Doctor's Best sold to Chinese company, extending trend in industry

By Hank Schultz contact

- Last updated on GMT

“Kingdomway is the largest producers of CoQ10, and Doctor’s Best is the leading Internet seller. So it’s a natural strategic vertical integration play there" - Scott Steinford, the CoQ10 Association
“Kingdomway is the largest producers of CoQ10, and Doctor’s Best is the leading Internet seller. So it’s a natural strategic vertical integration play there" - Scott Steinford, the CoQ10 Association

Related tags: Dietary supplement industry, Dietary supplement

The Doctor’s Best brand of supplements has been sold to a major Chinese ingredient manufacturer, which is part of a trend in the industry, one observer said.

Doctor’s Best was sold by its owners, private equity firm North Castle Partners and its co-investors, to Xiamen Kingdomway Group Co. As with other deals engineered by the firm, details were not disclosed.

North Castle Partners has a history of investing in the dietary supplement industry and most recently made a growth investment in Marina del Ray-based SmartyPants Vitamins​, with CircleUp Growth Fund as a co-investor. That deal represented North Castle’s eighth investment in the nutritional supplements industry. 

“With nearly two decades of experience in the Healthy, Active and Sustainable Living market, our extensive network of relationships in this industry, coupled with our experience in and knowledge of the category, provided insights that we believe helped Doctor's Best develop into a strategically important part of Kingdomway's future,” ​said Alison Minter, managing director of North Castle Partners.

Long term relationship

Doctor’s Best had a relationship with Kingdomway that preceded the sale. Doctor’s Best sells a lot of CoQ10, and Kingdomway makes a lot of it.

“Kingdomway is the largest producers of CoQ10, and Doctor’s Best is the leading Internet seller. So it’s a natural strategic vertical integration play there. The supply piece was the genesis of the relationship, and from there Kingdomway has become more aggressive in the marketplace in creating a vertical integration platform,”​ Scott Steinford, president of the CoQ10 Association told NutraIngredients-USA.

Steinford said the deal mirrors a trend in the dietary supplement industry in which Chinese companies buy up US-based manufacturers and finished goods brands. It helps those companies position products as “made in USA” when they sell them in mainland China and elsewhere. What’s unusual about this deal was that Kingdomway was willing to be seen making the move, he said.

“It’s hard to say just how many of these deals have taken place because the investors haven’t always been transparent. One deal, for example, was from a company that claimed it was from New Zealand but it was backed by money from China. Kingdomway has been the most transparent of any of the investors in these sales,” ​Steinford said.

Steinford said that cloak of secrecy about who owns the business and where the various parts of it are located could potentially be a problem for the industry down the road as more pressure comes to bear from industry critics on questions of supply chain management.  

“I’ve been to Kingdomway, I’ve been to ZMC and a number of other manufacturing plants in China that are as good or better than many in the US or other parts of the world. Just because ingredients come from China does not necessarily mean they are bad but there needs to be transparency,” ​Steinford said.

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3 comments

That's a shame.

Posted by Maya Nyx,

Looks like I won't be buying their products anymore.

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Corn in China

Posted by Rich Coulter,

Almost 90% of the total GE corn grown on the planet, is grown in the US. At present, no strains of GE corn are allowed to be commercially produced in China. Any GE corn found in China is there via contamination by USA corn.

Report abuse

M

Posted by C,

Was sad to learn that Doctor's Best teamed up with a Chinese company as we know most GMO vits come from China and their GMO corn. Won't be buying from you anymore

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