Masterclass: Peter Schwarzer, Ingredients Plus
Raw materials are over 70% of COGS and drive most of your claims, labels and marketing. A conversation about seed-to-source supply chains, adulteration, forecasting and the rule of seven.
Raw materials make up more than 70% of cost of goods sold and drive about 90% of the claims evidence, labels and marketing behind a product. So we sat down with Peter Schwarzer of Ingredients Plus, a former jackaroo, champion footballer and viticulturist who has become the go-to contact for product developers and contract manufacturers looking for raw materials. This is an edited recap of the conversation.
From a farm in Hungary to a vineyard in Mudgee
Peter grew up on a farm in Hungary under communism, finished a master's in agricultural science and took a gap year in Australia in 1999, working on a farm near Mudgee and learning English on the job. He later ran a vineyard maintenance business for about five years before a recruiter connected him with Bronson & Jacobs, then part of Orica, which wanted agricultural knowledge to grow its herbal export business. The early work was import permits, quarantine inspections and the fumigation or irradiation of imported botanicals. Complementary medicine followed, and Ingredients Plus around 2015.
The connector
Peter's value is not knowing every botanical name; it is knowing the people who do, and being willing to refer a client to a competitor when that is the right answer. Raw-material quality starts at the source, and the people who sit between manufacturer and supplier decide how much of that quality survives.
He also sells brand-first. Selling only to contract manufacturers gives an incomplete picture, so he approaches marketing companies and practitioners too.
The rule of seven
Sales cycles are long and depend on timing, product roadmaps and budgets. Peter's rule is that an ingredient has to be presented about seven times before it gets traction. One iron chelate took two and a half years to produce a first order. The risk cuts both ways: a brand can adopt an ingredient only after a competitor has heard the same pitch six times.
Forecasting floor stock
Forecasting is hard because it depends on contract manufacturers and brands, and many brands forecast poorly. The first batch is the hardest to predict; forecasts improve as sales data accumulates.
Finding and vetting suppliers
Trade shows and industry networks are the main sources. Peter researches new exhibitors before a show and meets them in person. Vetting covers TGA listing, clinical data, origin, manufacturing facilities and whether the supplier is a trader or a producer.
Newcomers should understand the full cost chain from raw material to finished good. Peter will not do business on an ingredient whose price is unrealistically low for its origin: a kilo of raw herb that costs a few dollars cannot support a cheap extract.
Adulteration and spiking
Spiking is adding cheaper substances to inflate test results or hide substitution. There was a period when it was widespread; DNA identification and better standardisation have improved things, but it remains a live concern, as global curcumin studies and TGA warnings show. Peter described bulk drums where only the top layer is the right product. Testing only the top is not testing.
Why distributors still matter
People buy from people they trust. Distributors add warehousing, small-lot distribution and logistics support that suppliers cannot provide to small buyers. Brands should visit their warehouse regularly and see real stock.
Supply-chain pressure
Air freight is expensive, partly because passenger flights carry most air cargo and capacity has been cut. Urgent orders arrive with unrealistic timelines.
Trends towards 2025
Gut health and the gut-brain connection keep growing. Fermentation is enabling products like vegetarian chondroitin sulfate. Bioavailability is getting attention. Herbal actives with good clinical data and eye health are expected to grow, and sustainability and upcycling of by-products are increasingly attractive. In Europe, probiotics, organic herbs and origin stories.
Brands find Ingredients Plus through its website, LinkedIn and industry publications; manufacturers usually arrive through purchasing teams, and the process is a conversation about their projects and compliance needs.