Margin Shaving in the Dietary Supplement Industry
by Anthony Roberts
Most supplement consumers are happy with products that come within a few percent of label claims. But the Food and Drug Administration isn’t, and you shouldn’t be either.
We’ve seen it before: lab tests posted online, and a product (let’s say protein powder) that falls a gram or two shy of the label claim. Most people will say that’s not too bad, and keep buying the product. And I realize it seems absurd to worry about a couple of grams per serving. It’s not.
Consider this: if you buy a jug of protein powder that’s meant to contain 30 servings, each at 20 grams of protein, and it’s tested out at 1–2g less per serving, that means you’re losing a whole jug of protein per year (assuming you consume a shake per day). So you’re paying for 12 jugs, but only getting 11 months worth of protein.
That’s Margin Shaving.
The more you purchase, the more you lose. If you’re drinking two shakes per day (and 40 grams is a minimal amount, I think), you’re paying for two jugs of protein each year that you never receive. Per serving, this is a minimal amount — but added up, it’s a ton. If you buy a case of RTDs each month, it’s be like losing a full bottle (at least). Shaving these margins can add hundreds of thousands, if not millions, of dollars to a brand’s annual income. They’re not only giving you less protein, you’re being forced to buy more than you would have.
Until now, dietary supplement companies have been claiming safe harbor protection, because in foods with naturally occurring nutrients, the nutrient content of the must equal at least 80 percent of the value declared on the label. But for foods where a nutrient is not naturally occurring (i.e. it’s added to the food) the nutrient content of the composite must be at least equal to the value for that nutrient declared on the label. There is a 20% variance for the amount of carbohydrate in a medium orange, for example. Protein powder is not, like an orange, naturally occurring. Neither is anything in a pre-workout powder.
The protein in a serving of protein powder is a Class I Nutrient, meaning it’s an added nutrient in fortified or fabricated foods. As such, it needs to be present at 100% (or greater) of the label claim. A Class II nutrient is a naturally occurring nutrient, and for this category, there is a 20% variance allowed against label claims. But protein powder isn’t naturally occurring. You can’t go out to a field and pick a basket of whey protein powder. Nor does whey protein powder come out of a cow.
Milk is pasteurized, the whey is separated out during cheese making (plus another pasteurization), then it’s filtered and concentrated, dried, and used to fabricate your monthly jug of protein. That’s not a naturally occurring nutrient by any stretch of the imagination, and the end result is the type of fabricated food that contains Class I nutrients. It’s not synthetic, for sure. But that doesn’t make it naturally occurring.
The problem is that supplement consumers are accustomed to companies not giving them what they pay for. Lab tests showing product to be a few percent off, maybe a couple of grams, will be hailed as “pretty good,” by most. Or at least “not bad.” But it is bad. You should get what you’re paying for, not 90 or 95% of what you pay for.
According to Labdoor.com, the average protein supplement deviates off its label claim by 12.7%, with protein powders averaging -7.8% and protein RTD supplements at 10.6%. That’s not an acceptable margin for error and it’s not an error at all. It’s margin shaving.
Put this in perspective and think about companies selling hundreds of thousands of jugs of protein per year, and we are talking a six-figure difference in their net profits. Still think it’s not a big deal, or just a marginal error?
It’s absolutely not. It’s purposeful margin shaving, and companies have used it to reap millions of dollars in profit while ripping you off.
Source: https://medium.com/@anthonyroberts/margin-shaving-in-the-dietary-supplement-industry-6ed1a5baeb7c
by Anthony Roberts
Most supplement consumers are happy with products that come within a few percent of label claims. But the Food and Drug Administration isn’t, and you shouldn’t be either.
We’ve seen it before: lab tests posted online, and a product (let’s say protein powder) that falls a gram or two shy of the label claim. Most people will say that’s not too bad, and keep buying the product. And I realize it seems absurd to worry about a couple of grams per serving. It’s not.
Consider this: if you buy a jug of protein powder that’s meant to contain 30 servings, each at 20 grams of protein, and it’s tested out at 1–2g less per serving, that means you’re losing a whole jug of protein per year (assuming you consume a shake per day). So you’re paying for 12 jugs, but only getting 11 months worth of protein.
That’s Margin Shaving.
The more you purchase, the more you lose. If you’re drinking two shakes per day (and 40 grams is a minimal amount, I think), you’re paying for two jugs of protein each year that you never receive. Per serving, this is a minimal amount — but added up, it’s a ton. If you buy a case of RTDs each month, it’s be like losing a full bottle (at least). Shaving these margins can add hundreds of thousands, if not millions, of dollars to a brand’s annual income. They’re not only giving you less protein, you’re being forced to buy more than you would have.
Until now, dietary supplement companies have been claiming safe harbor protection, because in foods with naturally occurring nutrients, the nutrient content of the must equal at least 80 percent of the value declared on the label. But for foods where a nutrient is not naturally occurring (i.e. it’s added to the food) the nutrient content of the composite must be at least equal to the value for that nutrient declared on the label. There is a 20% variance for the amount of carbohydrate in a medium orange, for example. Protein powder is not, like an orange, naturally occurring. Neither is anything in a pre-workout powder.
The protein in a serving of protein powder is a Class I Nutrient, meaning it’s an added nutrient in fortified or fabricated foods. As such, it needs to be present at 100% (or greater) of the label claim. A Class II nutrient is a naturally occurring nutrient, and for this category, there is a 20% variance allowed against label claims. But protein powder isn’t naturally occurring. You can’t go out to a field and pick a basket of whey protein powder. Nor does whey protein powder come out of a cow.
Milk is pasteurized, the whey is separated out during cheese making (plus another pasteurization), then it’s filtered and concentrated, dried, and used to fabricate your monthly jug of protein. That’s not a naturally occurring nutrient by any stretch of the imagination, and the end result is the type of fabricated food that contains Class I nutrients. It’s not synthetic, for sure. But that doesn’t make it naturally occurring.
The problem is that supplement consumers are accustomed to companies not giving them what they pay for. Lab tests showing product to be a few percent off, maybe a couple of grams, will be hailed as “pretty good,” by most. Or at least “not bad.” But it is bad. You should get what you’re paying for, not 90 or 95% of what you pay for.
According to Labdoor.com, the average protein supplement deviates off its label claim by 12.7%, with protein powders averaging -7.8% and protein RTD supplements at 10.6%. That’s not an acceptable margin for error and it’s not an error at all. It’s margin shaving.
Put this in perspective and think about companies selling hundreds of thousands of jugs of protein per year, and we are talking a six-figure difference in their net profits. Still think it’s not a big deal, or just a marginal error?
It’s absolutely not. It’s purposeful margin shaving, and companies have used it to reap millions of dollars in profit while ripping you off.
Source: https://medium.com/@anthonyroberts/margin-shaving-in-the-dietary-supplement-industry-6ed1a5baeb7c