DNP says sales grow as customers expand
first quarter profit growth, which it claims has been achieved
without profiting from unnecessary price increases for customers.
The privately-held firm, which supplies ingredients to the food, beverage and dietary supplement industries, said that sales for the quarter rose 28 percent from last year. Primary reasons for this growth were the expansion of its customer base, and larger order amounts from existing customers. DNP was unable to provide NutraIngredients-USA.com with more details on the company's results or specific ingredient performance. Prices In a brief press release, the only information provided by DNP focused on how the firm absorbed "smaller fees" rather than pass these on to customers. According to spokesperson Jon Barilone, these fees included repacking and service fees. "A lot of companies find it very easy to raise these as a way to boost profit margins. But we believe these are smaller fees we can keep steady," he told NutraIngredients-USA.com. Barilone was unable to comment on whether the company has raised prices for its ingredients over the past year. However, he did confirm that "our sales prices have been subject to market trends, as with any other ingredient supplier". In addition, the firm's statement comments that overall price increases in the industry "have become unavoidable" as companies struggle to maintain profit margins in the face of higher input costs. According to the company's president, David Ji, although DNP would be "justified in significantly raising its prices", it opted for the 'customer care' card instead. "While no company looking to make a profit can keep price levels exactly the same forever, there are other incentives and benefits we can offer all our customers," he said. "For example, our older customers recognize that we have not increased our repacking and other service fees for over three years." Markets The nutritional supplement market makes up by far the largest portion of DNP's business, with 80 percent of ingredient sales channeled into this category. Ingredients the company supplies to the dietary supplements industry include L-Arginine Alpha Keto Glutarate (AKG), as well as vitamins, minerals and amino acids. Food and beverage ingredients, such as citric acid, flavors and sweeteners, make up a smaller portion of sales, with the company saying it received good response from the recent Expo West show in Anaheim, California.
