Renowned herbal pharmacy in Oakland, CA, grows into Traditional Chinese Medicine empire
In addition to the dried herbs, mushrooms, seeds, and many more typical ingredients found in a traditional Chinese Medicine store, family-run Draline Tong has grown into a purveyor of its own branded finished products (herbal blends in capsules, teas) as well as a raw ingredient supplier for big manufacturers.
For its finished product and ingredient supply operation, the family started operating under the company name Nuherbs Co. in 1986, after many years of wholesale under several different names, the company’s vice president Wilson Lau told us.
“Nuherbs is a third generation family business founded by women and grown from a passion to share Traditional Chinese Medicine with the world,” he said.
His grandmother, Dr. Bing Yin Lee, is known as one of the first female graduates in medicine from the Chinese Medical Institute of Shanghai, now known as the Shanghai University of Traditional Chinese Medicine.
She moved to the Bay Area in 1974, and to assure a steady supply of quality Chinese herbs to serve the Chinese community, Dr. Lee’s daughter Pat Kwan and her husband Henry Lau opened Draline Tong at the corner of 10th and Webster in 1979.
Market growth in the Traditional Chinese Medicine category
It’s hard to peg the value of the Traditional Chinese Medicine (or TCM) industry because different companies may have different interpretations of what counts as a TCM product. Market research firm IBISWorld estimated that the TCM manufacturing industry was expected to generate $37.4 billion in 2018, up 7.8% in 2017, growing annually by 11% in the period between 2013 to 2018.
A lot of that activity comes from China—the Financial Times reported in 2017 that TCM makes up a third of sales in China’s $117 billion pharmaceutical market, around the same number as IBISWorld’s estimate for global sales of TCM.
Despite different exact numbers, the common denominator is the category’s growth, and this is reflected in Nuherb’s performance, which has been growing in sales at around 30% year-on-year for the last several years, Lau told us.
And it’s not just other TCM brands that are Nuherbs’ clients for its ingredients.
“Our target market since the 1980’s has always been non-Chinese customers. But as a trend, [TC] has been growing stronger and stronger on a yearly basis,” Lau said. He said indicators include the number of non-Chinese that matriculate from acupuncture school, or the diversity of its ingredient supply clients.
“Some of them will use the ingredients to create products based on classic TCM formulas like Xiao Yao Wan, and others are people looking to extract the active constituents in ginseng,” he said, referring to a blend marketed that contains peppermint, licorice, root, and ginger, among other things.
“[Our ingredient buyers] vary from food manufacturers that use goji in their bars, to someone using Schisandra for their teas, to someone using the herbs in capsules.”
The Menghe School
For millennia, the Chinese civilization placed importance in scholarly activity. Hence, the recipes and traditions of TCM, though diverse, are well-documented.
Dr. Lee, Lau’s grandmother, followed what is known as the Menghe School of TCM.
As noted in Currents of Tradition in Chinese Medicine by University of Westminster professor of East Asian Medicines Volker Scheid, a textbook used by most acupuncture and TCM curricula, this school of thought was created by a man named Fei Shangyou during the later stages of the Ming dynasty (around 1626). The school is named after the village of Menghe, in Jiangsu province, where Fei Shangyou settled withi his family.
“According to family legend, he abandoned his career as a scholar and began working as a physician. In doing so, he founded a medical lineage that continues to the present day,” Lau said.
The school of thought is what informs Nuherbs’ product development for its proprietary brand of finished products.
According to Lau, the Menghe tradition “is super reliant on high quality herbs because the formulas are based on low-dosages of the herbs; if you used anything less than superior herbs, you would get zero results.”
“So our drive for quality is not just based on our desire for quality, but also because our herbal lineage demands it,” he said.
Dealing with the stigma surrounding TCM
The TCM category has come under scrutiny from regulators and the public, ranging from the lack of clinical trials conducted according to Western pharmaceutical standards to shady players adulterating the content of products they sell as TCM.
“A lot of the stigma and bad press surrounding TCM is stemming from people that are selling illegal products or products that don’t comply with the US cGMP’s and international safety standards,” Lau said.
“For example, some cold supplements also contain drugs for colds; this combination type product is legal in China, but totally illegal in the US. When an uneducated importer brings an illegal product in the US, it tarnishes the reputation of TCM, and everyone in the herbal supplements industry,” he added.
“There has been some bad press about TCM products containing levels of heavy metals or pesticides above allowable levels. Those are easily identifiable if products are properly tested, which is one reason we do such extensive testing on our products.”
For Nuherbs, a clearly defined and robust identity program is essential for the TCM space.
“I think when people refer to the 'herbal space', they are really referring to herbal powders and extracts, where it is almost impossible to the identify the powder or extract without some type of chemical testing,” he explained.
Knowing the plant from the seed
To solve this problem, Nuherbs builds close relationships with its raw material suppliers, which means its identification starts at the plant level.
“We see the plant in all stages from seed to flower to harvest. We can identify organoleptically and at a macroscopic level with certainty, if it’s the proper herb. We then transform that harvested herb into powder, extract, tea bag cut, or dried herb,” he said.
“Based on where we sit on the supply chain, we have the benefit of starting with the source material. However, that does not mean we do not use other identification methods such as chemical assays, UPLC, HPTLC, and TLC to further confirm identity and potency – we do. We also test for pesticides and heavy metals.”
Lau believes the future is bright for TCM, especially as consumers and health care practitioners move away from a one-size-fits-all approach and back to personalized solutions.
“Although I personally prefer making and drinking herbal teas, that isn’t really realistic for most people in today’s modern mobile lifestyle,” he said.
“I think the future of TCM involves easier and more convenient delivery formats, and the ability to deliver consistent results by creating repeatable solutions utilizing modern technology.”
Additional reporting by Douglas Yu