Why Marketing Natural Products is So Complicated. Part 1 of 3
Why Marketing Natural Products is so Complicated
Part 1 of a 3 Part Series
Over the last few decades, some companies ignored the basic principles of marketing and overall consumer protection by releasing products into commerce that were deceptive, dangerous or even deadly. I’ve lost count of the number of warning letters and product recalls in the last year alone.
As a consumer, when I spend money on a product, I don’t want to worry about my health; or accidentally buying something based on a misrepresentation or an outright lie.
As a marketer, I can attest that it not only difficult and time-consuming to follow the rules but can be mind-boggling to figure out what the rules even are. While it can be exhausting and overwhelming, I understand why many of these rules exist.
Some companies sell or say anything with little regard for the physical or psychological harm they may cause someone.
They are the ‘bad actors’ who cash in at the consumers’ expense by selling products with safety issues, labeling issues and outrageous marketing claims.
They may be a small group in a growing industry filled with beloved brands who are trying to make a real difference in people’s lives. However, the negative publicity and false claims from these bad actors have diminished the credibility and reputation of a solid industry filled with reputable companies working hard to do things the right way.
It’s unfortunate, but thanks to those ‘bad actors’ we all may be facing the biggest shift in the industry since the Dietary Supplement Health and Education Act (DESHA) was introduced in 1994. This could make marketing natural products much harder than it already is.
Americans are Using Natural Products to Combat the Healthcare Crisis
Let’s look back to see how we ended up here in the first place.
I think we can all agree that America is in a health care crisis and has been for quite some time.
With 12.2 percent of all adults now lacking health insurance, that leaves almost 40 million Americans with no access to basic healthcare.
This doesn’t include the number of people with high-deductible health insurance plans who delay or deny themselves much needed preventive services, or even treatment because they can’t afford the out-of-pocket expenses.
For folks who have healthcare, it’s estimated a family of four would have spent $28,000 last year in out-of-pocket costs.
This, along with an aging population and a heightened interest in preventative health care has contributed to the rise of the natural products industry.
With many Americans left on their own to find alternative methods to get or stay healthy, they have turned to dietary supplements, functional foods and CBD products.
Companies have taken notice and cashed in on the trend by developing products that provide healthier and more cost-effective options than what was ever available via traditional methods in previous decades.
Because of this, the natural products industry is stronger than ever, having passed the $200 billion mark in 2017. Of which over half (52%) is in the dietary supplement and functional food space.
With this comes also comes an increasing number of small natural products, functional food, dietary supplement and CBD startups looking to cash in on the trend.
What Does ‘Natural’ Stand For, Anyway?
Do you know what the term ‘natural’ means?
According to the Food and Drug Administration (FDA), the term ‘natural’ literally stands for nothing.
This creates one of the main marketing hurdles in the industry.
With no solid rule surrounding the term ‘natural’, there is nothing that can stop a brand from slapping a leafy looking design and the word ‘natural’ on their label, as long as they can claim it’s not ‘misleading’.
With an influx of cleverly designed labels and a ‘natural’ marketing claim, we can easily confuse brands committed to creating pure products without preservatives, pesticides, harsh chemicals or carcinogens with other not-so-natural products.
The FDA has requested comments on the use of the term “natural” on food labeling in 2016, yet nothing has moved forward since then.
This creates a need for marketers to develop strong differentiation strategies focusing on product benefits. With many natural foods and supplement products containing ingredients with documented medicinal uses dating back to ancient times, it’s only ‘natural’ for marketers to want to develop campaigns based on those benefits.
This is where the rules are long and plenty, with the gist of it stating we can’t say whatever we want to say. And, if we make a claim, we better make sure we have the appropriate, i.e. credible, scientific evidence to back it up.
This is the area which many CPG marketers are wondering, how do you sell a product if you can’t say anything about it?
It’s Not [Just] a Political Issue. It’s a Public Safety Issue.
The natural products industry exists to provide alternatives to over-processed, mass-produced and unhealthy options previously provided by Big Food and Big Pharma.
Part of the growth of the industry stems not only from consumers who want products that are healthier but also from consumers who want brands to be more transparent.
Today, consumers want to know more than what’s in your product. They want to know where the ingredients and materials were sourced, how the product was made, who made it, and what the standards surrounding the production process were.
Remember those ‘bad actors’ we talked about earlier? The brands’ responsible for selling products with safety issues. These are the companies who ‘knowingly’ release products into commerce with incorrect allergen statements, high toxicity levels, adulterated ingredients, and disease-focused marketing claims. We like to call these issues – the big four. These four issues happen more often than you would think. They cause the most harm to a consumer, and to a brand’s reputation if uncovered.
The challenge is, many of these ‘bad actors’ wholesale or private label products to unsuspecting and seemingly good brands who don’t realize that they may be contributing to the problem.
Transparency is not just a new buzz word in the supply chain industry. It’s the best way to help stomp out these issues.
Pushing politics aside, regulatory agencies are consumer protection agencies. They exist to make sure regular everyday people have access to safe products in which the benefits are explained in a non-misleading manner.
Regulations are created by these agencies when a public safety issue needs to be addressed. The rules are created so people don’t get hurt.
Sometimes these regulations are easy to understand. Other times, not so much.
Regardless, if we don’t try to follow the rules, we’re going to end up with more oversight and possibly more regulations.
Expect More Enforcement for Dietary Supplements, Functional Foods and CBDs
At the close of last year, the FDA commissioner, Scott Gottieb M.D., announced the formation of a dietary supplement working group to discuss increased oversight to the industry to combat falsely labeled products, adulterated products and disease claims.
Natural Products Insider quotes Gottieb stating the reasons behind the formation of the committee is because of “concerns that the industry has gotten bigger and riskier. The FDA plans on advancing new policies to improve oversight in the space.”
While this statement alone may scare people, it is comforting to know many of the leading natural products trade associations such as the United Natural Products Alliance (UNPA), the Natural Products Association (NPA) and the American Herbal Products Association (AHPA) stand on the line between the industry and regulators.
These associations are there to ensure the FDA is tough on the bad actors, yet thoughtful about the responsible companies as layers of new regulations and quality control pressures could create problems for smaller brands.
The reality is, no one knows for sure what will happen over the next year or two.
The question is – where will that leave natural product marketers?
Selling Supplements Requires Self Regulation
Consumers have a need, and a right, to trust the integrity of the ingredients, the manufacturing process and the marketing claims for the products they consume.
For companies operating in this space, it’s essentially up to us to monitor our own self-adherence to legal, ethical and safety standards. Supplements and functional foods, unlike drugs, don’t require pre-approval to enter the market. It’s only after someone gets hurt that the FDA can have the product recalled.
Over the last few years, many brands have been following self-regulatory initiatives to improve the overall landscape and reputation of the industry.
Many larger brands who can afford to make costly changes have already contributed to the transparency movement and made big changes in their supply chain and marketing initiatives.
It’s now up to the rest of the natural product and dietary supplement product producers and marketers to educate themselves on what we can do to contribute. We all can be better at what we do. With looming changes on the horizon, now would be a good time to try.
This doesn’t end here….
We’ve talked about general concerns in Part 1 of this three-part series: “Why Marketing Natural Products is so Complicated.” While we’ve covered quite a bit, there is still a lot more to talk about. Don’t miss next weeks article, “Natural Doesn’t Necessarily Mean Safe.”
Stay tuned for PART 2.