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Amazon Briefing: How new Amazon requirements could reshape the Wild West of supplements

This is the latest installment of the Amazon Briefing, a weekly Modern Retail+ column about the ever-changing Amazon ecosystem. More from the series →

Amazon is the largest supplement retailer ahead of Walmart and Target. Now, it’s cracking down on products that aren’t independently vetted, a move insiders say could be a game-changer for the industry.

As of last month, Amazon now requires dietary supplements sold in its U.S. store to be verified by a third-party testing, inspection and certification organization. Amazon has approved three laboratories that brands can work with: Eurofins, UL and NSF International. Brands can still use an accredited in-house lab to vet their products, but sellers will need to submit the findings to Eurofins, UL or NSF International to get the green light from Amazon.

It’s a major change for the supplement industry, which has grown in scope and influence over the past few decades as consumers incorporate more vitamins, minerals and proteins into their diets. In the last 30 years, the number of supplements sold on the U.S. market has ballooned from 4,000 to some 95,000, per the Federal Drug Administration. The FDA has regulated the industry since 1994, and yet, rules around supplements in the U.S. remain relatively unchanged.

While the FDA does not require third-party testing for supplements, the fact that Amazon now does may put more pressure on the industry, sources say. Amazon made more than $12 million in supplement sales for the 12 months ending August 2023, per data from SPINS/ClearCut Analytics.

Amazon’s new rules for third-party testing cover supplements for sexual enhancement and weight management, in addition to dietary supplements. “We work hard to ensure the products offered in our store are safe, and we have teams dedicated to developing and updating our policies, evaluating listings and continuously monitoring to prevent unsafe and noncompliant products from being listed,” an Amazon spokesperson wrote in an email to Modern Retail. “We are always looking for ways to innovate on behalf of our customers, and by updating our policy on dietary supplements, we are adding new controls to raise the bar further on the safety standards in our store.”

Amazon’s approach is not novel, as CVS Health began requiring third-party testing for all supplements in 2019. But Kat Schneider, founder of the vitamin company Ritual, told Modern Retail that Amazon’s new policy for dietary supplements could help the issue of third-party testing “come to a head.”

“A lot of brands are not third-party tested,” she said. “But I think this is going to change.”

Amazon’s new testing requirement also comes as it remains under fire for selling counterfeit supplements. In 2019, Amazon warned customers that Align supplements they purchased weeks earlier were likely fake. Last April, two supplement brands, Now and Fungi Perfecti, found that counterfeits of their products were being sold on Amazon. Amazon took these products down but Now had “difficulty in communicating with Amazon” about the issue, its vp of global sales told Natural Products Insider.

Even with supplements being scrutinized more than ever, retailers and platforms are the ones making and enforcing new rules for brands.

The FDA’s Dietary Supplement Health and Education Act of 1994 lays out requirements around how supplements are labeled, how they are approved and what claims they can make. Per FDA rules, the FDA does not need to approve dietary supplements for safety before they hit the market.

Still, drug companies are responsible for testing and evaluating products under the FDA’s “good manufacturing processes,” Megan Olsen, general counsel for the Council for Responsible Nutrition, a trade association for the dietary supplement industry, told Modern Retail. That testing can be done by a third party or by the manufacturer’s in-house lab.

Ritual, which launched in 2016, positions transparency as one of its selling points. It lists where and what suppliers its ingredients come from and requires all products to undergo third-party testing. In fact, Ritual got rid of “a lot of products” and “millions of dollars in products” because they didn’t pass third-party tests, Schneider said.

“Your manufacturer can tell you something is fine because they tested it,” Schneider said. “But it’s never been more important to then go to a lab and get their results. It’s something that seems so basic and obvious. But it’s not a requirement right now in the industry… It’s probably the most basic thing that I don’t think anyone is really thinking about.”

According to a 2020 NCBI study of college athletes, more than 90% of those surveyed said it was essential to know if a dietary supplement was third-party tested. However, only 57% said they purchased supplements that were third-party tested.

For years, U.S. lawmakers and government officials have called for more stringent supplement regulations in the country, especially as more players start selling products online or via retailers like The Vitamin Shoppe or GNC. The Vitamin Shoppe’s parent company went private in a $2.6 billion deal in 2023, but The Vitamin Shoppe’s full-year revenue for fiscal 2022 totaled $1.2 billion, up from $1.1 billion in 2021.

In 2019, then-FDA Commissioner Scott Gottlieb said he was “concerned that changes in the supplement market may have outpaced the evolution of our own policies and our capacity to manage emerging risks.” In 2022, U.S. Senate Majority Whip Dick Durbin (D-IL) and U.S. Senator Mike Braun (R-IN) introduced the Dietary Supplement Listing Act, which would require dietary supplement manufacturers to list their products with the FDA and disclose the name and amount of each ingredient, warnings and precautions for use and allergen statements. The legislation did not pass.

Ritual’s Schneider told Modern Retail that the brand has been in talks with “members of both sides of the aisle” about updating supplement legislation in the U.S., especially around the use of heavy metals like lead, arsenic or mercury. Those remain in some supplements, Schneider said, which she said speaks to the importance of third-party testing, as well. She and other Ritual executives, however, are optimistic that change is on the horizon when it comes to supplement oversight.

“What we’re seeing is consumers are demanding safe, efficacious and sustainable products across all different platforms,” Lindsay Dahl, chief impact officer at Ritual, told Modern Retail. “And none of that momentum has slowed in recent years. It’s only going to increase.”

Julia Waldow

Amazon unveils new TV ad units

Amazon is ramping up its plan to turn TVs into one big mall. 

On Tuesday, Amazon unveiled three new interactive and shoppable ad formats ahead of the e-commerce behemoth’s first TV advertising upfront. Amazon’s trio of ad formats include carousel ads, pause ads and brand trivia ads, all of which leverage the Seattle-based company’s e-commerce know-how as a selling point to brands and advertising executives. 

The carousel ads let viewers browse and shop multiple related products on Amazon during ad breaks on Prime Video, the company said in a news release. With pause ads, customers will see an ad when they press pause on their living room remote, including prompts, such as “Add to Cart” and “Learn More.” Lastly, Amazon’s brand trivia ads deliver factoids about advertisers’ brands as viewers shop on Amazon.

It’s all part of the e-commerce giant’s push to turbocharge its $47 billion advertising unit, a relatively new but fast-growing area of Amazon’s overall business. Amazon’s pitch is pretty compelling. Streamers have steadily taken ad dollars away from traditional television networks in recent years. But Amazon in particular has the potential to crack shoppable TV thanks to its trove of first-party shopper data that can be leveraged to better target ads to viewers. 

“TV has always been a very effective form of marketing and advertising, but it’s also been the least measurable medium, and Amazon is changing that in a significant way,” said Andrew Lipsman, an independent media analyst at Media, Ads + Commerce. “They have the ability to target ads more specifically to the right audiences, and then measure whether those ads drive sales of the products being advertised, at least through Amazon.”

On top of that, Amazon’s delivery speeds are faster than ever before, making its pitch to brands all the more attractive. The challenge will be convincing media buyers of the future of shoppable ads, as well as getting passive video watchers to view their TV screens as virtual malls. 

“The value exchange has to really be compelling for consumers to start doing new things, and because TV has always been a lean-back experience, you’re asking them to take action,” said Lipsman. “That’s something that some set of consumers may always resist.”

As shoppable TV is still in its infancy in the U.S., Amazon may also struggle to keep brands interested, especially if growth happens slowly, said Lipsman. 

Prime Video makes up 2.8% of all TV viewing in the U.S., according to March data from Nielsen.

Allison Smith

Amazon news to know

  • Amazon is continuing to invest in robots in its warehouses, Business Insider reports. The company has more than doubled the number of robots it uses in the last three years.
  • The latest country Amazon is expanding into is South Africa. Competitors like Shein and Temu have already set up operations in the country.
  • Amazon is continuing to invest in electric delivery vehicles. The company is putting 50 new heavy-duty electric trucks onto the roads of Southern California, Axios reports.

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