“We’re very optimistic about the market for dietary supplements. That gives us some significant critical mass, and we have the ability to grow with some larger customers,” Columbia Nutritional CEO Kevin Unger told NutraIngredients-USA.
“We have grown because we are ultra responsive and proactive with our customers,” he said.
Unger and Ned Becker, head of business development, said the new capabilities that the PNI acquisition adds means that the company can now service brands’ need to constantly have new products in the pipeline. Unger noted that the combined company now has access to more than 4,000 formulas on file and has extensive in-house R&D capabilities.
“Growing brands are always looking for new ideas and concepts to refresh and update their product portfolio. We invest in their growth by helping them to bring new products out of their existing brand line,” Becker said.
Columbia, which is based in Vancouver, WA, was acquired from its original founding team in 2013 by Unger, a 20-year veteran of the medical device and orthopedic implant markets, and a small group of private investors. Unger said his extensive experience in these highly regulated industries gives him a unique understanding of FDA’s cGMP compliance requirements. Under his leadership, Columbia has more than doubled revenues, tripled manufacturing capacity, gained NSF Certification, commercialized over 100 new customer products annually and achieved a strong audit track record with FDA.
“We believe an uncompromised commitment to quality creates great competitive advantage for us and for our customers, and will allow Columbia to be a risk mitigator and growth catalyst for our customers,” Unger said.
Third-party testing, for now
As Columbia grew, Unger said a strategic decision had to be made on the subject of testing, whether to do it with an in-house lab or to form relationships with trusted third-party lab partners. Columbia chose to go the latter route, but Unger said the company may be close to reversing that decision.
“Peer pressure in the industry it seemed to be that that was what people were doing, building their own labs. But from our point of view, you have to be all in on building a lab, hiring PhD chemists, and developing methods. We decided to place our focus on our competency in manufacturing rather that try to be great at both. We can still get great turnaround times and we are big enough now that our price points are pretty good. But now there are some thoughts that we might want to take that on after all. As demand for testing services rises, some of the turnaround times out there are starting to lag a little bit,” he said.
Focus on regulatory compliance
Unger said in addition to R&D help, Columbia takes an intensive look at a customer’s proposed labels to try to insure regulatory compliance. The range of regulatory understanding on the part of brand holders runs the gamut, Unger said, and stands as a striking contrast to his previous career in the medical devices field.
“I spent about 20 years in orthopedic spinal implants, so I have a great appreciation for and understanding of regulations. In that industry there is zero tolerance for errors or for finding the gray area and trying to land there. We feel it is our responsibility to remove frisk from our customers. We want to give our customers the ability to focus on sales, marketing and building a brand, so with every purchase order, we request a proof of their label, so we can provide feedback. We are not just a contract manufacturer but can act as something of a turnkey regulatory solution,” Unger said.
But Unger said these value added services can make it difficult to compete strictly on price, as many contract manufacturers do. Regulatory competency, R&D help and the like doesn’t come free.
“I wouldn’t say we are the highest cost company out there, but we aren’t the cheapest. It can get difficult for us to compete when a customer is only concerned with price because there are costs associated with a regulatory department, with a quality department, with label review,” Unger said.
Not all business is good business
And Unger said there is some business that is really not worth competing for anyway. When customers want something done more cheaply that it realistically can be done, those kind of contracts are better left to the kind of contract manufacturers willing to put out products with ingredients that are relatively speaking so inexpensive that their quality and veracity has to be viewed with suspicion.
“We walk away from business probably every month. When you are being asked to do something that is not possible, that might be a leading indicator of what that relationship is going to look like long term. Not all business is worth having,” Unger said.