Executive Interview: Q&A with Harvey Kamil, President and CFO, NBTY

Harvey Kamil, President and CFO, who has been with NBTY since 1982, was named President in January 2002. The company which he helped build is now by far the largest supplement manufacturer, operating internationally and with subsidiaries in every channel through which supplements are sold. The company wields tremendous influence, and buying power. Through all the company’s growth and acquisition Mr. Kamil has stayed personally involved in many areas of industry. He is currently a board member of the Council for Responsible Nutrition, the Coalition to Preserve DSHEA and the Natural Products Association (formerly NNFA).

How did you enter the supplements industry?

Twenty-five years ago I was fortunate to meet Arthur Rudolph, at the time the Chairman of Nature’s Bounty, Inc. Nature’s Bounty was one of the first companies to introduce natural vitamins into pharmacies. That meeting went very well. It lasted all day; by the end of the day, we were both convinced we could work together. At that time, nutritional supplements were not in the mainstream and only a small percentage of the population knew anything about nutritional supplements. I, on the other hand, had been taking supplements my entire life and knew the enormous benefits of supplements. Three years later Scott Rudolph came on board. As Chairman and CEO of NBTY, Scott has been the driving force of the growth of the Company. The Company started to expand by merging with other companies in the industry. It was an exciting time. Since then, I have never looked back – it has been fun every year. It has been great to work for a company that is a real leader in nutritional supplements. Nutritional supplements have entered the mainstream and have become a multi-billion dollar industry.

Did you have a mentor?

I did not have a mentor. However, as a member of the management team at NBTY, I had the opportunity to meet with many of the industry leaders over the years. These people were far ahead of the thinking at the time: Arthur Rudolph of Nature’s Bounty, Allen Skolnick of Solgar, Carl DeSantis of Rexall Sundown, and Henry Rosenberg of Nutrition Headquarters. All of these forward thinkers contributed to my knowledge of the industry and served consumers. I learned a lot from all of them. The consumer is always right. Always deliver the highest quality nutritional supplements with the best value to your consumer. I speak as frequently as possible to the leaders of the industry trade groups to stay in touch with new developments in our industry. David Seckman of the Natural Products Association; Steve Mister of the Council for Responsible Nutrition and Mark Blumenthal of the American Botanical Council -- all of them have helped me to respond to the issues that face us on a daily basis.

What would you say are the most valuable lessons you have learned over the years?

The lesson is the customer is king. Always give the customer good value. The mission statement of NBTY is “To deliver the highest quality nutritional supplements with the best value to the customer.” Be good to your customer and they will be good to you. As a manufacturer, I am part of a team that is driven by quality, service and price.

You sit on the boards of the Natural Products Association, CRN and the Coalition to Preserve DSHEA. Why do you think association participation is important and why these specific groups for you?

It is important that our industry be represented with a single voice to the legislatures, the media, and the medical community and to the general public. The Natural Products Association mission “is to advocate for the rights of consumers to have access to products that will maintain and improve their health, and for the rights of retailers and suppliers to sell these products”. The Council for Responsible Nutrition’s mission “is to improve the environment for member companies to responsibly market dietary supplements by enhancing confidence among media, healthcare professionals, decisions makers and consumers”. The Coalition to Preserve DSHEA - the Dietary Supplement Health and Education Act – “is a non-profit organization funded through donations from suppliers of dietary supplement products and services. Building upon the ongoing efforts by industry trade associations, the Coalition's mission is to protect DSHEA to ensure continued access to safe, effective and affordable dietary supplements.” Also members of the American Herbal Products Association which “exists for only one purpose: to support responsible commerce in herbal products”. In addition, members of the Dietary Supplement Education Alliance are “committed to developing comprehensive quality practices and standards for dietary supplements.” They “believe increased levels of research in combination with widely accepted standards will benefit those who use, prescribe and make dietary supplements. In promoting a science-based understanding of the health benefits associated with supplementation, we believe the quality, safety and availability of dietary supplements can only increase”. Additionally, the American Botanical Council “is the leading independent, nonprofit, international member-based organization providing education using science-based and traditional information to promote the responsible use of herbal medicine”.

Without these organizations our voice would not be heard and the lesson I have learned is that even though you are helping the public, there is still a group of people who refuse to accept the overwhelming science that nutritional supplements are beneficial to ones health and those people are not going away.

Some of us advocate the need for broader participation in our trade associations, yet more than half of the companies involved in our industry are not even members of these groups. Why do you think this is, and how we can increase participation?

It is unfortunate that more companies do not get involved in the industry organizations. They do not because they feel that they get the benefit without paying money through dues or devoting any time. It is the concept of “let the other guy do it and I will go along for the ride for free”. However, the realization is that the enemies of the industry never stop and that their business is in jeopardy without their participation. Just read some of the outrageous negative media coverage; listen to some of the current legislators, whether in the state legislature or congress, to convince these “floaters” to start being more active in the industry organizations. The only way to increase participation is for the industry leaders and store owners to personally call their industry associate with a personal pledge. Since the problems of the industry were not enough to motivate these people and companies, it must be done on a personal level.

Some people say that success in our industry will ultimately be curtailed by the so-called ”pharma conspiracy” against supplements. Do you think this exists and if so what should the industry do about it?

The pharma conspiracy against supplements does exist. It exists because prevention is safer and cheaper than treatment and the people involved in treatment do not want prevention. The only way the industry can fight this conspiracy is to stick together by supporting industry organizations and speaking with a unified voice.

What do you project to be the financial future of the industry?

The financial future of the industry is very promising. It is a simple story. As the population ages there is an entire emphasis on health. And the population is aging. Every 8 seconds someone turns 50. These baby boomers have an enormous amount of buying power and will spend their dollars being pro-active in their health by taking nutritional supplements. Surveys indicate that as the US population ages, individuals move from light users of nutritional supplements to heavy users. The difference is one supplement for light users compared to nine supplements for heavy users. So the industry is in for some substantial increases in volume. The industry is now approximately $21 billion and growing at a 6% rate. Consumers continue to need the help from the local health food stores to learn about the latest new products and the selection of products they should be taking.

What impact will the internet have?

The internet is a convenient method for consumers to learn more about nutritional supplements with the ease of a “click”. You can surf the web and find out the science behind the supplement. The more one uses the internet, the more one is exposed to additional information. And, I think the saying that an educated consumer is our best customer, goes well with nutritional supplements.

What about EU market growth? Where will the biggest sustained growth occur?

The European Union is harmonizing its rules on nutritional supplements through the Food Supplements Directive and its THMPD (Traditional Herbal Medical Products Directive) has been passed. The market for nutritional supplements will expand throughout the European Union. Over 500 million consumers! The growth of the industry is all over the world. The theme is: stay healthy, look good, fight disease. Consumers worldwide want the same thing. So, whether it is in the United States, European Union, South America, China, it is the same. All these markets will grow. Individuals just need the information. The biggest obstacle is the pressure from the drug lobby which wants to inhibit the sale of nutritional supplements to the public. They want to dispense the product “behind the counter” at 10 times the price.

As the industry matures, what do you see as the biggest threats or challenges (or opportunities) that the industry must address to prosper? And how do we as an industry best tackle them?

The challenges are the same as we have discussed: the “doubters” --the negative headlines -- the drug lobby.

The industry has to tackle these threats with science. The studies continue to be overwhelmingly positive for nutritional supplements. We have to stick together to support public relations campaigns that will bring the information to the consumer, support industry associations and continue to write to Congress to pressure the FDA to come out with Good Manufacturing Practice standards.

NBTY ceased selling ephedra in March 2003, well in advance of the ban. While many blame FDA for a faulty basis for the ban, other think the industry handled that situation badly from the beginning. What do you think the industry should do differently in the future when specific supplements come under fire?

I do not believe this industry handled the ephedra issue badly. To this day there is no proven causation between ephedra and illness. I think the responsible manufacturers and retailers did what they had to do. Probably, the public relations campaign would have helped after the ban.

NBTY has grown in the past both organically and by acquisitions. How would you describe future growth opportunities and strategies?

The future growth plans are very exciting. All the Company’s channels of distribution are set to grow at a greater rate than the market. Looking at the global market, NBTY has the ability to sell product in any market. In the US, the Company is increasing its distribution of its existing customers, expanding shelf space and bringing new and unique products to the market. The Solgar brand, run by Rand Skolnick, has come back to be the brand of choice to the natural channel. The Company has plans to expand manufacturing outside the United States to better serve the customers in the European Union. We are developing new technologies and are improving productivity as we expand.

Rumor has it that NBTY will no longer sell Ester C to other manufacturers. Is this accurate and what is the company’s plan for that ingredient?

Ester C will no longer be sold as a private label brand. NBTY has converted the product to a nationally advertised brand. It will be found in only the finest health food stores and other prestigious retailers. The Company is spending huge sums of money to educate the consumer of the benefits of Ester C. While some supply manufacturers may be upset that they no longer have the product, the big winner is the health food store and the consumer.

If the entire supplements industry was one company and you were CEO of it, how would you move us forward given the current climate of sustained media bashing, continued threats of more restrictive legislation at state and federal levels, controversial testing program headlines, and showed growth in certain key categories?

As we discussed in the past, I would be active in all fronts. I would speak to Congress and Senators, letting them know the benefits of nutritional supplements. I would tell them that the products are safe and effective and can be one of the answers to the continued high cost of health care in the United States. I would take that message to the local State legislators who continually want to act as their own FDA. I would bring the same story to them. I would continue to talk to the health reporters of the media. Their headline bashing does no good; it is not educating the consumer and confuses everyone. I would demand from the FDA that they should come out with Good Manufacturing Practice standards (GMPs). There is no reason why the industry had to wait 13 years. I would be active in advertising and public relations campaigns to bring the current scientific information on nutritional supplements to the public. I would be more active in bringing the same story to the medical community. It is a shame that their nutritional education is limited. And, lastly, I would thank the consumer who continues to have faith in our products.

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.