Alternative Product Wholesale Solutions

Alternative Product Wholesale Solutions

Product Categories in a State of Constant Change

In the fast-paced world of alternative products, challenges abound. New regulations are enacted in the face of moral panics, old regulations are rewritten as scientific studies separate myth from fact, and entire product categories rise and fall rapidly as consumers latch on to the “next big thing.” The legality of products is called into doubt and misinformation spreads (and is the subject of heated debate). Retailers may be simultaneously excited by the opportunities in previously untapped markets and be reluctant to dive in after being burned by the collapse of fads or sudden product bans. 

Specific Challenges

Compared to traditional product categories, additional logistical hurdles also present themselves. Products like CBD and kratom are strictly regulated, placing them in a “high-risk” category serviced by fewer payment processors, making e-commerce and credit card processing in brick-and-mortar retail more difficult and costly. Supply chains may be impacted by regulations, for example, ownership and growing of live kratom (M. Speciosa) plants is illegal in the United States, necessitating partnerships with growers overseas – ensuring quality in these circumstances presents an additional challenge. 

Alternative Product Wholesale Solutions
Alternative Product Wholesale Solutions

Nicotine Products and the Shifting Legislative Landscape

Since their arrival on the market in the early 2000s, e-cigarettes and vape devices have been a booming industry, but one marked by upheavals. Most recently the ban on flavored “e-juice” pods which has affected many well-known brands such as Juul which sold single-use pods in a variety of flavors. This ban was enacted to curb the rise of vaping in teenagers, and underaged use of vape products continues to be a hot button issue, with the marketing of those products under intense scrutiny. 

Self-contained, flavored, single-use vape devices are currently exempted from the flavor ban and are sold in a wide variety of flavors. Some brands have, however, begun to rename flavors and alter the marketing materials and packaging of their devices to reduce their appeal to minors.

Another challenge faced by wholesalers and retailers is the proliferation of counterfeit devices, which pose dangers to consumers both through unapproved e-juice formulations and the potential for malfunction. This has led some brands (like BIDI Vapor) to take a proactive approach to making their products traceable and easy to authenticate through a variety of tests. 

The Nutraceutical Industry

Defined as food-derived substances which provide health benefits beyond nutritional value, nutraceuticals have been a product category for several decades and today it is estimated that the global nutraceutical market is worth over $100 billion USD. Most nutraceuticals are subject to the same FDA regulations as other dietary supplements and food additives under the Food, Drug and Cosmetic Act. Manufacturers are expected to adhere to current GMP (Good Manufacturing Practices).

Nutraceuticals exist to help with a wide variety of health objectives, such as:

  • Regulation of metabolism
  • Improvement of bodily functions (e.g., circulation, post-workout recovery)
  • Enhancement of mood, focus and energy
  • Reduction of everyday aches and pains
  • Slowing of age-related decline
  • Weight loss

A driving force in nutraceutical product innovation is consumer demand for product purity due to the desire for individuals to have their own customized supplemental regimen that targets their specific concerns. Additionally, many consumers who have become mistrustful of “Big Pharma” and expensive traditional medicines may turn to nutraceuticals as an all-natural and more cost-effective way to maintain their wellbeing. 

Apart from those who are simply health-conscious and looking for all-natural remedies, nutraceuticals are increasingly used by athletes who are looking for any competitive edge they can get through nutrition and supplementation. 

The Saturated CBD Market

Hemp-based CBD is legal for use and sale in the majority of United States jurisdictions (with notable exception including Nebraska, Idaho, and South Dakota), although marijuana-based CBD is subject to much stricter regulations on use and sale in many states. The differentiating factor between them is the presence of tetrahydrocannabinol (THC), the chemical compound associated with the “high” experienced by users of marijuana. Cannabinol (CBD), the active of component of CBD, is found in larger concentrations in hemp plants as opposed to in cannabis which has a higher concentration of THC.   Manufacturers of CBD products are increasingly offering laboratory reports to verify the CBD content of the products they offer and also their adherence to GMP. 

CBD is not used recreationally in the same manner as marijuana, but is instead more frequently turned to for help with various health objectives including:

  • Pain relief
  • Help sleeping
  • Stress reduction
  • Reducing inflammation

Years of concerted effort to educate the public on the differences between CBD and marijuana have made CBD a mainstay in the health & wellness industries and it is seen as an additional revenue stream for professionals like physical therapists and yoga instructors. The downside for manufacturers is that the market has become highly saturated, with CBD available in a wide variety of forms, from edible gummies to tinctures and more. The ubiquity of these products makes it difficult for brands to stand out. Wholesalers and retailers may be wise to diversify with new categories of alternative product offerings. 

Kratom is Becoming Mainstream

Where CBD was once the bleeding edge of alternative products, the next big thing is kratom. Kratom (M. Speciosa) is a plant native to southeast Asia with a long history of medicinal and ceremonial use in the regions from which it originates but has recently found increasing popularity in western markets like the United States. The alkaloids mitragynine and 7-hydroxymitragynine are the active compounds and act upon the same receptors in humans as chocolate and caffeine. Significantly, it also acts upon the same receptors as opioids commonly found in prescription pain medications. Some users of kratom have turned to it as an alternative to opioid-based medications and as a means to lessen the severity of opioid withdrawal symptoms.

The DEA used its emergency-scheduling powers to classify kratom as a schedule-1 substance in 2016 but quickly overturned the decision when met with public outcry and calls from congress to reverse course.

Now, consumers turn to kratom to address many of the same needs as CBD, and those looking for something new may soon come to see it as a viable alternative as it gains more mainstream acceptance. Kratom users report that it is potent in small doses and fast-acting as compared to CBD, with positive effects on mood, energy, and stress. They note that different strains of the plant produce differing effects, leading sophisticated consumers of kratom to develop their own blends. Kratom users are enthusiastic about sharing their experiences and positive outcomes, and this informal word-of-mouth campaign is leading to surging interest and consumer demand for more sophisticated product offerings. Kratom has been typically offered in the form of an extract in powdered or capsule form, though as it becomes increasingly mainstream, new forms are emerging to fill many niches. Having not reached the level of cultural saturation that CBD has, kratom can now also claim an elusive “it” factor that draws consumers to new products.  Opportunities for the creation of new markets through branding and consumer education are strong.

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