“Should we manufacture in the U.S. or Canada?”
Most founders think this is a unit-cost question.
Operators know it’s a compliance + documentation + go-to-market question that eventually shows up in cost—through delays, relabeling, rejected lots, retail audits, and rework.
Here’s the reality, without the mythology.
First, U.S. and Canada regulate supplements differently
United States: FDA dietary supplement cGMP (21 CFR Part 111)
In the U.S., dietary supplements are regulated under FDA’s dietary supplement cGMP rule (21 CFR Part 111). The system emphasizes that manufacturers establish specifications and use quality control to ensure supplements consistently meet identity, purity, strength, composition, and contaminant limits.
What that means in practice:
- Your manufacturer must have documented specifications and QC operations
- You’re largely operating in a framework where you can sell once you’re compliant, without pre-market product licensing like Canada (with some exceptions)
Canada: Natural Health Products (NHP) system + site licensing
In Canada, most supplements fall under Natural Health Products (NHPs), which are governed by the Natural Health Products Regulations and a licensing framework.
Two big structural differences:
- Site Licence: To manufacture, package, label, or import NHPs for sale in Canada, the site must hold a licence and demonstrate compliance with Canadian GMP requirements.
- Product Licence (NPN): Products sold as NHPs generally require product licensing (you’ll see an NPN on compliant labels).
Health Canada also maintains GMP guidance specific to NHPs (updated guidance exists and is actively maintained).
Operator takeaway:
Canada tends to force more upfront documentation discipline—especially if you plan to sell in Canada.
Compliance reality: what “GMP” means is different by context
A common founder mistake is treating “GMP certified” as a universal stamp.
In reality:
- In the U.S., you’re judged on whether your systems meet FDA dietary supplement cGMP expectations (21 CFR 111).
- In Canada, if you’re operating in the NHP ecosystem, you’re dealing with site licensing requirements and Canadian GMP expectations tied to NHP activities (manufacturing, packaging, labeling, importing).
Practical impact: the “better” facility is the one whose documentation, testing, and QA release process matches yourtarget markets—not the one that says GMP loudest.
The cost reality: unit cost is only one line item
Where the U.S. can be cheaper (yes, sometimes)
Even with higher labor costs, U.S. manufacturing can win on total cost when:
- You need fast replenishment (lower inventory carrying cost)
- You’re running smaller batch sizes / more frequent POs
- Your demand is volatile (less write-off risk)
- You need rapid iteration (formula, flavor, packaging changes)
You’re paying more per unit sometimes—but buying optionality.
Where Canada can be cheaper (also yes, sometimes)
Canada can win on total cost when:
- You’re selling meaningfully into Canada (and avoiding cross-border rework)
- You’re reducing regulatory friction by building inside the system (NHP expectations, documentation readiness)
- You’re consolidating North America supply strategy (fewer “special Canada labels,” fewer compliance scrambles)
The hidden cost saver is often fewer surprises, not lower manufacturing quotes.
If you plan to sell in Canada, this is the real decision
If Canada is in your channel plan (Amazon.ca, retailers, distributors), you need to think about:
- NPN/product license pathway expectations (product classification matters)
- Site licensing and GMP evidence requirements for entities manufacturing/packaging/labeling/importing for sale in Canada
Operator move: pick a manufacturing + regulatory path that won’t force a later “Canada retrofit” (label claims, formats, evidence, documentation). That retrofit is where time and money disappear.
Speed and control: the underrated differentiator
When something goes wrong (and it will), “distance” becomes cost.
Things operators care about:
- How fast can we investigate a deviation?
- How quickly can we quarantine lots and retest?
- How tight is the batch record + COA package?
- Can we get QA answers in hours, not weeks?
U.S. often wins here simply due to proximity and time zones.
Canada can be comparable—especially if the partner is used to supporting regulated documentation and cross-border expectations.
Trade and tariffs: don’t assume it’s static
Many teams assume U.S.–Canada trade is always frictionless. It’s often smooth, but tariffs and trade measures can change, and policies can introduce sudden landed-cost surprises.
For example, Canada has issued tariff lists on certain U.S. imports in recent policy actions.
Separately, USMCA rules can preserve preferential treatment for qualifying goods, but it’s not “set it and forget it.”
Operator move: treat trade assumptions as a risk variable, not a constant. Model a “tariff shock” scenario even if you think it’s unlikely.
Decision framework: when U.S. vs Canada makes more sense
Choose U.S. manufacturing when…
- Your primary market is the U.S.
- You need speed, iteration, and tighter operational control
- You’re scaling retail and want rapid responsiveness
- You want to reduce inventory and forecasting risk
- Your compliance strategy is centered on FDA 21 CFR 111 execution
Choose Canadian manufacturing when…
- Canada is a meaningful revenue channel (now or soon)
- You want partners steeped in NHP documentation discipline and site licensing context
- You’re optimizing for North America stability over “lowest quote”
- You’d rather build within Canada’s system than bolt it on later (labels, evidence, product pathway)
What founders miss (that costs real money later)
- “GMP” isn’t a strategy — systems and evidence are
- Canada expansion is not just shipping — it’s regulatory alignment
- The cheapest quote is rarely the cheapest outcome
- Speed to fix problems is a cost lever (especially at scale)
- Documentation maturity becomes your brand’s insurance policy
Bottom line
U.S. vs Canada isn’t really a manufacturing debate.
It’s a question of what you’re optimizing for:
- U.S. tends to optimize for speed, iteration, and operational control under FDA dietary supplement cGMP expectations.
- Canada tends to optimize for regulatory alignment and documentation discipline for NHP commercialization—especially if Canada is in your growth plan.
If you want, I can turn this into a simple operator checklist (inputs → decision → what to verify during manufacturer vetting) for your team to use on real quotes.
