Oct 1, 2009 12:00 PM

Even though RMIS sales are growing, suppliers feel the pressures created by regulations and the recession

The world is changing for companies that manufacture and supply raw materials and ingredients for the U.S. nutrition industry. Hoping to prevent safety catastrophes such as the ones that brought down many Chinese milk producers last year and the Peanut Corporation of America this year, finished product companies are scrutinizing their ingredient suppliers more than ever on quality, traceability and, in the case of dietary supplements and functional ingredients, proven efficacy. As a result, those ingredient suppliers who want to keep their customers and avoid triggering a public safety crisis must increasingly invest in costly quality-control measures, including analytical testing and third-party certification. “It is critical to provide assurance to the industry and ultimately the consumer that the raw ingredients we provide meet quality standards,” said Scott Steinford, president of ZMC-USA LLC, a subsidiary of and distributor for the Chinese ingredient manufacturer ZMC.

At the same time, raw material manufacturers and ingredient suppliers are seeing their input costs rise while facing price pressures and, in many cases, reduced or delayed purchase orders from their finished product customers, who must do everything possible to wait out the continued economic downturn. The consequence is a squeeze on margins that many suppliers say represents one of the greatest current challenges to their businesses.

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