UNPA says new state chapter strategy will better communicate value of natural products industry

14-Nov-2013 - Last updated on 14-Nov-2013 at 15:05 GMT

Loren Israelsen

What will the legislative landscape look like for the dietary supplements and natural products industry look like after Senators Orrin Hatch, R-UT and Tom Harkin, D-IA retire? Trying to determine that in a positive way is one of the motivating principles for the new state chapter strategy of the United Natural Products Alliance, said the organization’s founder and executive director Loren Israelsen.

In an interview with NutraIngredients-USA, Israelsen laid out the key elements of the strategy. UNPA was founded by eight Utah companies and even though as it has grown it has added members from other states and countries, it is still thought of as a primarily Utah-centric group. The organization’s new structure will be based on a number of state chapters, each with its own chairperson (or brace thereof). The goal is to tightly link the state chapters and the local businesses they represent with each state’s congressional representation and through those relationships affect politics on the national level.

Several criteria were used to decide which states to start with, Israelsen said. Money talks, so the bigger the percentage of a state’s overall economy is made of up companies in the natural products and dietary supplements business, the higher that state moved in the initial planning phase of the new organizational structure. This meant that none of the top five states in terms of state domestic product (California, Illinois, New York, Pennsylvania and Texas) was considered for the first phase, even though there are sizable dietary supplement and natural products sectors in those states.

“We have identified eight tier-one states that are relatively small in size but have a strong local natural products industry,” Isrealsen said.

“We are going to create an organized voice of our industry communicated directly to its congressional delegations. (The legislators) will learn things they don’t know now, such has how important the natural products industry is in their state. They will meet the leadership of those companies. All politics are local and it’s all about the economy. So the local economy is our focus.

“We believe then in those states as those legislators become informed and engaged they will create the basis in Congress that will form the leadership for our industry for the next 20 years,” he said.

Changing industry

Israelsen said the new strategy came about from looking at how the industry has changed in the almost 20 years since the Dietary Supplements Health and Education Act (DSHEA) was signed into law by then-President Bill Clinton in 1994. It’s gone from a collection of visionaries to a big, thriving industry and the way in which the value of that industry in terms of jobs and economic growth is communicated needs to change too, he said.

“Let’s take it back 20 years, the supplement industry as it went into the 1992 political campaigns that became DSHEA, we were a relatively small industry but big on ideas. We had a very specific set of needs to try to ensure the continued survival of the industry,” Israelsen said.

“Everybody rallied around that. The populist soul of the industry was alive and well. And one of the great political campaigns of the last 75 years took place.

“Moving forward to 2013, DSHEA did provide a solid framework for the industry and we have grown historically somewhere between 7.5% to 8%. I think anyone would take those numbers,” he said. “We’ve gone from being a small industry to a pretty big industry. Today this is a robust, important industry and growing in excess of our historic averages,” he said.

Also unique for the dietary supplement was having Congressional champions—Hatch and Harkin—on the scene and actively engaged throughout the initial growth phase of the industry. To have two influential Senators, who in terms of policy agree on little else, come together so powerfully and effectively on this one issue is truly rare, Israelsen said. Replacing that particular scenario might not be possible, but planning for the day when it no longer holds true is a must, he said.

Broadening the scope

The organization will have chapters in Arizona, Colorado, Hawaii, North Carolina, New Hampshire, Utah, Vermont and Wisconsin. In choosing those states, Israelsen said UNPA decided to also broaden the scope of its mission, that is, to move not just beyond the borders of Utah but also to move beyond the boundaries of the dietary supplement industry.

“We are expanding the scope of who is invited. So that could include organic foods and agriculture, health professionals or educators,” he said.

“Or immediate service providers; so let’s say if there was a law firm or a marketing firm they would be invited to participate if they were deriving a lot of their business from the natural products industry. It could include head hunter executive search companies, it could be printing and labeling. All of the allied service companies that add value to what we do, we think they should be involved because they have a dog in this race,” Israelsen said.

New centers of gravity

The new strategy will allow UNPA to tap into developing centers of gravity in the natural products business, Israelsen said. Utah has long been a center of dietary supplement manufacture and marketing. But Boulder, in Colorado, has quietly become something of a Silicon Valley for the natural and organic foods business, he said. And Wisconsin has developed a thriving organic agriculture and dairy sector to go with a strong representation of companies selling supplements in the practitioner channel as well as one of the largest analytical labs in the natural products industry.

The new state chapter organizational structure is still being fine tuned, Israelsen said. But it will include a state chapter chair who is from a company or organization that is a top level member or partner of UNPA, as well including state chapter members participating at a lower membership level. UNPA’s organizational structure up to now has included a process whereby new candidate full members are vetted by a committee. New state-level members won’t go through the same process, but there will be a set of qualifying criteria for these members that include matters of business practice and ethics, Israelsen said.

Communicating value

As part of the strategy UNPA will collect data on the size and scope of the natural products industry in each of the target states. This data has not been put together in this way before, and Israelsen said he expects it will be an eye opener for some state officials. For example, a preliminary look by UNPA at the value of the natural products business in New Hampshire comes up with a figure in excess of $1 billion. For 2011, New Hampshire's official figures put the state's domestic product at $56.6 billion.

“As we publish our data on tier-one states, people will begin to see the individual character of the industry in those states. We will begin to publish the first reports early next year. I think it’s going to surprise a lot of people who really had no idea,” he said.

If successful, the new state strategy will make it clear to decision makers just how important a part of the US economy the natural products business has become, Israelsen said. And could serve as an effective counterpoint to unfair portrayals in the national media of a niche industry that takes a cavalier attitude toward safety.

“If we do an effective job being understood as an important part of a state’s economy you will begin to see political candidates start to seek us out,” he said. “This may end up being the most important initiative we’ve ever put together. And that includes DHSEA.”