Wednesday, November 15, 2006

Las Vegas, Supply Side West & Protein Dreams

Las Vegas. Late October. Out of baggage claim and there's the infamous and unbearably long line for a taxi cab. Waiting in an air-conditioned shuttle while folks filled the seats, however slowly, struck me as a better idea.

Why Vegas when it's one of my least favorite destinations? It's where they hold the big shows for the supplement industry, with Supply Side West being where you can meet new suppliers with all the latest offerings in raw materials and manufacturing processes.

I was pitched everything from inulin (a kind of fiber, often derived from chicory roots, and also often the cause of allergic reactions) to Tibetan goji berries (eh, I prefer dried cranberries personally) to modified tapioca starch for gluten-free baking (I liked the chocolate chip cookie sample and quietly wondered if we have enough Co-op members interested in gluten-free products).

The weirdest thing was walking on to the show floor and seeing a prominent Krispy Kreme cart, a man in a suit worthy of IBMers handing out ice-cream confections, and another couple of guys in much worse suits handing out white cake with that icky powdered sugar frosting. The humor was lost on most folks, who eagerly grabbed the goodies and passed business cards while wiping frosting from their lips.

I guarded my business cards like they were a rare and very valuable currency, and unceremoniously declined to take the slick brochures sales folks with aching feet and frozen smiles tried to push my way. I was on a mission and didn't want to get bogged down with a heavy tote bag of stuff I would just have to haul to the recycling center.

The show floor was not so busy on Friday.I met an Indian supplier for organic and vegetarian fed spirulina. The company boasted an alphabet soup of certifications (USDA NOP, USP, HACCP, etc.). I talked to a company that specializes in flavorings -- masking the odd tastes of herbs and vitamins in consumer blends.

I chatted with a dairy products manufacturer, who predicted that US dairy ingredients (whey included) will go up in price due to weather patterns this year.

Their rep talked about heavy rains and flooding in the Northeast (farms in Vermont were in declared "disaster areas") and heat waves in California as well as the east (Vermont and Massachusetts milking herds were hard hit with scorching temps).

Apparently, once a cow is heat stressed, milk production can drop 10-20% and the recovery of milk production due to heat stress "takes a long time."
Who knew?
Next stop? I made an effort to talk to a major manufacturer of protein powder drinks. Good discussion. The sales rep seemed glad to have someone who was looking for more than freebies at his booth.

And, you're possibly wondering, what does this all have to do with the Co-op?

I'm working on a protein powder formula, one that will have a raft of antioxidants and anti-inflammatory components, along with vitamins and minerals for those folks who: (a) would never take the time to open multiple bottles and take a handful of pills each day or (b) actually can't swallow all those pills.

I met with my consultants (two naturopathic doctors who work full-time in regulatory and formulatory activities), scrubbed the list of ingredients, talked to suppliers, and revised the list again. After talking to scientific advisers, I scrapped the whey protein for a rice protein (my bias all along), since rice protein is more gentle on the system and still provides a full protein.

It's not an overnight process to design a new product, with a different underlying manufacturing process. I can say that my trip to Las Vegas was quite useful, moved my "system protein" project along, and was blessedly short.

More soon!

Tuesday, November 14, 2006

Let's get acquainted

The Co-op and our far-flung members have been a major part of my world for five years. Here's a little history on Our Health Co-op for the newbie and a refresher for the old-timers from the Co-op.
2002: Year one was all about transition after my brother, Stephen, and I purchased the company from the original founder, who happened to be our father (a rascal of an entrepreneur who swore he was retiring and would be staying out of mischief for good). While we maintained family relations, we kept our business strictly separate.

We transitioned to a new identity, with more respectable writing (banishing hyperbole and, let's just say, "provocative" language). Scaling the business was next (we rolled out eight new products, including now-popular staples like Alpha Lipoic Acid and Eye Protection, in fall 2002).

Oh yeah, as someone who made a living in marketing for years, I did a survey about the quirky branding (an irreverent "kat" who writes a health newsletter). Within 24 hours, thousands had responded to the questions about the Co-op's mascot, and overwhelmingly they said, "Keep the kat!" So I was wrong about the corny brand being the founder's ridiculous fancy.
2003: Year two was all about quality, narrowing down our suppliers to the trusted few and wrestling with the sorry state of independent testing labs around the country (let's save that rant for another post though).

At the end of the year, Stephen and I assessed our market, after repeatedly hearing (over and over and over again) that our prices were too low to signify quality. We were investing heavily in testing as well as raw materials and quality manufacturing. Was it time to change our pricing to improve trust in our brand? In books on influence and persuasion, experts say that in the jam-packed war of competing messages, price is still short-hand for quality.

We looked at each other and agreed we had to keep our prices low and work to build our reputation for quality in other ways. We committed to serving our sometimes fussy fixed-income seniors, who haggled on every dollar of shipping and carefully placed one modest order a month (after Social Security checks arrived in the middle of the month).

2004: Year three was about increasing the transparency into the company. With an Internet company, you worry about millions of folks having your personal email address and contact info, but with a community like ours, we had to be visible and accessible, pretty much 24/7.
I remember many long phone calls at odd hours with members who wanted to know what we were really made of, why they should do business with us with so many choices on the Internet, etc. I made some good friends that way (and fielded the darnedest questions, like, no kidding, "what's your astrological sign?" and "why on earth do you live in Utah?"). After giving my birth date and birth time to one member, I received more than 30 pages of fascinating astrological charting a week later. I swear, it's never dull with our community and I wouldn't have it any other way.

2005: Year four was about a major web site upgrade (new identity, new features, you know, the normal stuff), a big customer survey, a member contest to create Co-op magnets (I know, the corny ones won two of three spots and the cute dog picture was nixed handily). Long live the kat, I suppose!

2006: Year five has been all about getting into our new warehouse and preparing for more space for new inventory. Construction was delayed more often than traffic in Boston and we wondered if the permits would ever come through. And, then there was this little problem with the air conditioning contractor (don't ask).

But, finally, we made it into the new warehouse (we bought it -- no getting priced out of the hot South Florida real estate market).

Teri's husband, Harley (a bona fide This Old House star and veteran contractor himself), contributed tons of recycled materials (shelving from an art gallery, cabinets from a Palm Beach home, etc.). We did it on the cheap and couldn't be happier now that the wait is over. So, yes, new products are finally back on track.

I've been working on another project, introducing a special product line called Cell Nutritionals for integrative healthcare practitioners (physicians, nutritionists, etc.).

Lots of things still in the planning phase, so if you have marketing savvy, are an integrative practitioner, or are a member who wants to act as a serious referral agent and want to get in on the action, let's talk!