The global consumer wellness market is valued at $1.8 trillion, and the wellness market in the U.S. alone grows at 5 to 10 percent every year and is now reaching $480 billion.
Across wellness industries like health, sleep, nutrition, fitness, appearance, and mindfulness, Gen Z and millennial customers are driving the majority of this growth, out-purchasing older generations.
With massive industry growth comes new challenges for health and wellness brands who need to meet high demand and growing consumer expectations for transparency when it comes to how products are formulated, sourced, and manufactured.
They also face additional challenges that impact their overall supply chain management—from meeting stringent safety and quality assurance standards to selling across ecommerce and DTC channels, and offering personalization and custom formulations.
Results of our recent survey on The Current State of Supply Chain, which surveyed more than 600 consumer brands with revenues between $15 million and $750 million about the top supply chain challenges they plan to face in 2024, show that they also face additonal enduring supply chain challenges like material shortages and labor shortages, rising fulfillment and shipping costs, and more.
Health and wellness brands must adapt their processes, tools, and overall supply chain management if they want to meet increasing demand and drive business success despite these challenges.
So, what are the top supply chain challenges for health and wellness brands, and how can they overcome them?
Top 5 Supply Chain Management Issues and Challenges for Health and Wellness Brands
1. Regulatory Compliance and Quality Assurance
The health and wellness industry is subject to stringent regulatory requirements and product safety standards, which can vary significantly across different markets.
In the US for example, maintaining compliance with regulations from agencies like the FDA and FTC are crucial in order to avoid legal issues and protect overall brand reputation.
And they also need to meet strict requirements for labeling and marketing claims.
How to Overcome Regulatory Compliance and Quality Assurance Challenges:
To address this challenge, health and wellness brands should use supply chain tools that help them easily track compliance via centralized document control systems.
They should also conduct regular supplier audits and audits of manufacturing facilities to ensure they consistently meet changing regulations and follow best manufacturing practices, and be able to track results of each audit in one place.
Supplier audits also help brands identify potential risk areas, improve supplier relationships, and increase customer satisfaction.
2. Consumer Demand for Sustainable and Ethical Sourcing
Consumers increasingly demand greater transparency and accountability from health and wellness brands regarding their sustainability practices and ethical sourcing initiatives.
Now more than ever, brands must ensure that they source ingredients from certified suppliers, implement sustainable packaging solutions, and reduce carbon emissions throughout their supply chain.
How to Meet Consumer Demand for Sustainable and Ethical Sourcing
Health and wellness brands can adopt sustainable sourcing practices to address this challenge and collaborate with suppliers and industry partners to reduce their carbon footprint.
This also includes evaluating new and existing providers and looking at sustainable third-party logistic partners and suppliers.
Another way brands can increase sustainability and ethical sourcing? By bringing on supply chain management tools that increase overall supply chain visibility.
3. Personalization and Customization
Health and wellness brands can no longer rely on one-size-fits-all formulations behind their products if they want to win in a competitive market where consumers expect more personalized solutions— from custom nutrition plans and skincare routines to personalized fitness regimens and more.
Brands can not only benefit from using technology and data analytics to offer more personalized products to consumers. They can also benefit from using technology within their supply chain to enable flexible production and distribution processes that accommodate personalized orders efficiently.
How to Overcome Personalization and Customization Challenges
To accommodate the demands of personalized orders, brands must optimize their supply chains for flexibility.
This might involve adopting modular manufacturing systems that can quickly switch between different product configurations or investing in just-in-time (JIT) production methods that reduce waste and improve efficiency.
A responsive supply chain can better handle the complexities of custom orders, reducing lead times and improving customer satisfaction.
4. Omnichannel Selling and Fulfillment
Many health and wellness brands sell across eCommerce, direct-to-consumer (DTC), and brick-and-mortar channels.
This presents unique opportunities and challenges for omnichannel fulfillment.
Health and wellness brands need to fulfill orders quickly and cost-effectively, regardless of whether they originate from traditional retailers, e-commerce platforms, or DTC channels.
However, this can be difficult when multiple fulfillment partners or third-party logistics (3PL) providers exist.
How to Overcome Omnichannel Fulfillment Challenges:
Supply chain teams should prioritize investments in fulfillment infrastructure, inventory visibility, and purchase order management systems to ensure seamless order processing and delivery.
This is likely why more health and wellness brands are beginning to recognize the value of investing in technology that streamlines and automates their fulfillment processes.
Our recent State of Supply Chain survey found that more than a third of brands surveyed plan to implement more cost-effective routing, carrier selection, and freight consolidation strategies to drive more efficient logistics and transportation.
How? 40% of brands surveyed say they plan to invest in new technologies that streamline communication and drive better collaboration with suppliers and fulfillment teams.
Additionally, brands can leverage data analytics and machine learning algorithms to optimize inventory allocation and order routing, minimizing shipping costs and transit times.
5. Lack of Supply Chain Visibility
Supply chain visibility is crucial for health and wellness brands. It allows them to know when goods will reach their destination and when they will be available to proceed to the next step.
Complete visibility into the supply chain is also the only way brands can properly manage costs and other resources within their supply chain and ensure that each step of the PO process runs efficiently and effectively.
Where is visibility most important? Brands included in our recent report identified inventory management, purchase order management, and supplier communication as some of the top areas in which they need more visibility in their supply chain.
How to Overcome Lack of Supply Chain Visibility
To improve supply chain visibility, health and wellness brands should first analyze their current supply chain and identify the pain points where bottlenecks occur. This helps to prioritize remedies for these areas based on what is most important to meeting the company’s goals and objectives.
More importantly, brands need to eliminate siloed technology systems that don’t work well together and instead implement full-featured supply chain management technology that provides real-time access to critical information for quicker, more informed decision-making.
Overcome Supply Chain Challenges With Anvyl
Anvyl connects global supply chain teams, systems, and suppliers to improve collaboration and decision-making from pre-PO issuance through to warehouse delivery— within a single system.
Our flexible tool facilitates real-time collaboration, automates key tasks and processes, and empowers teams with deeper insights that allow them to make smarter decisions faster.
Schedule a demo to learn more about how Anvyl can help your health and wellness brand overcome today’s supply chain challenges — and ensure your products reach consumers on time, on budget, every time.
