Botanical Cost of Quality: An Economic Framework for Botanical Price Floors and Adulteration Prevention

Blake Ebersole¹, Trish Flaster²
¹NaturPro Scientific / Ethical Sourcing Review
²Botanical Liaisons / Ethical Sourcing Review

Abstract

Botanical ingredients used in foods, dietary supplements, and pharmaceutical products are uniquely vulnerable to economically motivated adulteration due to long, opaque supply chains, biological variability, and weak alignment between price and quality signals. 

Despite extensive documentation of adulteration in medicinal plants, the industry lacks an economic framework for identifying when a botanical price is implausibly low relative to the true cost of quality. 

This review introduces the Botanical Cost of Quality (BCOQ) framework, adapted from classical Cost of Quality (COQ) theory, as a tool for establishing economically defensible price floors for botanical commodities. 

Drawing on farm-level cost modeling, post-harvest handling, processing, testing, and compliance costs, w e synthesize published research demonstrating how ignoring these costs creates incentives for substitution, dilution, fraud, or otherwise sub-potent botanical products.

We further review documented adulteration case studies where application of a BCOQ-based price floor would likely have prevented fraudulent procurement. Adoption of BCOQ principles can improve supply-chain transparency, protect farmers, and reduce public-health risk by aligning purchasing decisions with the true economics of botanical quality.

Keywords: botanical adulteration; cost of quality; medicinal plants; supply chain economics; price floors; dietary supplements

1. Introduction

Medicinal plants form the backbone of traditional medicine systems and contribute substantially to modern food, supplement, and pharmaceutical industries. Global trade in botanicals exceeds $100 billion annually. Yet pricing mechanisms remain poorly aligned with product quality, supply chain dynamics, agricultural constraints, economic sustainability, and regulatory compliance.

Unlike industrial commodities, medicinal botanical ingredients used in foods and supplements vary widely in phytochemical composition, harvest practices and processing requirements. However, market prices for disparate products often converge toward a single price, based on “lowest-quality product” pricing. This creates economic pressure that incentivizes adulteration, particularly when authentic material cannot be produced profitably at prevailing prices.

This review applies the Botanical Cost of Quality (BCOQ) framework—an adaptation of classical COQ theory—to these botanical supply chains. Here, we apply farm-level economics and downstream quality costs to establish a model for calculating defensible price floors for a given botanical product.

This is an excerpt to a review paper now in peer-review prior to publication. Contact us to get involved in the BCOQ Project.