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Experience as a customer helps CEO grow contract manufacturing company

By Hank Schultz , 30-May-2014

For a contract manufacturer, formulation expertise, a good story on GMP compliance and robust relationships with ingredient suppliers are all good and necessary things to have.  But none of it replaces good, old service to the customer, said Jonathan Greenhut, CEO of Nutricap Labs.

Greenhut founded his company with a partner in Long Island in 2005 and was recently honored by a local business publication as one of its Outstanding CEOs, based on criteria that included leadership skills, integrity and financial performance. Since its founding, Greenhut has grown the company to a point where it reported more than $30 million in revenues for the past three years.

Greenhut said his approach to contract manufacturing was informed by his experience starting a sales and marketing company.

“My background is not in contract manufacturing, but in sales and marketing,” Greenhut told NutraIngredients-USA. “I started a company called New Vitality, grew it and sold it in 2011.”

New Vitality markets a diverisfied line of dietary supplments, and in that guise Greenhut had a lot of experience in interacting with the general run of contract manufacturers. He came away believing that he could do it better.

“I had my operations manager (at New Vitality) who said he had people coming to him asking for their products to be contracted.  So we leveraged the infrastructure we had and I started Nutricap Labs with him as a partner in 2005,” he said. (Greenhut has since bought his partner out.)

Marketing neophytes

“A lot of the contract manufacturing industry is made up of companies that were devoted to operations. They don’t know much about sales or marketing.  Sometimes you’d call them and they wouldn’t even call you back,” Greenhut said.

“We always want to make sure we are communicating with the customer appropriately,” he said. “We are really focused on getting the job done every step of the way and keeping the customer informed at every step.”

Greenhut said taking the customer’s point of view is one of the things that informs how his company communicates with them. Production delays might be unavoidable in some cases, but springing those delays on an unsuspecting customer is something that can always be avoided, he said.

“I’ve seen what goes on,” Greenhut said. “I’ve seen contractors who say it will take eight or ten weeks to manufacture a product. And then you get to the end of that time and they tell you they haven’t started because they have been waiting for a certain ingredient.

“It hurts the customer now and it hurts them in the future. They may have retailers who are waiting for that product and who can’t get it. And it damages the trust those retailers might have in that customer in the future. I am able to land customers because I have been through what they go through,” he said.

Branded ingredients fan

Greenhut said that while he has grown his company rapidly with a devoted sales staff making cold calls and being highly active on social media platforms, that doesn’t mean he has neglected the operations side of the business.  Greenhut said he is fully on board with FDA’s current emphasis on GMP enforcement.

“This business is becoming highly regulated and that’s a good thing.  It’s a good thing that people can trust that what’s listed on the label is what’s in the bottle,” he said.

Greenhut said there is no substitute for testing incoming ingredients to verify their identity and potency.  And, while he is open to seeking out lower cost sources that can help meet customers’ cost expectations while still meeting specifications, he tries to steer them toward higher-shelf options.

“I’m a huge fan of branded ingredients,” Greenhut said. “A lot of time we have customers who are passionate about their particular product or formula.  But if we are asked to give them advice, we will guide them to those ingredients that have clinical studies behind them.

“If someone is willing to go through the work to prove the effectiveness of their ingrdient, then that is the one to use,” he said.

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