Who Actually Makes Your Supplements?

Every category I have covered has had what you might call ‘a golden age’. A period when buyers could truly judge quality. In every case, I published a story about how the factors we could once judge were somehow removed or concealed from consumers.Supplements never had that golden age. No one has ever been able to judge the quality of a capsule by inspecting it. Even so, the category has grown even more challenging for consumers to navigate over time.Our regulations are where this story starts. Since 1994, no supplement maker has been required to demonstrate to the FDA that its claims about its products are true, or even that they contain what the label claims, before selling them. US laws place the burden of proof entirely on the government itself. The statute reads: “the United States shall bear the burden of proof on each element to show that a dietary supplement is adulterated”. To pull a product, the government must test it itself. That is not possible in today’s market.In 1994, when Congress wrote the rule, the supplement industry sold roughly 4,000 products and did about $4 billion that year. The FDA now says there may be as many as 100,000 supplement products on the market. Americans spend nearly $73 billion a year, and three in five adults take a supplement in any given month.The FDA is unable to provide firmer figures because it is hamstrung. Cara Welch, who heads the agency’s Office of Dietary Supplement Programs, explained its predicament plainly: “Under our current authorities, FDA has no systematic way of knowing what dietary supplements are on the market, when new products are introduced, or what they contain.”The agency responsible for policing this entire industry has no mechanism for even listing the products within it.This essay is about how that happened, and what you can do to ensure you are getting the supplements you paid for.Worse on Purpose investigates why the things you buy are getting worse. Subscribe to get the next essay in your inbox.A few factories and a deluge of brandsWalk into a CVS or Walgreens vitamin aisle and you will be confronted by a sea of gummies. Hundreds of jars covering dozens of independent health claims. Sleep gummies, energy gummies, stress gummies, focus gummies, and so on… Many of the brands you see today did not exist ten years ago. A large share of them are manufactured in the same buildings.Catalent tells prospective clients it serves "21 of the top 25 self-care companies." Its competitor, Vitaquest, boasts that it manufactures for "more than 500 brands around the world", launched "over 800 new products in the past year," and proudly lists where its products end up: Amazon, Costco, CVS, GNC, Sam's Club, Target, Vitamin Shoppe, Walmart, Walgreens and Whole Foods. Robinson Pharma runs a plant producing 20 billion softgels and 7 billion gummies a year. International Vitamin Corporation calls itself "the leading private label vitamin and supplement manufacturer in the US," and says it is "trusted by thousands of retailers and brands worldwide."Not one of them will tell you which specific brands they manufacture for.The prevalence of contract manufacturing practices only becomes visible to the public when something goes wrong. In January 2020 the FDA published a recall covering every dietary supplement one company had made between January 2013 and November 2019. Seven years of production, pulled in its entirety, at once.The company in question was ABH Nature’s Products out of Edgewood, New York. Inspectors found “significant violations of manufacturing practice”.It happens on smaller scales too. In November 2021 a single manufacturer in Norcross, Georgia recalled 77 products in one go, sold under more than seventy different brand names across seventeen states. Alpha, Chemix, Muscle Rage, Wycked Naturals and dozens more you have never heard of. The labels had failed to declare that the products contained milk.All of this raises the obvious question of how a market in goods so intimately tied to our health can allow so many new participants, with such little oversight.Enter, the gummyThe supplement game used to be difficult to get into. Making tablets and capsules at scale required something akin to pharmaceutical grade production processes. This created steep barriers to entry.Making gummies, on the other hand, requires a manufacturing process akin to making Twizzlers.Once the format transitioned, starting a supplement brand moved from being a manufacturing problem to a marketing one. You do not even need a formula to get started. The same Catalent About page offers brands "250+ Formulations available for Self-Care brands to get a head start."The cost of launching a supplement brand fell to a logo, an Amazon listing and one production run. Triton Nutra Group in Chandler, Arizona, states that its "minimum order quantity for private label is 1,000 units per SKU". Nutricraft quotes minimum order sizes for gummies at 1,000 bottles and says a first run starts at $8,000.That explains how a market goes from 4,000 products to over 100,000 without any new brand having to build anything. The plants still had to be built. Somebody else was buying them.Where the money wentWhat we are left with is a market that has grown some 20x over the past 30 years, while production concentrated into fewer hands. Following the money reveals some important facts for consumers.In 2017 a private equity firm called Highlander Partners started buying gummy plants. It bought four. Its president, Jeff L. Hull, described the plan: "In 2017, we started with a simple investment thesis of creating manufacturing capabilities around fortified/functional products in consumer-preferred formats." In August 2021 Highlander sold the assembled business to Catalent for $1 billion.Lonza's capsule division, which produces 260 billion capsules a year across ten sites, is going to the PE firm Lone Star Funds for about $3 billion. Lonza keeps 40%.IVC bought Perrigo's entire US vitamins and supplements business in 2016, then bought GNC's factory in 2019 for $176 million.And Vitaquest, the plant producing supplements for more than 500 brands, is wholly owned by CK Life Sciences, the Hong Kong company in Li Ka-shing's group.More than four billion dollars in disclosed prices, most of it inside five years, and every dollar of it paid for plants and production lines.So what was happening to the brand names over the same period?What happened to the brands?Church & Dwight paid $650 million in 2012 for Vitafusion and L'il Critters, then the biggest gummy vitamin brands in America. It called the purchase "a new growth platform in one of the fastest-growing segments of the attractive vitamin/mineral/supplement category."