Uncertainty has always been the name of the game when it comes to sourcing botanical ingredients, said Michael McGuffin, president of the American Herbal Products Association. McGuffin said he’s not entirely sure that there is a new issue in the wildcrafting sphere with a looming dearth of pickers because of changing demographics or economic factors (though he did say that he bows to the expertise of those who deal with the issue on a day-to-day basis).
“I’ve been in the business 40 years and all that time I’ve heard the young people are leaving. Now it’s the people who were young 40 years ago who are saying that. Does the condition of the wider economy affect the willingness to go into the woods to harvest plants? It absolutely does, and it always has. But it can work the other way, too; I heard that in regions in Appalachia were there has been a downturn in coal mining there has been an uptick in wildcrafted supply,” McGuffin told NutraIngredients-USA.
Planning is the answer
Many factors can affect wildcrafting supply, manpower being only one of them, McGuffin said. Drought, fires or an unusually cold or wet spring in a given region will put a dent in output, he said. Even the state of animal populations can have an effect.
“You can have a too-heavy deer browse in areas where deer populations are out of control,” McGuffin said. “A lot of these plants, like ginseng, are among those that deer feed on.”
In any case, planning your raw material needs in advance is not only good business practice, but an absolute necessity when it comes to wildcrafted materials, McGuffin said. Supplies of agricultural materials are somewhat inelastic in their nature (you can’t harvest more than you plant, in other words), and wildcrafted commodities are an extreme example of this, in which you don’t really know how much is out there in the first place.
“If you just need 35 or 40 pounds of something, you can get that pretty easily at short notice,” McGuffin said. “If you need 3,500 or 4,000 pounds, you need to be talking to Ed (Edward Fletcher, chief operations officer of Strategic Sourcing) months or a year in advance.”
Fletcher said this shift in the market seems to be happening, either as a result of GMP requirements or greater business sophistication as more outside investment money has come into the dietary supplement sector.
“In the last few years I am noticing that shift,” Fletcher said. “My customers are giving me more forward projections than they have in the past. Ten years ago it used to be more of a spot market. There are not many companies now that are stocking material on spot orders. They want to make sure they are not left in a bad position. I have seen customers in the past who have had to drop an ingredient out of a formulation because they didn’t plan ahead far enough and they couldn’t get it.”
Fletcher said that for the most part, standard sourcing rules apply as far as the price of ingredients goes. The bigger the order, and the farther in advance it comes in, the better price he’s able to offer his customers.
Scaling up means ponying up
But it isn’t always the case. Chuck Wanzer, who supplies wildcrafted materials through his company Botanics Trading LLC, said that pickers are independent businessmen, and will naturally shift their activity to those commodities bringing in the highest price, assuming the plants are within their geographic reach and are similar in harvesting difficulty. If a customer wants to launch a new product featuring a botanical that was lightly harvested in the past, in order to get the workers to shift their labor over to the new commodity, the customer might have to pay for the privilege.
“The wildcrafters are not my employees. Sometimes the more you want to buy, the more it costs. My customers are not used to that,” Wanzer said.
Wanzer said he also has an interest in trying to get a higher price for his materials, not only for his own profit but to be able to pay wildcrafters enough to keep them in the game. He has seen a shift in the business; in his early years there was significant walk up business at the company he started with in North Carolina, with families lined up at the door on Saturday mornings to sell whatever was in season. There is almost none of that now, he said.
“I’ve always tried to raise the price. These people are not getting rich doing what they are doing. They are using their own vehicle. They’re working a regular job and doing this on the side. They are energetic people trying to get ahead and they are my lifeblood,” Wanzer said.