Own brand in the dietary supplements market

The Ukrainian and global dietary supplement markets are growing every year, and this trend will continue. The annual growth rate is forecasted to be over 9%, and by 2030, the global dietary supplements market will reach USD 327.42 billion^[1].

The reasons for the increased consumption of dietary supplements include a focus on personal health, changes in dietary habits, an increase in chronic diseases, and an aging population. In turn, manufacturers are developing more targeted products aimed at specific consumer needs. The market is also stimulated by products with plant-based and natural ingredients, the growth of e-commerce, and direct sales channels.

A significant advantage of the dietary supplements market is that these products are offered in forms associated with health benefits or treatment, yet the regulatory requirements are significantly lower compared to pharmaceuticals and medical devices sold on adjacent shelves in pharmacies or online stores. Moreover, selling dietary supplements does not require a license, allowing their sale through any retail outlet.

Due to the variety of forms and the high level of innovation, more brand owners are outsourcing production to third parties, allowing marketing and production to be separated and each to focus on its specialization.

A brand owner focusing on marketing must be aware of their responsibilities and legal restrictions, particularly regarding health benefit claims. This article helps to understand how an own brand (OB) works in the dietary supplements market from the perspective of legal requirements, labeling features, and regulatory requirements during development and marketing.

Own brand and contract manufacturing
There are two main models for producing dietary supplements under an own brand – own brand and contract manufacturing. The primary differences lie in the ability to customize the product.

OB products are pre-developed and packaged by the manufacturing company, meaning the brand owner does not have the option to customize the product to their brand (e.g., changing the formula, form, packaging). Typically, the only thing the brand owner can do is create a label with their logo. However, the minimum order requirements are lower, and the delivery time is faster.

Contract manufacturing occurs when custom orders are produced according to the brand’s specifications. This model allows for individual customization and the creation of a unique product, but the minimum order requirements are higher, and the time is longer.

In both cases, the actual production of the supplement is carried out not by the brand owner but at the facilities of another company. If desired, this information can remain unknown to the consumer, as legislation requires only the information about the “food business operator responsible for the food information” to be indicated on the labeling (package). This operator is the brand owner. Information about the production facilities can be provided voluntarily.

Main legal requirements for dietary supplements
Although dietary supplements are a specific category of food products, unlike other specific categories such as baby food, medical nutrition, or weight control foods, their market entry process is simpler – it does not require any registration or notification to the competent authority.

However, when introducing a dietary supplement to the market, the brand owner becomes a food business operator responsible for the product’s safety and a whole range of duties. The brand owner must register as a food business operator (state registration of facilities) and ensure that the dietary supplement complies with legislative requirements in terms of composition, labeling, and production.

The amount of work that needs to be done directly by the brand owner will depend on the chosen production model. When using the own brand model, it will be significantly less, as some tasks will be done by the manufacturer. In contract manufacturing, the brand owner is involved from the recipe development stage.

Composition of dietary supplements
Recipe development is one of the most responsible stages in creating a dietary supplement. There is a wide variety of ingredients with nutritional or physiological effects on the market. While many are safe, effective, and beneficial, some can have negative side effects, lack sufficient research, or be ineffective.

The use of vitamins and minerals, as well as some banned substances and novel ingredients, is fully regulated by law. The use of other substances with nutritional or physiological effects, including plant ingredients, is not regulated. The brand owner, as a food business operator, is responsible for the product’s safe composition.

When creating a recipe, it is crucial to ensure the correct combination of ingredients. Individual ingredients in the recipe should work together or be synergistic. Combinations that, at best, neutralize each other or, at worst, can be harmful should be excluded. Additionally, many ingredients are only scientifically proven effective in specific doses, strains, forms, or under certain conditions. An incorrect recipe can result in products that, at best, do not work and, at worst, are dangerous.

It is also essential to ensure that all ingredients come from verified suppliers, are produced and transported properly, and all participants in these stages have implemented the HACCP system.

Using a pre-developed recipe for an OB dietary supplement can alleviate these concerns, as it means that research and evaluation of each ingredient have already been conducted, forms and quantities selected, ingredient combinations are synergistic and beneficial, suppliers are selected and controlled by the manufacturer, and the product has undergone necessary safety and effectiveness testing. These products have also been tested for stability and shelf life, and appropriate and safe packaging has been selected for them.

Labeling of dietary supplements
Information about the dietary supplement on labeling and accompanying documents (instructions or leaflets) is crucial for both marketing and product circulation. Inappropriate labels can lead to serious consequences, such as fines and product recalls from the market.

Dietary supplements, as a special category of food products, are subject to an additional set of rules and regulations on top of the general labeling rules applicable to all food products. More than a dozen different legal acts set a wide range of requirements for information about dietary supplements provided to consumers: drawings and images, use of the correct font size, placement of information on packaging, and mandatory warnings. These requirements apply not only to retail packaging but also to other means of providing information, such as leaflets (instructions for use), brochures, websites, product presentations, advertising, etc.
Dietary supplements are food products designed to supplement the regular diet and provide additional nutrients or substances with physiological effects. Therefore, their marketing often includes claims about the product’s potential benefits, expected effects from its consumption, or specific product characteristics. These claims aim to inform consumers about the potential benefits of using the dietary supplement and influence their purchase decisions.

Although this information is not mandatory and is provided voluntarily by the market operator, it is also regulated by law, which defines the term “claims” and sets a range of requirements to ensure they are truthful and not misleading.

There are two types of such claims. Any voluntary information implying, even implicitly, a beneficial relationship between the consumption of the dietary supplement or an ingredient in it and the consumer’s health is classified as a “health claim.” Health claims should not imply that the dietary supplement can diagnose, prevent, or treat human diseases.
Any indication of the energy value, nutrients, or other substances contained, not contained, or contained in reduced/increased amounts in the dietary supplement is a “nutritional claim.” Such claims provide information about the product’s nutritional composition to interest target consumers.

Legislation sets clear rules for the use of claims in labeling, accompanying documents, and advertising. Claims must not mislead consumers, create doubts about safety, encourage excessive consumption, or assert that a balanced diet cannot provide necessary nutrients. It is also prohibited to use claims that could instill fear in consumers.

Claims are allowed only if there is scientific evidence of the beneficial effects of a nutrient in significant quantities that can be absorbed by the body. Claims must be understandable to consumers and relate to products ready for consumption according to the manufacturer’s instructions. Market operators must have evidence of the product’s compliance with claim conditions, such as laboratory test results or calculations of ingredient content.

Comparisons of food products within the same category are allowed, indicating the difference in nutritional value, but comparisons must be fair and pertain to equal quantities of products. Claims must be presented in words and numbers and can also be expressed graphically.

Labeling must include information on the importance of a balanced diet, the quantity of the product required to achieve the effect, warnings for specific groups of people, and a warning about the dangers of excessive consumption. References to general benefits are only possible alongside specific health claims. Claims suggesting harm in the absence of product consumption, weight loss, or recommendations from individual doctors are prohibited.

Only legally established claims regarding disease risk reduction and children’s health are allowed. Labeling must indicate that diseases have several risk factors, and changing one factor may not have a significant effect.

Features of dietary supplements from other markets
If the chosen dietary supplement for OB originates outside Ukraine, the brand owner must consider that its composition may not comply with national legislation, as the regulatory framework differs depending on the country of origin. This also applies to supplements developed for the EU market, as despite the Ukrainian legislation being harmonized with European standards, there are still some differences due to untimely updates of already adopted legal acts or delayed adoption of new ones.

For example, vitamins and minerals can only be added to dietary supplements in permitted forms. Some forms of these substances allowed in the EU are not permitted in Ukraine. Therefore, the brand owner should carefully check the product composition for compliance with Ukrainian legislation before deciding to put their brand on it.

In such cases, it is not advisable to rely entirely on the label template developed and provided by the manufacturer. The labeling will require adjustments, as a direct translation will not comply with Ukrainian law. The volume of corrections will depend on the country of origin of the supplement, with more attention needed for products from non-EU countries, such as the USA, India, Korea, etc.

Choosing a manufacturer for own brand
When choosing a manufacturer for OB, it is essential to consider not only the availability of a wide range of products, minimum order requirements, and delivery times, pricing, and additional services but also the manufacturer’s compliance with mandatory legislative requirements as a food business operator. Particular attention should be paid to production and quality control.

The selected manufacturer must have implemented good manufacturing practices and a hazard analysis and critical control points (HACCP) system, and preferably a quality management system according to ISO 9001.
The manufacturer should conduct regular laboratory tests of the product, including stability testing, to ensure that dietary supplements remain safe and high-quality throughout their shelf life.

All this will not only demonstrate compliance with legislative requirements but also provide the brand owner with confidence that the product, for which they are legally responsible, is produced in safe conditions and with quality control.

Oksana Oliinychuk, Head of FMCG Department of Cratia
Maksym Bagrieiev Managing Partner of Cratia