Monday, March 5, 2012

Turning GMP Compliance Into Marketing Advantage

Business trends are often subtle, hard to measure, and obscured by layers of data.  Capitalizing on these trends can mean accurately reading the tea leaves and executing everything just right.  It’s risky.  Once in a while, a collection of environmental changes – changes to regulations, to demographics, to economic climate, to technology – converge to form a trend that is unambiguous and hard to ignore.  Responding to such a market trend isn’t risky, it’s necessary.
This is what’s happening in the Dietary Supplement industry today.
(1)   The dietary supplement market is growing.  Despite a global recession, sales of supplements grew steadily during the lean years of 2008 and 2009.  The increase is, ironically, partially attributed to the recession, as millions of consumers seek lower cost healthcare solutions.  By 2015, the number of people over the age of 50 in the US will have grown to 28%, which is expected to translate into still more supplement sales.  According to Global Industry Analysts Inc, supplement sales will reach over 93 billion dollars in the next few years.
(2)   Every dietary supplement company, has been required to comply with cGMP regulations (21 CFR 111) since June 2010.  But you know this.  And you also know that cGMP compliance can be challenging, time-consuming, and expensive.  It requires systemic changes in quality management, affecting everything from high-level company policy to every day operations.  It’s why a lot of companies have implemented the bare minimum, and hope it will take the FDA a long while to appear at their front door. 
(3)   59% of the US population uses online health information resources.  This was one of the results published in early 2011 by the Pew Internet and American Life Project.  This same study concluded that the 3rd most common online activity is researching health information.  Sites like WebMD, disaboom.com, MedicineNet.com, and Yahoo!Health provide internet users with an increasing number of venues in which to read and share health-related information.  Consumers routinely access the FDA website to learn about product recalls and other quality issues.  Other surveys and sources of internet statistics offer additional proof of what we, consumers ourselves, already know: more than ever, consumers are educating themselves about health, nutrition, and the choices that the marketplace offers them.
(4)   Consumers know about GMP certification and are spreading the word.  Type “Dietary Supplement Forums GMP” into a search engine and it soon becomes apparent that forum participants know about cGMP regulations, prefer products and companies that can prove compliance, and are advising their peers to do the same.  Forum discussions often go beyond simple recommendations.  Information seekers ask about how products are verified.  Forum posts discuss the significance of industry certifications issued by the Natural Product Association and United States Pharmacopeia.  Entrepreneurial forums explain the merits of doing business with GMP-certified contract manufacturers.
To summarize (1) through (4): you have to put the effort into becoming cGMP compliant whether you want to or not. The market for dietary supplements is increasing, and your potential consumers are looking online for health and nutrition information. Dietary supplement forums advise consumers to look for industry certifications and other internet sources link cGMP compliance to product quality. There’s a clear conclusion we can draw from these aligning trends:  cGMP compliance can be used as a powerful product differentiator and marketing message.

Though cGMP compliance is the law, many dietary supplement companies are struggling to catch up. They hope that an FDA inspection is years away and they can use that time to implement their compliance plans. These companies are missing an opportunity; they’re viewing cGMP compliance solely as a regulatory obligation, and ignoring the marketing possibilities it presents. Simultaneously, they have created a window of opportunity that other industry players can exploit to their benefit. Indeed, the first advantage to GMP certification that the Natural Products Association lists on its website is “gain marketing advantage by demonstrating the quality of products.”

Some companies caught this wave early. Enzymatic Therapy, Inc., a very large North American dietary supplement manufacturer and distributor, is one example. The Marketing Director at Enzymatic told online publication Nerac Insights that her company had eagerly awaited the cGMPs and believe they will weed out low-quality operations. She added that cGMPs offer a unique marketing advantage – that before, it had been difficult to prove superior quality since everyone claimed high quality based on their own standards. With this philosophy, it’s no wonder that Enzymatic touts GMP compliance and the industry certifications it earned at the top of its home page.

Companies that are cGMP compliant and have industry certifications to show it are at a distinct advantage. They can post certification credentials on their website and display seals on their product labels. They can use online newsletters and other internet forums to educate their customers, spread the word, and contribute to the growing perception that GMP-compliance is an essential element of quality.

If you want to take advantage of this marketing opportunity, please call us. We’d be happy to provide you with regulatory compliance consulting and assistance, information about industry certification, Standard Operating Procedures, or anything else you need on your road to cGMP compliance.

We at Polaris hope you find this information helpful.  Contact us at info@polarisconsultants.com with a question or post a comment.

by Laurie Meehan
This blog discusses trends and issues in the pharmaceutical and dietary supplement industries.  Click the SIGN UP link to subscribe to occasional notifications of new blog posts.

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