Trust effects every relationship we have and influences even slight encounters. The importance of trust is rarely argued, but unfortunately, trust is not routinely a top of mind conscious part of decision-making processes. Trust is an interactive exercise involving at least two parties (i.e., producer/buyer) who each demonstrate degrees of risk and responsibility. Trust is only as valuable as it is visible which is why we need to achieve trust transparency in our organizations and consumer relations.
Trust transparency in the ingredient manufacturing and supply industry is paramount because of the nature of both action and expectation. Organizations that buy food ingredients are not selling widgets that people externally utilize and discard – these companies manufacture and sell a product that people ingest with the expectation of an improved quality of life. The risk/responsibility ratio is incredibly high to both the manufacturer and the consumer. As a result, more attention to the issues driving trust is imperative.
Ingredient buyers want to trust ingredient manufacturers or providers to relate with their needs, wants, concerns, fears, etc. They want to know how these concerns are being met and want education beyond what is found on the label or box. Buyers want to know the promises provided by the product or service meets or exceeds expectations and is valuable. Purchasing decision models reported by various survey organizations summarily cite three primary decision process drivers: Trust Transparency defines this process as RED:
• Relate – Buyers want their needs understood and the problem/risk solutions easily communicated
• Educate – Buyers want facts and education to support the solutions provided by the product or service
• Deliver – Buyers expect and evaluate the product performance as well as the experience of the purchase
How to relate
Trust begins with communication and connection. Learning what buyers want is a never-ending process that requires consistent communication. The communication process between a supplier, to be optimal to both sides, should be a two-way flow of both need and resolution. If a conversation centers solely on price, the sustainability of the relationship is highly questionable. The consistent and loyal buyer/supplier relationship must establish a content of communication that continues to supply opportunity and needs at many levels. In 1910, American Psychologist John Dewey proposed a purchase decision framework that fits today’s ingredient supply chain:
1. Problem/Need Recognition
A formulation is created or an ingredient is presented
2. Information Search
Ingredient is sourced from suppliers or presented to formulators, dosage determined, claims/benefits substantiated, etc.
3. Evaluation of Alternatives
Suppliers are compared or market channels are evaluated
4. Purchase Decision
Supplier or customer is determined
5. Post-Purchase Behavior
Customer/supplier interaction is evaluated for mutual benefit and continued relationship
While the process John Dewey outlined over a century ago has applicability, the reality is many suppliers and buyers fail to interject the necessity and awareness of each phase of the process. To positively recognize the importance and subsequently reinforce the process supports a stronger relationship between the supplier and buyer. It is important to note that both sides of the relationship can benefit from adopting this process. The more knowledge gleaned from the communication offered through the implementation of this process makes each side more valuable to the other.
How to educate
The establishment of trust to gain customers is well founded in almost all purchase decisions regardless of the product. The reinforcement of that trust through facts and education in the buyer/ ingredient supplier relationship lends itself to greater brand loyalty. A key aspect of the education continuum supporting dietary supplement supply chain is transparency. Ingredient manufacturers today have an unprecedented ability to interact and educate with buyers in a manner never offered. ingredientsonline.com is an excellent example of the advancement of ingredient manufacturer information using technology. The ingredient manufacturer can provide significant information to support the product: Transparency of supply chain.
In addition to the commitment to ingredient supplier manufacturer transparency, another key responsibility of the ingredient manufacturer is the responsibility of further education by contributing to the science supporting the ingredients produced. Strict commoditization of ingredients does not lend itself to a sustainable model to promote an ingredient. Surveys and analysis continues to point to the fact the consumer increasingly views not just the claims on the label but the ingredients as well. A 2015 Hartman Group survey of 1,728 adults age 18 to 69 indicated 81 percent of those surveyed who say they are watching their weight read the nutritional panel on product labels. Even when the consumer study asked participants if labels were important when they were not watching their weight, 72 percent said they read the nutrition panels. With the ability to research an ingredient or set of ingredients online, one only needs to visit a local health food store to see consumers routinely conducting on the spot research.
A 2017 consumerlab.com survey of over 9,500 respondents listed the most popular dietary supplements as Vitamin D, Fish Oil, CoQ10 and Probiotics. The consumerlab.com report also lists Melatonin and Curcumin as leading supplement categories. In a search of PubMed articles referencing human studies, it is clear the more popular supplements have the most cumulative references (pictured left).
These numbers indicate research contributes to the success of an ingredient. In all cases, 2016 research declined from 2015 and branded ingredient searches provided almost no references. The concern is the current decline in research can have long-term consequences to the ingredients and industry. It is likely the branded ingredients are directly or indirectly supporting the studies that exist, but they are not individually getting credit. Ingredient manufacturers should collectively support human studies to continue to provide increased awareness and education. Together, ingredient manufacturers can share the cost of these human clinical studies just as the impact of results are shared in the marketplace after positive outcomes.
How to deliver
Trust is ultimately valued and achieved through communication both before and after the ingredient sale. Actions including product quality, timely delivery and customer service largely affect the overall satisfaction of the ingredient sale. All aspects of the supply chain impact the ultimate success of the retail product. Any retailer will tell you a significant success factor for a retail product is the quality of the ingredients which make the product. An ingredient manufacturer in the dietary supplement space can maintain the highest degree of customer service, consumer education and product quality, but the impact of a competitor that provides inferior quality or adulterated product can impact the entire ingredient category.
A notable example of this issue can be found in the ingredient L-Tryptophan. Tryptophan supplements were banned completely by the FDA in 1990. Only one company, using one production process, was found to have the toxin “contaminant 97.” Self-policing in the dietary supplement industry is of more importance than most other industries. The dietary supplement industry is often characterized as being unregulated. While it is not unregulated, per se, the regulations that do exist are inadequately enforced. Fortunately, the overwhelming majority of the dietary supplement industry maintains a level of ethics and quality which maintains a high degree of overall consumer confidence.
Tragedies such as the L-Tryptophan crisis of 1989 can scar an entire industry. Even though only one manufacturer was proven to be culpable in that crisis, all the ingredient was removed from the United States by the FDA for 15 years. The Peanut Company of America crisis which resulted in several deaths from unethical production of peanut butter, while not in the dietary supplement industry, affected the dietary supplement industry by creating increased legislation in the form of the Food Safety Modernization Act of 2010. The Natural Algae Astaxanthin Association (NAXA) found adulterated retail products that could not have been discovered with typical and standard test processes. NAXA could explain to the manufacturers of the effected product the concerns and issues and the concerns were corrected.
The Ephedra Education Council was formed because of a crisis already mature, underfunded and too late to benefit from any self-police correction. The Global Organization for EPA and DHA Omega-3s (GOED) was formed to instill a level of quality, ethics and education to that category after concerns within the category emerged. Most participants in the industry agree the GOED purpose as initially outlined was achieved and the ingredient has fared better than it would have without the organization.
The ingredient manufacturer/buyer relationship is an increasingly important element of the supply chain equation. The distance between the two entities has continued to shrink and the impact of the relationship continues to grow. The B2B e-commerce platform provided by ingredientsonline.com serves to continue the evolution of transparency in the ingredient supply chain. This transparency, as well as other important factors as outlined here, builds the trust necessary to gain the confidence in the supply chain that will serve all involved for years to come.
Author bio: Scott Steinford is a Managing Partner at Trust Transparency Consulting based in Spring, Texas. From starting companies to facilitating their acquisition, Steinford has an extensive and awarded track record encompassing the pharmaceutical and nutrition industries. He has held CEO or President roles in for-profit organizations such as ZMC-USA and Doctor’s Best as well as Executive Director and President roles in not for profit organizations. Trust Transparency Consulting combines trust with transparency to improve culture, values, relationships and customer confidence, enabling organizations to reach maximum value – internally and externally.