NBTY Exec: “We are 1,000% supportive of any effort that drives quality in the industry”

Speaking during a media event hosted by NBTY in New York City this week, Brian Wynne, President of NBTY Americas, said that the landscape for the company is incredibly bright, with a new leadership team in place, natural tailwinds in the wellness sector, and ‘fabulous’ brands all helping NBTY evolve into a global wellness company.

And ongoing scrutiny of the industry by Attorneys General, Senators, and the mainstream media are an opportunity because consumers deserve to have confidence in the quality of the products they purchase.

“We are 1,000% supportive of any effort that drives quality in the industry,” ​he said. “We intend to be at the highest level of quality. We think this scrutiny will be advantageous for us.”​

Quality and authenticity were two of the most used words during the three hour event, and delivering on these goals is a new but very experienced management team.

Steve Callihane replaced Jeff Nagel as CEO in September 2014, coming to NBTY from Coca-Cola. Wynne and Andrew Archambault (chief customer officer) followed from Coca-Cola about 12 months ago. André Branch joined as chief marketing officer about eight months ago with a resume that includes the likes of L’Oreal, Diageo, and Kraft. Finally, Dr Matthew Roberts had the distinction of becoming the company’s first ever chief scientific officer when he joined about seven months ago from Abbott Nutrition.

“We’ve put a new management team in place in the last year with top talent from large CPG companies,”​ said Wynne. “And adding to that with the best talent in the industry will be an intense focus of ours in 2016.”​

NBTY Americas​

The company recently reported $3.2 billion in net sales in 2014​, and the Americas account for about $2 billion of that, said Wynne. Industry-wide projections for nutritional supplements put growth at 5-6% per year with the market predicted to hit $52 billion by 2020. “We will be growing faster than the category,”​ he said.

NBTY has announced plans to significantly cut back in both contract manufacturing and private label operations. The contract manufacturing category was no longer strategic, said Wynne, but private label is still an important piece of the NBTY Americas business and the company will remain in this where that is part of a strategic partnership, he added.

“We have backed up in some areas – we have no intention to win in the low-cost, low-quality business. We will not sacrifice quality.”​

Top of the company’s list of five key strategies for 2016 are the brands (“to have differentiated brands that consumers love”). “The branded business is doing fabulous,” ​said Wynne. NBTY brands, which include the likes of Solgar, Nature’s Bounty, Osteo Bi-Flex, Balance Bar, Met-Rx, Ester-C, and Sundown Naturals, are part of the company’s Consumer Products Group, which accounted for 58.6% of its 2015 revenue, with $1.9 billion in net sales.

Despite this success, some brands have low penetration and the company has plans to grow these, said CMO André Branch. “There are lots of opportunities for those brands.”​

“Each brand will play a specific role and there will be little to no overlap,” ​he added. “Creativity is the key – it’s not about out-spending the competitors, it’s about out-creating them. ​

“Brands also need more authenticity and relevance with the consumer. There are many ways for consumers to tune you out so you have to be relevant.” ​

A changing industry​

The nature of the industry will change, added Branch: “Science is much more important, regulations will increase the scrutiny, there will be an effect from healthcare costs and people wanting to reduce those costs, and there is increasing demand for transparency,”​ he said. “It’s about real science and proven quality and that’s where the industry wants to be in 10 years.”​

In addition to appointing Dr Roberts as NBTY’s first CSO, the company has pledged a 60% increase in the innovation budget year-on-year.

“The purpose of science and technology if to drive credible and authentic solutions that make a real difference in consumer wellness,” ​said Dr Roberts. “We’re taking a leadership position with authenticity and transparency.”​

So what does that mean from an R&D perspective? For example, will we see more clinical trials from NBTY? “We will not be pouring $20 million into a clinical trial with 2,000 participants, but we will provide insights with where and how those trials are being done and we will partner when appropriate,” ​he said.

Partnerships are a key focus for Dr Roberts, and he said that there will be significant partnerships announced over the next 12 months. Roberts and his team will also be investing on boosting compliance among consumers.

Significantly, the company formed a Scientific Advisory Council​ earlier this year, with the goal of supporting NBTY’s rise to the next level of industry leadership. The group is chaired by Dr David Katz, founding director of Yale University's Prevention Research Center, and includes other notable names such as Tom Brenna (Cornell University), Martin Floch (Yale University School of Medicine), Gilbert Leveille (Leveille Associates), Diane McKay (Tufts University), David Nieman (Appalachian State University), Aviva Romm (creator of Herbal Medicine for Women), and Susan Mitmesser (Director of Nutrition Research at NBTY).

One area receiving a lot of interest is probiotics, which is experiencing impressive growth numbers as the science deepens, and the company will be launching a probiotic product positioned for heart health in 2016.

“Winning in probiotics is a key target over the next five years,” ​said Dr Roberts.