NPI: You joined the NOW Foods organization in 1974 and were primarily a retailer, involved in the Fruitful Yield chain of health food stores for over 20 years, focusing on NOW Foods products. With that kind of history, can you describe some pivotal events that have had long-term impact on the industry? What are some of the biggest changes you have witnessed?
One of the most significant changes was the emergence of the healthy grocery store formats, the so-called “super naturals” that are so common now but began with Whole Foods, Mrs. Gooch’s, and Fresh Fields.
I was at the very first Natural Foods Merchandiser Expo West on a panel with John Melman, one of the three founders of Mrs. Gooch’s. Sandy Gooch was a stay at home mom with strong ideas about healthy food being more accessible and John knew how to make that happen. Their stores, which at the time were so impressive, were half the size of the ones we know today.
At the same time Peter Roy was doing Whole Foods Market in New Orleans. He bought 6,000 - 8,000 square feet in 1982. I remember walking though the store with him -- he had gutted the space and it was all sawdust and concrete -- and he was telling me about his vision. We were talking about where the industry would go. Who dreamed natural foods would gain the acceptance it has or that 20 some years later his concept would yield over $3 billion in sales from 170 stores across the US? I don’t think even Peter knew it would be such a huge success. I bumped into him in Anaheim this year. In addition to being brilliant and dynamic, he was one of the most idealistic people then; we all were. We were committed to bringing organics and natural foods to the marketplace, and we were driven to offer healthier living. It’s good to remember your roots.
Who dreamed we would have this impact? Look at the entire generation of baby boomers and their commitment to a healthier quality of life, and interest in longevity and anti-aging. One of the most significant changes would have to be in the way that consumers have responded to the importance of a healthy lifestyle and alternative, preventive health care.
I remember the days when the “mass market” part of this industry didn’t exist. Today, it’s common. There’s been a real shift in our culture to the point where people are becoming much more health-oriented. Certainly, the aging of the baby boom generation has helped that come along. We’ve seen natural products go mainstream and gain credibility and acceptance. That began happening around the early 80’s and extended to K-Mart, the biggest mass market outlet -- the WalMart of those days. It was an exciting time, because it also impacted independent retailers as well. Our Fruitful Yield stores were booming, simply because there was such a great interest in natural products.
NPI: How have things changed in natural products retailing over the past 30 years?
There’s been a major shift in the focus from home-style remedies to science-based solutions. In the past, natural products were always sold on the basis of anecdotal evidence, and to some degree they still are – we take something and there’s a cause and effect. Personally as a consumer, when I take natural products, that’s what I look for – the cause and effect. When you go mainstream, people are looking for more science behind the products. As a result, we have to back a lot of our claims with science. It’s not that hard to do. There’s a lot of good science out there that supports natural products.
When you can support natural products with sound science, people are more willing to be patient to see results. When there’s no science, you’re right back to the old days of cause and effect.
What once fueled the industry was fads and trends. This was huge in the 70’s and is essentially how the industry grew and got on the map. There was always some new trend or fad. Liquid protein, the KLB-6 diet, and many others created a pandemonium that had people running to the health stores. Today, people are looking for good science. They are not as accepting of someone just saying “I lost 30 lbs on this diet” People are more jaded now by the outrageous claims and want ‘proof’.
NPI: The company recently changed its corporate name to NOW Health Group. How significant is this?
We felt that, from a corporate perspective, NOW Health Group could more accurately represent the diversity of what we do as a company. It was a decision made to better reflect our mission, which is to empower people to lead healthier lives. We also wanted the name to support a framework for further growth within the natural products industry.
Each part of the NOW organization, whether we’re talking about international, private label, sports, personal care, manufacturing or retail, shares the same commitment to our universal mission of empowering people to live healthy lives.
NPI: NOW Foods has historically exhibited an extraordinarily strong and generous commitment to support of industry groups and working to move the industry forward. How did this commitment come about? Is it likely to alter with this year’s management changes? How much of a commitment does the company have today?
Well, it goes way back to the 1960’s when Elwood Richard, our founder, first got involved in the industry. He and his brother Lou were running Fearn Soya Foods and both were very active in the NNFA. Industry involvement and support was built into the corporate culture right from the beginning -- we’ve always had passion and commitment to this industry, and there’s equally been a sense of mission within this company.
Today, we are very active on many fronts and support most of our industry trade associations. When a response to proposed legislation is needed, we personally roll up our sleeves and get involved in mobilizing public opinion. Whenever it appears that the government is trying to restrict access to peoples’ health freedoms and their ability to choose safe supplements, we mobilize.
When you look at some of what has surfaced over the years, you have to wonder who really has the heart of the consumer in mind. Therefore, we felt that it wasn’t enough to put out good products; we would have to fight the threats against the industry too. When you really believe in what you’re doing, it’s not difficult to fight for it. NOW, consequently, has never been shy when it came to defending these rights.
NPI: With so many groups asking for your help, how do you decide who to support?
It gets down to whether they are aligned with our viewpoint. People take different points of view on issues, so we make sure we are supporting the same side.
One example of a group we have supported for many years is the grassroots organization Citizens for Health, which was instrumental in gathering consumer support in the passage of DSHEA (Dietary Supplement Health and Education Act) in 1994. We are also involved internationally to fight for health freedoms and consumer’s rights to choose safe supplements. For example, we are working with health advocacy groups in Canada and Europe and we sponsor a delegate position at the Codex hearings. We see this effort as critical to our mission as a company and it’s simply the right thing to do.
NPI: What kind of return on investment do you get on industry involvement?
NOW doesn’t measure the success of our advocacy efforts based on ROI. We want to succeed in our mission. When there’s a significant threat against that mission, we have no other option but to respond. It’s just the right thing to do.
We provide support financially as well as by having active players. For many years Jim Roza was our industry representative, and now we have Elwood Richard, Michael Lelah, and Neil Levin all serving on various boards. I used to as well, but now I’m devoted to this position - president. All of us are dedicated to active involvement because that way we can make sure our positions are represented.
NPI: Some of your competitors say that because your prices are lower than many other brands your quality can’t possibly be high, yet your advertising and PR always stress NOW’s commitment to quality. How do you answer those critics?
We openly put our money where our mouth is. We have good quality because we spend more of our resources on quality than we do on advertising and marketing combined. We’re counter-culture in that regard. We want our products to work. They have to deliver the results that consumers expect, and the only way that you can do that is by putting out a quality product.
NOW has a strong science foundation and always has. After all, it was founded by a chemist - El Richard. As we’ve become more successful, we’ve been able to dedicate more dollars towards our quality programs. Over the years, we’ve progressively increased our quality standards, and we’ll continue to build on that. We are committed to GMPs and we are a leader in methods development. Over the last few years, we have won numerous awards that recognize our commitment to quality and science.
NPI: NOW is already very strong in the supplements, food and sports nutrition categories, but you recently acquired a personal care products manufacturing facility, What are your plans for that acquisition and why this category?
The acquisition of the personal care manufacturing facility was done to further support our mission of empowering people to lead healthier lives, specifically in this case by developing better products in the personal care category. Think about it: the biggest organ is our skin and it absorbs everything we put on it. Everyone uses some personal care products, and those products should be healthier ones. Personal care is also a big growth area, but that comes second to our mission.
Our plan all along included expansion into the personal care category, and this acquisition opportunity fit in nicely. It gives us a significant advantage in that we’re able to address some of the well-known, industry-wide concerns that surround quality in the personal care category. Manufacturing in-house affords us the opportunity to work on new ways to produce natural products that are genuinely safe and natural. Experience has taught us that this category has its work cut out for it with respect to preservatives, contamination, and other issues. It costs a lot to do things right, and you’ve got to make a very high commitment to quality. I’m convinced that in order to insure quality you’ve got to do it in-house, and have total control over it.
NPI: NOW was an early adopter of NNFA GMP certification and follows well-defined manufacturing procedures. What measures does NOW take at the supply level to ensure the best product out the other side? What does your organization expect from ingredient suppliers as you consider new product introductions?
All of our ingredient suppliers have to meet very rigid specifications for the products that we sell. Our suppliers are audited and qualified before we will buy from them. We make personal visits and tour their plant. We expect our ingredient suppliers to provide us with the science behind the ingredient - published and unpublished clinical and non-clinical studies. We expect our ingredient suppliers to test every lot that we receive and to provide a complete Certificate of Analysis for each lot.
Everything that comes in is tested. NOW maintains, in house, both a wet lab and an analytical lab with industry leading analytical methods to assure ingredient identity and potency, as well as a microbiology lab to test for contaminants. NOW employs one of the finest teams of product quality experts in the supplements industry. They conduct specialized tests, analyses, and inspections that allow the company to offer superior products that assure quality.
We spend more on analytical testing than most companies do, because we want to ensure quality at the front end, not on the back end. That’s one of the fundamental differences between NOW and other companies. Others are measuring quality based solely on their finished products, and make no mistake, we test our finished products too, but we believe that one of the best ways to ensure quality is to prevent errors from happening by testing on the front end. That’s why we spend so much on quality, because we do a lot of front end testing – research and development, ingredient tests, analytical methods, making sure that they meet all of the standards for identity, potency, stability, safety, etc. We examine all of this before we manufacture a single product.
NPI: There is some controversy within the industry regarding the importance of ingredient quality. With all that testing, what have you found?
Scary things, like we tested 20 ingredients suppliers in one category of products and 19 failed our specs. The scary thing is those 19 other companies we judged not good enough are selling to other people in our industry and, as a consumer, that bothers me. When you see something like that you wonder “what manufacturer is buying that stuff?” We see this kind of thing all of the time. The NOW staff and my family personally use the products NOW sells so we aren’t going to accept anything we would not take ourselves. As a retailer, I always saw myself as a gatekeeper for quality, and I feel the same way as a manufacturer.
NPI: You are the first non-Richard family member to head NOW Foods. Has this been challenging? How will you measure your success?
I’ve been in this company for 31 years. I’ve been part of the leadership team here for over 30 years. So even though I’m not a family member, it’s not like I’m the new kid on the block. We’ve worked well together through the lean years and the good times. We’ve all really grown up together, which has made it a seamless transition.
In my mind, my success will be measured not only by our ability to accomplish our mission, but how we go about accomplishing it. We are a very principled organization, with core values and beliefs that we hold to be very important in maintaining the culture at NOW and making NOW a great place to work.
Really, I love what I do because I feel like we are making a difference. The entire team really is on a mission and when you have a sense of that it makes work enjoyable. I get pumped seeing people improve the quality of their lives, like with new people we hire. We get them to shop at our retail stores because they get a 30% discount and when they come back and start sharing how they have lowered their cholesterol or lost 20 lbs., that feels wonderful. It drives us as a company and drives me to come to work every day. The NOW mission integrates into everything I believe. My wife and I raised our 5 kids on natural foods, and my wife is an industry veteran and organic chef. If she sees something in our stores that she objects to, I hear about it.
NPI: What will you do to ensure NOW remains in an influential industry position?
One of the things we’re definitely going to do is stay focused. We believe that by doing the right thing, and by satisfying consumer needs and by continuing to produce high quality, safe supplements while empowering people to lead healthier lives, we will continue to be influential. We’re going to be satisfying a tremendous consumer need. Not only that, we’re going to keep doing it the right way.
We will continue to be visible, because we will continue to support the core of the industry – the health food retailer. We’ve always supported them, because they’ve always been at the front line. It’s all about education and the personal relationship with the customer, and that’s why we will continue to support health food retailers.
We will stay involved in industry on boards, committees, work groups, etc. in order to influence our industry as much as we can to stay true to its core values.
NPI:If you had a stage at an industry trade show, what message would you deliver?
The same thing that we’ve always told the industry – we would remind everyone to be true to their calling. If we’re going to be out there in the first place, we need to be out there supporting people, and empowering them to lead healthy lives. I believe that the NOW Foods mission is really in direct alignment with the pioneering efforts of the early health food industry. The reason that this industry has been successful and influential in helping people meet their health needs is because it acted in the best interest of the customer. This industry has always been about helping people.
When you think about it, the most important thing we have during our stay here on earth is our health. When you don’t have your health, you can’t accomplish your goals, you can’t help others, you can’t work, and you certainly can’t succeed in what you’ve been called to do. And that’s why we believe in what we do, because we meet that very fundamental human need: health. That’s what we feel it’s really all about. If we can accomplish that, all of the success and financial benefits will follow. When you’re truly focused on helping people, they’ll recognize that.