Pros and Cons of the Manuka Honey Business

Manuka honey and products that contain Manuka honey have become extremely popular internationally over the course of the past decade.  Many companies have been jumping on the bandwagon by either importing it from New Zealand or manufacturing products that contain it as a functional ingredient in skin care, medical or cosmetic products.  There are many reports, both scientific and anecdotal, that describe the medicinal use of this amazing natural substance so I won’t be going over that in this article.  I would rather touch upon the Manuka honey industry itself and what newcomers can expect upon attempting to capitalize on its tremendous healing potential.

Obstacles that one could expect to encounter include the following: FDA compliance, potency discrepancies, UMFHA, supply chain management and perhaps most of all, consumer perception.

FDA Compliance

If your company is within the United States and you are interested in importing and selling Manuka honey products in the U.S., the Food and Drug Administration may be a challenge you will be forced to deal with.  The FDA has lost credibility among many Americans due to their long track record of approving drugs that are toxic and harmful to humans.  The pharmaceutical business is a multibillion dollar industry that has tremendous lobbying power.  It takes a lot of time and money to get a drug registered and approved by the FDA.  Therefore, the pharmaceutical companies need to vigorously protect their investments and their positioning within the industry.

Thanks to the internet, consumers are more label savvy than ever before.  In recent years, many people have become concerned about the negative side effects caused by pharmaceuticals and have chosen to seek out more natural alternatives.  The pharmaceutical companies are aware of this shift in consciousness and have grown increasingly more concerned about their competition with natural products.

In the U.S., there is a law that states in order for a manufacturer to make a medical claim about a product, it must be registered with the FDA as an approved drug.  People like Dr. Oz can go on their show and legally discuss all of the medical benefits of using Manuka honey because he is protected by laws surrounding the freedom of speech.  However, when a company that sells Manuka honey makes a statement about its health effects, whether it’s on their website or on any other form of media, it becomes an extension of their label and therefore, is subject to all applicable FDA labeling regulations.

If a Manuka honey company makes medical claims about their products on their label, they will require that the products be removed from the shelves of retail stores.  If medical claims are made about Manuka honey products on a company’s website, the FDA has been known to seize Manuka honey imports at customs and hold inventory hostage until the claims are removed and the website is in compliance.  Even if the claims are true and backed by clinical evidence, the FDA will take action if medical claims are made about any product that is not considered to be a registered drug.

Potency Discrepancies

New Zealand scientists have been studying the healing possibilities of Manuka honey for years.  It has been discovered that not all Manuka honey contains the same amount of health benefits that people have come to expect of it.  What makes Manuka honey special isn’t so much the bees that produce it, but rather the floral nectar component that the bees use.  Manuka honey is derived from the nectar of the flowers that grow on the Manuka tree.  It has been discovered that there are unique compounds in this nectar that differentiates Manuka honey from other types of honey. 

Bees make honey for sustenance and since they don’t have any sophisticated measuring equipment, depending on how much of the floral nectar component is used to produce the honey, it could be more potent or less potent.  If Manuka honey has a high enough potency, it’s medicinal value is greater.  If it is less potent, it may be virtually worthless from a medicinal point of view.  Most Manuka honey that is harvested is not particularly potent.  Therefore, the product that is desirable for medical use is in short supply.

Because manufacturers know that there is a lot of money to be made by selling Manuka honey products, this potency issue has been used in their favor.  Because potent Manuka honey is rare and undoubtedly more useful, it is more valuable and costs considerably more than less potent Manuka honey.  However, most consumers are not aware of this and just believe that all Manuka honey has health benefits.  Because certain regulatory agencies such as the FDA and Health Canada don’t recognize New Zealand’s systems for measuring the potency of Manuka honey, some unscrupulous manufacturers have been known to mislabel their Manuka honey as having a high potency when it is, in fact, a low potency Manuka honey, rendering it useless from a medicinal standpoint.

Higher quality Manuka honey brands have had difficulty competing with the less honorable brands that use junk Manuka honey in their products.  Buyers beware.

UMFHA

This is an acronym for the Unique Manuka Factor Honey Association, which is a private organization in New Zealand that has established an industry standard for the potency of Manuka honey.  This organization owns the UMF trademark which has become somewhat of a recognized entity in the Manuka honey industry.  The organization is not affiliated with the New Zealand government, but is rather comprised of members who are affiliated with some of the larger producers of Manuka honey in New Zealand.  This calls into question its level of integrity, given the apparent conflict of interest.

Manuka honey brands can lease the UMF trademark from this organization but dealing with their standards and requirements can be difficult and in some cases, unreasonable.  Some brands tolerate this annoyance due to the fact that some consumers are comfortable with the UMF trademark and believe that, in lieu of regulatory oversight, it may provide some level of quality assurance.

Supply Chain Management

One of the most challenging hurdles faced by the Manuka honey industry is that the global demand for the product far exceeds the supply.  This has significantly increased the price of Manuka honey to a point that many consumers don’t buy it because it’s too expensive.  Because Manuka honey is not an abundant resource, mass distribution of the product is virtually impossible. 

Consumer Perception

There are still many people who are not familiar with Manuka honey or its medical phenomena.  Even though the internet has done its part to increase the level of awareness, the FDA has played a role in stifling its reputation as stated above.  Manuka honey’s high price and scarce supply has minimized its presence on the shelves of many retailer stores.  Whether this fact is a deficit or potential opportunity is debatable.  Either way, Manuka honey brands are faced with the reality that describing precisely what it is their product can do and why consumers should buy it is an extremely difficult task.

Notwithstanding the challenges described above, Manuka honey is in demand and it is an amazing product.  This leaves room for tremendous growth potential and revenue generating possibilities.  Sometimes difficulties like these keep markets from oversaturation allowing entrepreneurs the opportunity to make their mark.  There is still plenty of room to grow in the Manuka honey industry and as consumer awareness becomes more prevalent, so will the opportunities to gain market share. 

For more information on this industry, call Ashlar Consulting Corporation at 305-849-9399 or visit www.AshlarConsultingCorp.com.