Monitor: Prepare for long pandemic economyMonitor: Prepare for long pandemic economy
The COVID-19 pandemic has upended all manner of commerce as a "return to normal" looks increasingly elusive, but natural products companies must eye the moving targets no matter how fast they move.
April 20, 2020
Natural Products Industry Health Monitor, April 17, 2020
A global lockdown might make weeks feel like months and months weigh like centuries—Natural Products Expo West’s cancellation happened back in the 1890s, right?—but business allows little room for ennui. As distracting as the daily inundation of the negative can be, the time to look forward is always now. In this new weekly feature, Natural Products Insider, Food & Beverage Insider and Informa Markets sister properties provide that right-now-right-here update. Look for the Industry Health Monitor each Friday to learn the major news that is affecting the natural products market immediately and the less obvious insights that could dictate where the market may struggle or thrive in the months to come.
The world is changing quickly. It’s always smart to keep an eye on moving targets—even when it feels like a bull's-eye is painted on everybody and everything.
To the list of ways we are unprepared for the COVID-19 pandemic, add the American attention span. Protests against shelter-in-place orders are breaking out while White House staff tout a national back-to-business coming-out party for May 1. Such an optimistic outlook is not universally shared. A rising chorus of public health officials suggests life might not return to any semblance of “normal” until a vaccine is available. California’s governor has declared that concerts, sporting events and other mass gatherings and events are not “in the cards" for the foreseeable future. New York Mayor Bill de Blasio has called it “difficult to imagine” that live events will be held in the Big Apple this year. With some predicting social distancing measures could stay in place into 2022, industries of all kinds are reckoning with changes in consumer demand that could last well into the decade. Habits formed now may hold well after vaccines and other measures reduce the need for quarantine measures.
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What's selling. New Hope retail research suggests consumer hoarding behavior witnessed earlier in the pandemic has begun to wane, but pantry convenience has become a new target for the panic-buying phenomenon. “Here's a headline: We can't keep soup on the shelf. Soup in cans, we can't keep it on the shelf,” says UNFI CEO Steven Spinner. “We’ve been informed by our major ramen suppliers that there is no more ramen left in the supply chain. These shelf-stable, easy-to-make meal-prep items, overall—including categories that were real pariahs—they are shining stars right now and that really wasn't expected."
Adulteration appears. As supply chains get pinched for dietary supplement ingredients, adulteration is making an expected, but unwelcome appearance. In a new SupplySide video series, Indena’s Greg Ris said, “The adulterers are getting more clever. … It’s an ongoing problem [and] we need to have a stronger message and a next step to identify who the perpetrators are. A single letter isn’t going to do it for sure.”
Immunity hoarding. In another episode from the SupplySide series, NOW Foods CEO Jim Emme observed that immunity supplements are so popular, that the company has had to put a limit on orders. “Everybody is hoarding immune products—or at least the retailers [are]—almost like it was toilet paper. So we’re encountering that and have had to institute some rationing so that not one customer wipes out all the inventory. We want to take care of where our roots are with our small retailers and make sure they get what they need.”
You can't say that. Shadier elements in the supplement industry never let a good crisis go to waste. Infowars host and supplement brand owner Alex Jones was flagged by the FDA for saying in a video, “I’m just gonna tell ya … the patented Nano Silver we have, the Pentagon has come out and documented, and Homeland Security have said, this stuff kills the whole SARS corona family, at point blank range.”
It's a small world. The supplement makers are operating at full speed, even in the most hard-hit areas. Pharmactive is located in Madrid, in the heart of the outbreak. “We feel the unity of society and the compromises people are making,” says Pharmactive's head of marketing, Julia Diaz, in a series of first-person accounts being published by Natural Products Insider.
Trade show update. The list of trade shows postponed or canceled continues to grow. A result of the COVID-19 pandemic, SupplySide East 2020 has been canceled with the event to return to New Jersey in April 2021. “Our focus now is on supporting the many businesses and people who make up this great industry as we navigate today’s challenges together,” vice president and market leader, SupplySide, Jon Benninger said in announcing the news. Meanwhile, New Hope Network released this update about the $5 million fund to support the most vulnerable exhibiting brands impacted by the Natural Products Expo West 2020 cancellation.
Today’s Consumer: Shoppers retain natural values
The American economic outlook has rarely been more bleak. But at least in the early stages of a precipitous downturn, U.S. consumers are holding onto natural values. In separate responses, 56 percent of consumers surveyed said they are willing to pay more for high-quality ingredients, and that they value the people who grew the food and how it is made. How these sentiments hold as the situation evolves could be pivotal for the natural products industry. Get more from the latest consumer pulse survey in this New Hope Network article.
The old refrain that “laughter is the best medicine” probably isn’t subject to FDA and FTC regulations, but the supplement industry wasn’t marketing a health claim when it came together to create this video, which is now approaching 40,000 views.
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