potential of a price increase because of the tariffs. I’ve seen articles indicating that the NPA is working to have certain popular items excluded from the tariffs.
Emme: Tariffs are the (single) biggest threat to our industry (today). Most natural product ingredients and basic nutrients are supplied to the world by China. The previously implemented 145 percent tariffs stopped us from buying products from China until temporary relief from these tariffs was granted by the White House. The relief is impermanent, and if the tariffs go back in effect, the inflationary impact on most supplement products will be big. This could cause consumers to no longer be able to afford these products. The economic impact could be devastating to the entire natural products industry.
We at NOW are not sitting idle regarding the tariff challenges. We have been in direct contact with key legislators on Capitol Hill and have had many discussions with senior White House staff to make sure they understand the negative impacts the tariffs could have on human nutrition. The Annex II relief was directly influenced by the efforts of NOW and the natural products industry, and we have been back to the White House to request relief for items that were left off the Annex II lists. Our work in support of addressing the tariff problems will continue until long-term solutions are found for the affected ingredients.
Billingslea: I can’t say for sure that recent price increases with some of our manufacturers have come about in response to anticipation of further price increases from suppliers, but I think this could certainly be a possibility. I believe that some of the raw materials for products we all love can only come from China at the present time, meaning our industry will certainly be impacted, either positively or negatively, depending on the outcome of tariff negotiations. Perhaps, new sources (hopefully even better sources) will be developed for raw materials as the tariff situation becomes clearer, and people take steps to fill the needs created by the tariff consequences.
Mister: I think right now the biggest impact is the uncertainty, because we don’t know whether we’ll go back to the tariffs that were proposed on April 2. We’re also concerned about a sector-specific tariff around pharmaceuticals that could unintentionally or intentionally pull in a lot of dietary ingredients. When the country-specific tariffs were announced on April 2, they had a list of things that would be exempted from tariffs. And a lot of vitamin and mineral ingredients were included in those exemptions. Everyone thought that was a great thing. But now, there’s talk of pharmaceutical tariffs that would apply to all pharmaceuticals across the board. The concern is that the same annex that was used to exempt ingredients could be the game plan for what gets tariffed under the pharma tariffs. And the concern is that the ingredients could get wrapped up in that and tariffed. If there are tariffs, we could see supply chain shortages, empty shelves for certain ingredients that become too expensive to import, increased prices for consumers, fewer options for consumers. But we could also see shifts in supply chains and even manufacturing chains. Prior to these tariffs, the typical business model was that you imported your ingredients, but the product was made here in the U.S. What tariffs do, is they create some uncertainty—is it less expensive to move the finished-product manufacturing offshore and just pay the tariff on the finished product? Because then you get the benefit of cheaper labor markets in other parts of the world, and companies are going to have to run those numbers for themselves and decide what makes the most sense.
VR: What sorts of trade associations and trade shows are you participating in?
Hornfeldt: We find a great deal of value from SENPA and INFRA, in both their trade shows, as well as the pathways for connection they have developed. We are enjoying being a part of the SENPA Emerging Leaders Council and are so excited about the new Circle networking and support that’s been developed! We just got back from the Palko show in Louisville [Kentucky] and had an excellent time learning during the educational seminars and exploring the tabletop show.
Billingslea: Honestly, since it became obvious that the supplement side of the health foods industry has become the stepchild of the trade shows, we have greatly reduced our attendance. The last show we attended was the last Expo East at Philadelphia [Pennsylvania], and the only reason we went was because one of our private label manufacturers was holding a meeting of their retailer advisory board, of which we are members. The supplement section at that show was located at the tail end of the convention center, barely took up five rows of booths and was mixed with raw goods suppliers. The benefits of trade shows just no longer outweigh the high cost of attending trade shows (airfare, expensive hotels, transportation on site, etc.) for us. But we are a small supplement store and do not carry foods, which puts us in a minority.
VR: What kind of state and national issues are affecting the industry right now?
Hornfeldt: We may see a recession, and with that, a drop in sales overall. We may see less of a drop in our industry, as I still feel that the average American is starting to see the value in investing in their health.
Short: The Farm Bill in 2018 has continued to cause confusion for the hemp industry. With a patchwork of states embracing the growth, it causes independent retailers to remain vigilant on products they stock on their shelves to ensure they are following state laws.
The industry has lost legislative champions to support the dietary supplement sector. SENPA monitors state and national issues through partnerships with national organizations to share updates with SENPA members.
Prugar: There is a big demand for natural products and supplements. People want to be healthy and eat well. We hope that we are able to get the products we need to fill the demand. We also hope that prices stabilize so that everyone can afford access to healthy foods and supplements. We’re fortunate to have great support from our community and vendors.
Emme: The biggest issues are the state weight-loss product bills being introduced into the legislatures of 17 states so far. The state of New York passed and implemented one such law; the New York law requires all dietary supplement products not be sold to anyone under 18 years of age. This law has had a negative impact on both brick-and-mortar and online retailers. It is our belief that this law is unreasonable and has caused many brick-and-mortar retailers to lock up products behind the counter, much like cigarettes. We are actively advocating to fight these laws at the state level when they are introduced in their legislative committees. That said, we feel very positive about the opportunities to help consumers under the current HHS (U.S. Department of Health and Human Services) administrative leadership.
Billingslea: Here in Texas, we have a couple of challenges. The Texas state legislature is considering a bill (Texas House Bill 1474) that would restrict access to weight-loss supplements, but the language is broad enough to potentially apply to many more supplements. The restrictions include carding customers to assure they are 18 years of age or older, and also keeping the products off the shelves so that customers have to ask for them, much like a pharmacy with prescribed medications.
The second issue involves the hemp industry. Texas’ SB3 and HB28 would essentially ban all hemp-derived THC products, effectively eliminating the hemp industry in Texas. If passed, this will cost people jobs and livelihoods, as well as driving consumers who depend on these products to suffer or possibly seek products from other states.
Mister: The age restrictions are the first thing that comes to mind, because we’ve been fighting those now for seven years. Those bills would limit weight loss and muscle-building products to people age 18 or older. One of those bills passed in New York last year. CRN is suing the state of New York about that bill, and we’re awaiting a decision now on appeal to see if we’ll be able to stop enforcement of that New York bill. We’re also seeing states that aren’t waiting for FDA in other regards—they’re planning to prohibit certain ingredients and dyes, or require labelling for certain products that exceed the federal requirements. What’s happening is we’re seeing states that are trying to fill what they perceive as a vacuum at FDA, which is why it’s so important that FDA continue to rigorously enforce regulations. When the states perceive that FDA (U.S. Food and Drug Administration) is not doing its job, they’re more than willing to jump in and fill the void.VR
