Pelin Thorogood is the Executive Chair of Radicle Science, Proof-as-a-Service pioneer of supplements’ first easy path to clinical trials.
In case you haven’t noticed, Americans are having trust issues. And for good reason. Not only have we experienced a steady decline in trust in the federal government since the 1960s, which are now at historic lows, studies show that we also don’t trust the media (registration require), institutions and even each other. The reason? Some see the loss of trust as a sign of societal decline, increase in individualism or general loss of reliability and a “I am my brother’s keeper” mentality. Others point the finger at deep societal divisions and that the loss of trust in the government is having broader implications beyond the voting booth. The division seems to be linked to suspicion, cynicism and the ability to confidently identify “fake news.” Whatever the case may be, this societal loss of trust also translates over to how we make purchase decisions, especially when it comes to our food, our health and our wellness products.
Be it eco-labels or QR codes, third-party certifications are regularly featured on today’s food and consumer products. According to Allied Martket Research, “the global testing, inspection and certification market size of the global testing, inspection and certification was valued at $213.60 billion in 2020 and is projected to reach $349.27 billion by 2030, growing at a CAGR of 5.3% from 2021 to 2030.” What’s fueling the growth? In addition to efforts to improve customer retention, optimizing interoperability and standardization within breakthrough technologies, I believe consumer expectations are serving as a catalyst.
I believe in recent years, consumer awareness of food quality and safety issues has increased likely in part because of media coverage of food and consumer product recalls (“Poisoned” anyone?) and the pandemic contributing to increasing consumer concern for cleanliness and safety. The consumer market traction and uptake has resulted in the creation and extension of new food safety standards. This makes choosing new certifications for their portfolio of products an easier choice for brands since the return on investment (ROI) for those who adopt these standards is higher.
When it comes to voluntary third-party certification seals featuring attributes beyond simply compliance with government regulations, not only can they provide consumers important information on product attributes, but they also serve as an essential marketing tool. For those consumers seeking to understand the inner workings of compliance, publicly available voluntary standards behind these third-party certifications allow the skeptics to “pop the hood” and “kick the tires.”
Additionally, third-party certifications also foster innovation and product segmentation in terms of price and product positioning. Studies show the advent of third-party certificates in a market category can also play a key role in determining the prices and the range of quality offered. In other words, certifications contribute to the growth of premium-priced offerings and in the process of doing so, invite new lower quality or value-priced entrants to the market that may not necessarily meet the certification standards.
Dietary supplements used by 75% of Americans are no exception to this evolving market dynamic, likely one of the reasons why in December 2022 the Federal Trade Commission (FTC) issued an update to its Health Products Compliance Guidance for the first time in over a quarter of a century. The new guidance highlights expectations when it comes to explicit and implied claims on “dietary supplements or other health-related products, including foods, over-the-counter (OTC) drugs, homeopathic products, health equipment, diagnostic tests, and health-related apps.” The guidance also clearly details the gold-standard “competent and reliable scientific evidence” needed to support those claims with randomized, placebo-controlled trials (RCTs) conducted on large and representative populations.
What’s more, the new FTC mandate didn’t stop there. Mandates that lack enforcement often do a poor job of delivering on their intended objectives. Thus, in April 2023, the FTC issued warning letters to nearly 700 of the largest dietary supplement brands, “placing them on notice they ‘could incur significant civil penalties if they fail to adequately substantiate their product claims.” As a result, dietary supplement brands are now scrambling to secure substantiation dossiers; yet another third-party validation tool aimed at evaluating marketing claims in light of FTC and FDA regulations. In a nutshell, the regulatory compliance theme is very quickly shifting from “pinky swears” to “in data and science we trust.”
The plot thickens as, when it comes to certification seals, it isn’t as simple as just having one or even a dozen. Studies show that consumer trust is central in enabling certification marks to work as agents of change in the marketplace. Consumer trust in the third-party institutions providing the certifications, as well as consumer trust in the brand bearing the certification, is just as essential as having a seal in the first place. So what works when it comes to creating trust? Leading with transparency may be the answer. Sharing the details on pricing, ingredients, sourcing, manufacturing practices, analytical test results and clinical trial findings can breed good will and engender trust. Trust, in turn, can contribute to consumer loyalty which can breed increased sales and Customer Lifetime Value (CLV).
When it comes to consumer trust, complying with federal law is essential as it’s the very least that can be done, but consumers are expecting even more. I believe brands voluntarily aligning with the consumer expectation of safety, higher quality and efficacy will ultimately win with consumers and retailers. When it comes to creating and maintaining consumer trust in an era of consumer skepticism, a slightly different take on the kindergarten adage holds true. Radical transparency (in addition to honesty) is the only policy.
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