How Supplement Prices are Determined
The buyers at Evergreen Nutrition are always on the lookout for the best deals and discounts to pass along to our customers. In fact, most of our inventory is discounted all the time, as opposed to “on sale” for the month. Discounts run from 5% and up with the deepest discounts in our SPORTS section where many of the products are 25% off the suggested retail price (SRP).
SUPPLY, DEMAND & the F.D.A.
Supply and demand is one factor that determines the cost of goods. As more people are choosing natural adjuncts or alternatives to pharmaceuticals, the demand for supplements and botanicals is on the rise. Tighter regulations make it more difficult for less scrupulous manufacturers to cut corners thereby decreasing the available supply of high quality raw materials. Even those companies that have been producing superior products all along can experience difficulty in acquiring raw materials that meet their high standards. It is not uncommon for our vendors to choose to keep items on long-term out-of-stock status rather than accept sub-par materials.
Changes in FDA regulations have also impacted pricing. For example, testing every individual ingredient (for which there is a validated testing method) on a multivitamin with dozens of components can have a huge impact on the price of the final product, especially for a small company with fewer products to share the cost.
LOCAL & GLOBAL WEATHER CONDITIONS
Farmers and wildcrafters have always been at the mercy of local climate conditions that can vary from boom to bust from year to year. The supply chain can be further disrupted by climate change or global weather extremes like those particularly evident in the last two years. Rising air temperatures may negatively affect photosynthesis activity and a plant’s ability to stay hydrated, as well as being detrimental to the birds, bees and other animals that pollinate 30% of crops and 90% of wild plants. (See Natural Resources Defense Council.)
Changes in the frequency and severity of droughts and floods have had devastating impacts on crops, wild plants and even ecosystems. In 2015, for example, poor harvests led to higher prices of BILBERRY and in 2016 of GINKGO (up 9%), garlic (up 12%), PSYLLIUM (up 15%) and SAW PALMETTO (up 50% – 55%), just to name a few. Although these factors impact the entire natural product industry influencing prices across the board, Vitamer (maker of EVERGREENs brand) absorbed a great deal of the cost increases of raw materials in 2016. They will continue to absorb some of these increases in 2017, passing on only about 2.5% overall.
In addition, rising water temperatures and ocean acidification may affect marine-sourced ingredients such as seaweeds, krill and small fish as our oceans ecologies are disrupted. NORDIC NATURALS, makers of sustainable fish oil products, has stated that they will absorb many of the cost increases associated with our raw materials and manufacturing processes, [but] must make a reasonable price increase to a select group of products.
Non-botanical ingredients are also affected. For example, raw materials to produce PANTOTHENIC ACID (Vitamin B5) increased 312% in 2016 after a major supplier discontinued production. PYRIDOXINE HCL (Vitamin B6) went up 32% in 2016 due to manufacturer changes. Raw materials for thiamine (Vitamin B1) went up 41% in 2016 and FOLIC ACID increased 37% in 2015 and continued to rise in 2016. After several manufacturers of MELATONIN closed their facilities, raw materials went up 73%. Raw materials for ZINC GLUCONATE increased 13% last year but now the cost must be passed on.
Please note that only a small portion of these increases will be reflected in the prices of our Evergreen brand. Vitamer/Evergreen absorbed the lions share of these increases last year, but in 2017 an average of 2.5% of these increases will be passed along. And although L-LYSINE costs increased 38%, our in-house brand prices will remain the same.
Not all price increases are due to the weather or increased material costs. In August a fire caused severe damage to National Enzyme Companys facility in Forsythe, Missouri. NEC is a contract manufacturer of vitamins, minerals, probiotics, enzymes and botanical supplements. For the Evergreen brand, this led to a 26% increase in PROBIOTICS, but the drop in production of such a wide range of supplements will surely be felt on a national level. Fortunately, all employees of NEC were safely evacuated in less than 40 seconds and the company will be fully operational soon.
As you can see, several factors determine the cost of the products we sell. But be assured that our buyers are working on your behalf to keep prices reasonable. For example, look for our peach-colored every day low price (EDLP) signs throughout the store. While most of our sales change monthly, EDLPs are sales that usually last all year long. For example, in 2017 we will have EDLP deals selected items from HEALTH FORCE, powders from ECLECTIC INSTITUTE, GENUINE HEALTH and JARROW.
And, believe it or not, occasionally prices actually go down. At the end of December the price on eight items from CARLSON went down (8% to 26%), including fish oils, Vitamin D and antioxidants.
MORE GOOD NEWS!
Eclectic Institute’s Osha is back! Eclectic (from Sandy, Oregon) had decided to discontinue products containing osha (Ligusticum porter) when that plant became critically endangered in the wild. They now have an ethical and sustainable source of this herb from private lands. That’s good news as winter’s cold and flu season comes upon us. Osha is a great respiratory support remedy and can help with sore throat, cough, colds, flu and bronchitis, among others.
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