Transparency guidance for food supplement brands

Vitafoods Insights: 00:05

Welcome to the Vitafoods Insights Podcast. Join us as we explore the latest science innovation, helping the global health and nutrition industry connect, develop and progress. Today's host is Charlotte Bastiaanse, editor.

Charlotte: 00:22

Hi, and thanks for tuning into this Vitafoods Insights podcast. I'm delighted to be joined today by Len Monheit who is the CEO at the trust transparency centre. Thanks for joining me today, Len.

Len: 00:34

It's a great opportunity. Thanks for having me.

Charlotte: 00:36

So ahead of the presentation that Len is set to deliver as part of Vitafoods Europe this year, which is going to be taking place in hybrid format, we thought we'd bring Len onto the podcast to talk about some of the recent developments taking place driving greater transparency of ingredients and finished products across the food supplement supply chain, and give our listeners a bit of an idea of what will be covered in this really interesting session. But before we get into that, Len, I'd love for you to tell us a little bit more about trust transparency centre and what the purpose of this organisation is for those who might not be familiar.

Len: 01:08

Happy to do so. So, trust transparency centre was founded maybe 10, 12 years ago, by Scott Steinford. Everything we do has as our ethos and our primary principle, the principles of trust transparency. So it is definitely those two words that resonate. We focus on ingredients supply chain, within the food supplements and natural product space, providing strategy and insights to companies that are looking to leverage and excel in aspects of what they do. So we focus on several categories of ingredients within the supplements realm. But we also focus on supply chain. These are the areas that we provide insights globally, across the category.

Charlotte: 01:49

Thanks for that explanation, and transparency becoming such a hugely prominent topic and great emphasis on this requirement across the supply chain. But to start us off, I think a definition would be really good. I think there's still a lot of confusion, you know, across industry and a consumer level of exactly what transparency means or how it should be thought of or approached for superfood supplement brands. So in your view, what exactly do we mean by transparency? Or what are we ideally looking to achieve for supplement supply chain stakeholders and consumers when we talk about transparency?

Len: 02:24

So transparency is a individual company element. Every company is on its own transparency journey, that's also dependent on the role within the supply chain. So for ingredient companies could be different than brands or service companies. So what it is, is that driving towards the disclosure of more information that is minimally required to your stakeholders, be they your suppliers, your customers, your influencers, and whatever else are factors that are observing your company. Transparency is the shining a light on what would traditionally be more opaque aspects of your operations. That is how you source? how you manufacture? how you farm? But it's also the values and principles under which you exercise your contracts, your relationships, your associations and your affiliations. So it's all of those aspects married together. And again, every company is on its own journey with respect to transparency. So you cannot transpose one company's transparency statement position offering onto another because it's going to be very, very different. Do you have vertical integration? if you do, disclosing aspects of that vertical integration is going to be critical. If you do not have vertical integration, disclosing much more than you would be typically comfortable with, on how you contract, how you identify those sourcing partners becomes part of your transparency journey. So all of those are considerations.

Charlotte: 04:03

Thanks, Len. I think that's great to frame and appreciate you putting that definition together for us. Well, so let's talk about the consumer here, because we know many of the developments that take place, especially a b2b level are driven by what we perceive at consumer level and what the demand is there. We know that consumers are increasingly sceptical of dishonest products on the market, or they want to be really, really clear on what it is in the products that they put in their bodies. And I really like that you highlighted the manufacturing process because I think consumers are actually increasingly interested in how brands operate and they want to support brands that are trading ethically or manufacturing correctly. We know that there's a push for brands to deliver full transparency of their products, but what is your view of consumer understanding of transparency? You know, why does this need to be a priority amongst supply chain stakeholders? and what is the expectation here? are consumers wanting to be able to scan the barcode of a product and be able to trace ingredients all the way back to the source? Or do they want to discover this through brand stories? You know, what is your view there?

Len: 05:09

It's yes and yes. So both of the examples you've given Charlie are absolutely appropriate. So we've recently conducted our ingredient transparency centre, one of the brands, we operate within trust transparency. And I'll be sharing a lot more of this data in the actual presentation at vitafoods. But consumers will buy and are willing to pay to buy from transparent organisation. So what do they look for? Well, yes, they look for a QR code that they can get information about the brand story, also about the ingredients, also about the suppliers, also about the process ease. So that's part of it. The quality sealed, so certifications and seals associated with values, that part of the transparency value system that consumers operate within; the presence of branded ingredients, and the substantiation of those brand new ingredients. That's part of the transparency journey that brands can expose, and part of their brand story. But that's also part of what consumers are looking for. What goes into the decisions to source? Okay, how are you treating your farmers? that's also part of the transparency consideration that consumers are looking for. This can be exposed by pictures, visuals, resources, links, etc. In the website, all of those things. Who's involved? So what is your supply chain look like? either as an ingredient supplier, or as a brand? Who are your partners? Who are the supply chain partners? And how do you make those decisions? Who do you include, and who you do not include? consumers are interested in how you make those decisions. It's interesting that a negative term is a proprietary blend with no information provided underneath that, that's not very transparent. And that actually harms you in the marketplace. It harms you from a regulatory perspective as well. But it's actually consumers that are driving this transparency, value proposition. So having a proprietary blend, that's not the disclosure that consumers are looking for. It's not a transparent process. So there's a whole set of information package that consumers are looking for when they consider transparency at brand level or at ingredient level.

Charlotte: 07:25

Thanks, Len. Yeah, I think, you know, to sort of resonate everything you've said, we're dealing with really educated consumers here at the end of the day, who are fully willing to invest in this information and things that you mentioned, like quality seals, and labels, you know, they're starting to really recognise these and understand what they stand for, you know, known ingredients that have got a lot of science supporting them. They're keen on seeing those on the labels. And I also think really important piece here is supporting farmer welfare, especially, you know, smallholder farmers that can really be relayed through strong brand storytelling. And, of course, you know, the transparency of how all these different pieces come together is really important to the consumer. Well, then you're at the forefront of transparency in the industry, what are some of the most recent developments taking place, you think, reflect real strong progress over the last couple of years? and especially, you know, developments that are very specific and relevant to the dietary supplement industry?

Len: 08:20

So if you take a look for a second at the US environment, we're looking at a mandatory label registry that's been proposed by the FDA, which underneath that will demand some transparency. On the tech side, you've had blockchain technology that's, um, that's been around for a couple years, you're actually seeing companies embrace that, and combine that with QR code to display sort of the sourcing partners, farmers, the values of the farmers, the small holders that you talked about, Charlie, so you're seeing those types of developments. In this time period, with supply chain logistical challenges over the course the last two years, you've actually seen some challenges to transparency that I described earlier, because with vulnerability and supply chain with COVID, and production shortfalls, and farmer communities, not even being able to get into their factories in places like Asia. And remember, Asia is where a lot of our raw materials come from, using companies try to do supply chain redundancy. And this actually hinders the transparency of branded ingredients because branded ingredients, you want to include that science, you want to include that proprietary source, etc. But the supply chain redundancy exercise actually goes against that. On the counter side, you've actually seen relationships that have been developing for 10, 15, 20 years, based on branded ingredients. Those companies have been rewarded for their loyalty to the branded ingredient suppliers. So that's what's happened. We've also seen repatriation of supply chain, long protracted supply chains, going to Asia. There's vulnerability there, shipping costs have really increased. So you've seen some repatriation to streamline supply chains. This change needs to be documented, it needs to be interpreted and presented as part of the brand story. So you've got some things that are in flux due to everything that's happened over the course the last 18 months. So this all needs to be weighed against the value proposition of being transparent. So companies are wrestling with this, you see, some companies are doing it well, the ones with long standing relationships with branded ingredient suppliers are doing this exceptionally well. And they're being rewarded because if there's an allocation of supply, it's these trusted long term customers that are getting the supply. So a lot of things are in flux, especially over the course of last 18 months.

Charlotte: 10:43

Really, really fascinating considerations then, and I like what you've highlighted here around supply chain redundancy and supply chain repatriation developments over the last 18 months, and how brands have adapted to really seek these rewards. I'm sure you're going to unpack a lot more of that in your presentation. I really look forward to that. You mentioned the rise of blockchain and QR code scanning playing an increasing role in supporting the reality of transparency. And it's really interesting to see, even those technologies have kind of come across because I remember discussing it with a few experts three years ago, and it was really still quite foreign and, and not really a reality just yet within the industry. So great to see how that's been accelerated. Are there any other examples of, you know, technologies of interest, more potential that they could offer to the industry and bringing transparency to life?

Len: 11:34

I would go back because blockchain has evolved and it's become a little bit more practical and implementable. QR technology has been around for so long. But the last two years has actually made it mainstream. And I think we're just at the early stage of what companies can do with QR technology. So I think that there's a lot to be seen in the near future. And I'll be presenting a little bit of some of the things I've observed. And also some of the data that we have. I think that the use of video has also become mainstreaming. So companies having an eye on their manufacturing operations and processes, and using video to tell their stories has been something we've seen, that really escalated over the course the last couple of years. So be blockchain, QR, video technology, they'll be the three things I would highlight from a technology standpoint.

Charlotte: 12:21

Great, Len, thanks so much for highlighting those. And I know that you're probably aiming to unpack a lot more of this in your session. This has been a really short and snappy podcast, but one that's been packed full of information about, you know, where we're developing as an industry and what's to come in the future, which is really exciting. And I think we're working towards the right kind of future with supply chain stakeholders and consumers. And Len, your session is all happening on Friday, the first of October as part of Vitafoods Europe. The sessions programme for 1pm. Len will be leading it and unpacking a little bit more of some of the concepts and the terms we've spoken about today, as well as further data and insights into certain regions. To everybody listening, if you're interested in registering for the session and others, I'd encourage you to go to vitafoods.eu.com, where you can register as a visitor, explore the full programme and tune into Len's session. Len, it's been a pleasure to have you on the podcasts. Thank you so much for joining me.

Len: 13:22

It's been great and looking forward to the actual presentation. And I do have some data. We've recently done our ingredient transparency centre data covering the US, the UK and Germany for supplement consumers, and we really did do a deep dive in trust and transparency, and even sustainability. So I will have some hard data, what consumers are looking for and how they feel about it within the supplements environment. So looking forward to sharing that in the course of the presentation.

Charlotte: 13:50

Great Len. Well, so looking forward to it.

Len: 13:52

Thanks