FoodState, based in Derry, NH, has been a leader in the manufacture of whole food supplements. MegaFood is a well known brand in the natural channel, whereas Innate Response is sold into the practitioner channel.
Under the more than three years that 2x Partners owned FoodState in concert with another investor, The Riverside Company, the company grew significantly. According to 2X Partners, FoodState nearly doubled in size in those three years through investments in manufacturing infrastructure and sales and marketing.
“We helped recruit significant senior management talent largely from our network and partnered actively with the team,” said Andrew Whitman, Managing Partner at 2x Partners.
Retaining the mission
And while private equity ownership is sometimes disparaged as a situation in which equity partners are looking for a quick return perhaps at the expense of the core missions and values of the companies they acquire, FoodState has continued to be a leading voice within the natural products business on issues of sustainability, transparency and labeling.
“I will truly miss working with 2x Partners,” said Robert Craven, CEO at FoodState. “They were thoughtful & creative partners. Without their support and industry expertise I am certain we would not have had the success we are now enjoying. Joining Pharmavite allows us to continue to fulfill our mission of improving lives by creating high-quality supplements made with farm fresh whole foods right in our New Hampshire facilities. FoodState will maintain its existing executive and organization structure and will operate very much as it has been, reporting to Pharmavite through a newly formed Board of Directors. We're excited by the opportunity to grow with a company that shares our values."
As an example of FoodState’s continued leadership, under 2X Partners’ ownership, FoodState has been a vocal proponent (and financial contributor) in the fight to have mandatory labeling of genetically modified ingredients.
“The majority of our core products are non GMO Project verified. Pretty much anything that can be verified is verified,” said Bethany Davis, director of regulatory affairs at FoodState. “More than 50 of our products are verified.”
Davis said the decision to move toward a non GMO positioning was taken both because it aligned with the company’s core mission and in response to the market.
“We have seen the value in third party certifications,” Davis told NutraIngredients-USA. “We got specific requests from consumers and retailers. We have seen how third party certifications offer a halo of quality.”
And the company has been a leader in the fight for increasing transparency and accountability within the industry. When he spoke with NutraIngredients-USA earlier this year, FoodState CEO Robert Craven had this to say:
“These companies who make money now to pay the fines later” – account for about 5% of this industry, but they’re getting a disproportionately large amount of attention. Such companies may be non-compliant with GMPs or are producing tainted or adulterated products masquerading as dietary supplements.
Craven said that trade associations like CRN and UNPA are doing what they can, but said that any change is not going to come from DC. “Meaningful change has to come from good companies taking more of a leadership position,” he said. “We tell our consumers where our products come from and we’re sharing Certificates of Analysis all the time. Transparency with a big T is the solution to many of the industry’s woes.”
Pharmavite is one of the nation’s largest dietary supplement manufacturers. The company, based in Mission Hills, CA, manufactures dietary supplements and foods under the Nature Made and Soyjoy brand names. Pharmavite has operated as a subsidiary of Japan-based Otsuka Pharmaceutical since 1989. Ostuka reported $12.6 billion in sales in its fiscal year 2014, which ended on March 31st.