GRAS Questions: Why Should I Invest in a GRAS when Everyone is Already Selling My Ingredient?

August 3, 2019 - 6 minutes read

“Why should I invest in a GRAS when everyone is already selling my ingredient?” Well, to be frank – it’s the law.

“Any substance that is intentionally added to food is a food additive, that is subject to premarket review and approval by FDA, unless the substance is generally recognized, among qualified experts, as having been adequately shown to be safe under the conditions of its intended use, or unless the use of the substance is otherwise excepted from the definition of a food additive. 1

While compliance with the law are the ethical and lawful actions a manufacturer should take, neither is the first path chosen by some, as they perceive the risk of FDA action to be very low. So, while an FDA warning letter could have a negative impact on their brand, some companies choose to ignore these risks. Just as kudu (an antelope-like animal) reduces risk of predation by staying with the herd, some manufacturers hope to avoid regulatory action by FDA by mirroring their fellow noncompliant competitors.2 “We can’t get in trouble if everyone is breaking the law, right?” No, it just means you are more likely to have company at the Defendants’ table.

If our social-contract obligation of compliance with the law or risk of FDA sanction are not adequate motivation for some manufacturers to pursue GRAS, are there other reasons to pursue ingredient compliance? Yes, however, we need to shift our perspective from viewing the risks of not doing a GRAS to opportunities presented by doing a GRAS.

1. Investing in a GRAS distinguishes your products and brand image from competitors by having a third party verify the safety and quality of your ingredients.

In a proverbial sea of similar products, it may feel safe not to invest in a GRAS because, “no one else has a GRAS for their products”. But what people often forget, is that it’s not always good to go unnoticed; that is, the very same competitors that provide you concealment and the feeling of safety in the herd, do so because the products in the herd are indistinguishable from one another. So, while a manufacturer may avoid the scrutiny of FDA, he also might not get the attention of prospective clients – you just can’t have it both ways. A GRASed product can help you to distinguish your product from the others in the herd; that is, while the purpose of GRAS is nominally to show that your ingredient is compliant with Federal law; it also has a couple of lesser perceived benefits. First, it can distinguish your product as having high quality ingredients because conducting a GRAS shows that your product has been shown to be safe. GRAS functions much like a quality control certification that is, your team has done its due diligence to ensure ingredient safety, and therefore, quality. Second, it fosters trust in your company’s brand. Clients that purchase your ingredient will know that if they buy from you, they can use your ingredient knowing that it is safe, compliant, and food grade.

2. Few manufacturers will tolerate the risk presented by a non-compliant product and certainly no Fortune-500 food companies. What enticement can you ever offer that would make another company risk their brand with an illegitimate product?

While some manufacturers do not pursue GRAS and may accept the potential risks of non-compliance, a company with a long-standing favorable brand identity cannot. How much is the cost of a GRAS going to add to product price vs. loss of long standing favorable brand identity? Requiring compliant ingredients for a long-standing brand is a no-brainer. Second, larger, successful companies with a popular brand feel it is more difficult to avoid FDA scrutiny, than a small, regional brand – there is no blending in with the herd for the biggest kudu. The combination of these two variables makes FDA compliance a top priority. When sourcing an ingredient or acquiring a new brand, ensuring ingredients are compliant becomes a matter of “due diligence”. Taking the time to make someone else’s product compliant just isn’t worth the time and trouble.

3. If your non-compliant product undergoes a mandatory recall ordered by FDA, will your customers wait for you to take a second bite of the apple to comply?

No.

The bottom line.

When answering the question “why should I invest in a GRAS when everyone is already selling my ingredient?”. Understand that FDA sanction is not the only risk. There is the opportunity cost of distinguishing your brand and being a valued manufacturer by your customers. So, when contemplating the investment on GRAS, don’t just consider the risk of FDA action but also your appetite for opportunity.

References:

  1. FDA (2018) Generally Recognized as Safe (GRAS).
  2. Hamilton, W.D. (1970) Geometry for the Selfish Herd.
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