Making dietary supplements is an increasingly attractive business. Earlier, the Russian market mainly offered imported food additives, but today, local companies are rapidly filling this niche. This process accelerated when many foreign manufacturers left the Russian market. Changing consumer attitudes also play a role, as people are increasingly incorporating health-boosting micronutrients into their diets, no longer thinking of any supplements as some “obscure chemicals.” What steps does it take to start a supplement business, if you decide to take advantage of the booming market and stay on top?
The most important thing a new supplement business should know is that manufacturing food additives does not start with setting up a facility or production line. This is only done after you create your product. The first step is to develop the concept:
- research consumer demand and global trends;
- develop the product – it starts off with the formula and selection of raw material suppliers;
- legal issues such as business and product registration.
Once this is done, the next step will be to:
- find suitable premises according to your criteria;
- purchase the necessary manufacturing equipment to make your product;
- set up your production line in accordance with regulations and requirements.
The production and distribution of dietary supplements is regulated by the Technical Regulations of the Customs Union (TR CU). A new business owner will have to repeatedly check with the requirements in the document. Now let’s focus on each step in more detail.
Potholes to avoid
How does one evaluate potential demand to make sure the business does not go down the tubes weeks after launch? You definitely need to thoroughly study the market you are planning to join. To get a complete picture, we at NL study international experience, research suppliers of raw materials and their latest projects to develop new components, forms and technologies for processing and producing dietary supplements; it might make sense to order research from third-party analytical agencies. If you already have a customer base, it is very important to get feedback from them. For example, NL has more than 5 million registered customers and distributors around the world, so feedback from our partners is the most important tool in our work.
Once we have an idea what the market and our customers need, we proceed to the development of our future products.
Raw materials differ
Your number one job is to find suitable suppliers of raw materials. Your ingredients are the basis of your product. Essentially, dietary supplements are a mix of pure raw materials, so you need to take this selection as seriously as possible.
The most important criterion for choosing your ingredients is the place of origin, because as a rule, being a native species ensures the highest biological activity. Let me give an example: artichoke is indigenous to the Mediterranean countries, and the local climate ensures a consistent high quality of the product cultivated there. Therefore, we buy artichoke extract only from European manufacturers. In case of sea buckthorns, the best place to order is Altai, where you can get organic buckthorn berries and leaves without any man-made impurities. We buy mint from Martin Bauer that consistently grows one and the same variety of this plant, always in the same place with specific climatic parameters. This makes it possible to obtain the best raw materials for production from batch to batch.
Furthermore, ingredients can be selected worldwide on the basis of quality, safety and origin confirmed by the necessary certificates. The documents should include the type of seed stock, the region where it was grown, and how it was collected and processed.
We have similar requirements for suppliers of vitamins and minerals: they must be proven partners, supplying products in forms that ensure safety, bioavailability and solubility, which can be used in all types of food products.
At the same time, the situation has changed today. Now we are working both with proven suppliers we still have access to, as well as with new partners. Dietary supplement manufacturers are now struggling with substituting suppliers, the rising cost of raw materials and rearranged logistics.
Where to get formulas?
So, you have struck a deal with raw material suppliers, now what? You need formulas. And there are three ways to obtain them: you can buy existing formulas, hire a food technologist or go further, which is partnering with a laboratory to develop unique products. NL is a chain so it is important to us that a product is unique and differs from alternative products on the FMCG market. This is why we opted for the third strategy: our strategic partner UltraNovation R&D laboratory develops the dietary supplement and functional food formulas for our company.
In development, it is crucial to understand clients’ needs and how they change. For example, during the pandemic, the specifics of COVID-19 and its treatment increased the popularity of prebiotics, probiotics and monominerals. Today the trend for immunity boosting is waning and customers prefer dietary supplements of more general applications: vitamins and minerals, Omega 3, collagen and anti-stress complexes.
Overall, the currently available raw materials, market trends, new scientific data and technology are the aspects to be considered in the development of dietary supplements. We research the opportunity of developing and launching new forms of components that provide maximum digestibility and efficacy while monitoring new production technologies for biologically active substances and dietary supplements that improve the bioavailability of active components thus boosting their effects. This is why the employees of our company and the R&D lab attend industry conferences and fairs and promptly study latest research publications.
A developed product must be officially registered. Although dietary supplements are not considered medical drugs, they are subject to similarly strict quality control as medications. According to Russian law and regulations of the Eurasian Economic Union (EAEU), dietary supplements are specialized food products that require mandatory state registration. In Russia, a certificate of registration must be obtained from the Federal Services for the Oversight of Consumer Rights Protection (other agencies are responsible for this duty elsewhere in the EAEU). First of all, it is important to confirm the quality and safety of a product in accredited laboratories. Then samples, research results, supporting documents for the product and raw materials are submitted for review. After the review, the same package of documents is submitted to the Federal Services for the Oversight of Consumer Rights Protection as part of the certificate application process. That is a lengthy multi-step procedure.
Once a state registration certificate has been received, the data goes into a unified registry where it is publicly available for anybody who wants to check if a product is officially registered. The company obtains the documents before the launch of serial production.
When selecting premises, the future business owner has two options: building one’s own production facility or leasing one. In 2014, we opted for the lease because it was more cost-effective.
Since dietary supplements are specialized food products, the production facility must comply with the standard requirements for any food production, according to TR CU. In addition to properly functioning water supply, sewage and ventilation, the main criteria include the routing principle for staff moving around the facility, raw materials, semi-finished and finished products that must not cross paths. This concerns both large and small facilities. Even if you decide to launch only one production line, you still need quite large premises, around 3,000 sq. m., with clearly separated sections for raw material storage, production, uniform changing, meals, etc.
What do you produce?
The choice of equipment directly depends on what dietary supplements you will produce, in what form (pills, sticks, jars) and quantity. Below is a typical list of facilities you will need for one production line of dietary supplements in boxed pills:
- Mixing facility (includes a weighing machine, shredder machine, vibrating screen, mixing containers and a blender),
- Capsule filling facility (capsule filler and tablet deduster),
- Blister packaging facility (blister packs),
- Facility for packing blisters into boxes (carton packaging machine, weighing controllers).
If you decided to produce supplements in jars, you will need a jar filling line and not blister packs and a carton packaging machine.
In addition, you can ensure a higher safety of your products by purchasing a nutraceutical x-ray inspection system, a metal detector and other specific equipment. To us, this is a mandatory thing because the NL production is certified in accordance with ISO 22000, and this is a necessary requirement. However, this is very expensive equipment, and one should avoid such expenses in the beginning: to comply with the basic safety requirements, a couple of sifting machines and metal detectors at the production line will be enough.
The next criterion for choosing equipment is its production capacity. It is best to go for a capacity that is some 20% higher than planned because any equipment consists of a standard set of parts, while all products are different at every facility. You will understand the real load and speed that is required to make your product only when you launch mass production.
One should also not forget about the TR CU requirements related to equipment: it must be made from materials suitable for nutrition manufacturing.
The machines’ constructive and performance specifications are also important. They should be specific for each product. Among the mandatory requirements is the washing/cleaning and disinfecting of the equipment. Also, the working surfaces of the equipment and tools that are in contact with the product must be made of non-absorbent materials.
As for the use, the equipment should be easy to maintain; all units must be easily accessible for cleaning and repair.
Turning to Asia
Of course, it is also necessary to take into account the current developments: everyone used to purchase European-made equipment, but now it is much more sensible to look at Chinese-made equipment. With China, there will be no issues with paying and delivery of the machines and their parts. The quality is the same, it is only important to purchase it from large plants that provide warranty and make deliveries through trusted suppliers.
At last, when all preparations are complete, you can launch the production. The NL production line in Novosibirsk has the following phases:
The first phase is calculating the dose. The operator receives raw materials and mixes them in strict accordance with the process chart. The accuracy of the dosage of each ingredient in each capsule is achieved by adding the component in a multiple-phase way with constant monitoring using high-precision equipment. Depending on the product, there can be 3-5 phases, or even 10. This allows for evenly distributing micro doses in each capsule.
Natural raw materials can contain large micro granules, therefore the mix goes through a vibrating screen to remove impurities. After that, all components are loaded in the blender by a special vacuum loader.
It is impossible to distribute vitamins, minerals and other nutrients uniformly by hand. The uniformity of the mix is achieved by rotating it in all directions in a special blender, making it 100% uniform.
Then the mix goes to the facility where it is filled into capsules, which then go to the packaging line. Dietary supplements can be packed in blister packs, sticks or jars.
The NL production facility has its own quality control laboratory. Before entering production, all raw materials are tested for physical, chemical and microbiological indicators, as well as for presence of heavy metals, pesticides, mycotoxins and antibiotics. Having a laboratory is not a prerequisite for manufacturing dietary supplements – yet, it serves as an additional guarantee of product safety: raw material suppliers can rely on the documents and, if necessary, can additionally inspect all incoming materials in an independent laboratory, although this is more expensive, with a longer time required for obtaining test results.
The second phase of checking finished product output takes place during production. Each semi-finished product undergoes a compliance test. Along with measuring safety indicators, organoleptic examination is also performed during all stages including checking color, taste, appearance and consistency. The quality control department obtains samples in every production cycle – be it raw material, stick or capsule – to compare it with reference samples. Only after receiving satisfactory results, the semi-finished product is forwarded for packing and packaging.
After packing the product, we conduct a final spot check and release it based on test results.
To confirm the safety of its products, a company can undergo additional certification at an operating production facility. In 2019, NL received ISO 22000 certification to verify compliance with the international food safety management system. The certification ensures product safety in accordance with international standards through all steps of production from the raw materials to the finished product. A confirmatory audit has to be passed annually. In this regard, we cooperate with SGS, the world’s leading independent testing, inspection, verification and certification company.
This year, we also passed an audit to receive Good Manufacturing Practice (GMP) certification. We also have Halal certification which confirms compliance of the company’s production process with requirements and norms of Islam. These are not mandatory manufacturing requirements but they provide certain marketing advantages.
Another opportunity for dietary supplement manufacturers is conducting clinical trials. They are not mandatory for bringing dietary supplements to the market either – yet, a product with proven health benefits is more appealing for customers.
Manufacturers take efforts to highlight features and benefits of their product. To confirm all characteristics stated on the food label – the so-called marketing label information – the product must go through voluntary certification. In Russia, there are only several centers to offer additional special research and tests conducted by independent experts.
Russia’s dietary supplement market today
The prospects of the dietary supplement industry can be assessed by companies’ revenues: NL International’s revenues in this segment has doubled over the past year alone, from RUR 3 bln in 2021 to RUR 2.5 bln during this year’s first two quarters. Tebiz Group data analytics agency reported a growth in Russia’s dietary supplement market to have occurred since 2017, and we, as a manufacturing and distributing company, expect its further development: the share of imported goods will be reduced in favor of domestic manufacturers, with numerous domestic players emerging in the Russian market, including small companies.
A greater interest in dietary supplements from young solvent consumers is encouraging domestic production as well. Russian people are getting increasingly aware that to feel healthy and look good at 50 you have to start taking care of your body at an early age. Based on our company’s internal consumer profile research, we noted that purchasers’ age has significantly decreased, with today’s core audience aged 30 and over.
By Olesya Bal, Executive Director, NL Continent (NL International trademark)