Jim Emme, CEO of NOW, spoke via phone with NutraIngredients-USA on April 13 to discuss the company’s “unprecedented” March sales, the challenges with the supply of key ingredients, how the coronavirus crisis is impacting NPD pipeline, and his concerns around the economic environment and the potential for ingredient adulteration.
“Who would have thought that with all the talk over recent months of CBD and whether it’s legal, or whether it’s legitimate, who would have thought that vitamin C would have been one of the main topics, and vitamin D, and zinc?” said Emme.
“Just basic fundamental products in our industry. Those have been in short supply. We’ve talked to a large and smaller brick and mortar retailers, as well as online retailers, and all of them are in short supply of zinc right now, and would love to get extra supply of vitamin C.”
Emme explained that every year NOW boosts its ingredient stocks in the early part of the year because of the disruption of Chinese News Year. “We actually had superior supply we felt, and in the beginning it put us in a great position. Now we’re hand to mouth not just with the supply of ingredients but also our manufacturing capabilities,” he said.
“March was an incredible month for us sales-wise. Unprecedented in the history of the company, and our retail division was unprecedented as well [NOW operates Fruitful Yield in the Chicago area].”
NPD
New product development remains a strategic priority for NOW, said Emme, “because you need new products to keep growth going and we’re big enough that many of the ingredient vendors with new ingredients or with clinicals with a structure-function claim capability are reaching out to us early on.
“We continue our new product element really because of categories: We’re seeing explosive supplement growth, but we’ve also got food and we’re seeing explosive growth in the food category, like with our baking goods and flours.”
The outlook
Looking ahead, Emme said NOW is extremely worried about the economic environment and the discretionary income of consumers. “That said, our industry is often shown to be recession proof… People are concerned about medical costs and they start to take control of their health. We believe that’s happening right now.”
Emme added: “We believe that brands that are affordable and that do have high quality standards are going to become go-to products for consumers because they are going to really watch what they spend.”
“I really think this is an opportunity for our industry to shine. It’s our opportunity to step up and be the best we can be. Unfortunately, one of the bigger things I’m concerned about is economic adulteration of ingredients… We’re leaning heavily on the vendors we trust and we know.
“… we can show consumers that they can trust us. I think the agencies will be breathing a sigh of relief especially since the FDA stopped all routine inspections of incoming ingredients into the consumers.
“And all the exposure to more and more consumers that we’re all seeing, how do we retain those consumers? How do we maintain that trust? We’ve been handed a real opportunity with this as an industry.”
