Building A $6M/Year Supplement Manufacturing Business
Hello! Who are you and what business did you start?
My name is Donald Passwaters and I am the CEO of EC Nutrition. With over 40 years of experience in the supplement manufacturing industry, EC Nutrition is a manufacturer of nutraceuticals for private label and contract manufacturing purposes. In addition to our manufacturing services, we also own several brands including Earth's Creation, EC Sports, and Herbacure.
We take pride in offering unique products such as OptiNOs and Brain Boost. OptiNOs is a clinically studied ingredient that promotes muscle building by activating mTOR and protein synthesis. Brain Boost, on the other hand, is a nootropic ready-to-mix drink that contains over 18 different ingredients for brain health, including the only form of de-bitter bacopa available on the market.
We primarily sell these products online, catering to a diverse range of users, including individuals over 50 and college students.
When I started EC Nutrition over 20 years ago, we had no buildings and no equipment. Today, we operate out of a 100,000-square-foot facility and have over 20 different nutritional supplement manufacturing machines. We are committed to providing our customers with the highest quality products and services, and we look forward to continuing to grow and innovate in the industry.
What's your backstory and how did you come up with the idea?
Growing up in a poor neighborhood in Little Havana, I never imagined that I would one day run a multimillion-dollar business. However, my family and I have been blessed, and we give all the credit to God for helping us get to where we are today.
My experience with nutraceutical manufacturing began when I was only 17 and enrolled in a work-school program. I worked at a company called FEDCO, where my job was to clean the warehouse. I stayed with FEDCO for many years, until they let me go when I was in my forties. This was a difficult time for me, as I had a wife, four children, and no source of income.
When your business is fueled by your passion, you are more likely to persevere through setbacks, adapt to changes, and find joy and fulfillment in the work you do.
However, the skills and knowledge I gained at FEDCO proved invaluable in starting my own business, EC Nutrition. Initially, I had two other partners, but they eventually left the company, and one even embezzled $100,000. Despite these setbacks, I decided to continue with EC Nutrition, which turned out to be the right decision.
A major turning point for the company was when I placed an advertisement at a health show in Dubai, and a customer picked up our flier. This led to sales of over half a million dollars that year and allowed us to expand into other countries. After eight years in business, we acquired another company called Herbacure, which included manufacturing equipment and the brand name.
We moved the business to a 10,000 sq. foot facility and my son started working on a website to promote our private label and contract manufacturing services. Through the use of SEO and Google Ads, we were able to attract more customers both domestically and internationally.
Take us through the process of building the first version of your product.
When EC Nutrition first began, we solely operated as a distributor of supplements, and we outsourced the manufacturing process to other companies. However, upon acquiring Herbacure, we obtained our own assembly line and encapsulation machine.
The acquisition of Herbacure was $250,000; it included the brand Herbacure a packaging line, and an encapsulation machine. This acquisition was useful because it allowed us to make our products and in about 5 years the sales of the brand Herbacure paid for the acquisition.
To ease into the transition of becoming a private-label supplement manufacturer, we focused on producing basic items like vitamin C and ginkgo Biloba. This approach enabled us to minimize manufacturing issues.
The conception of our brand Earth’s Creation emerged from the minds of both my wife and me. We aimed for a name that would encompass a holistic essence and resonate with a natural feel. It took us several weeks of intense brainstorming to unveil this carefully chosen name.
As time progressed, our brand identity underwent transformations. Initially, we concentrated on exporting our products, highlighting their origin in the USA. Yet, as the years passed, our brand flourished within the United States. Our new identity revolves around being a family-owned enterprise that conducts its business affairs with unwavering integrity.
The initial challenges we faced were twofold: initiating our endeavor and establishing relationships with significant clients. Remarkably, some of those early partnerships endure to this day, a testament to the lasting connections we forged.
As we began manufacturing our supplements, we had to adhere to strict standard operating procedures (SOPs) and undergo annual inspections from the FDA and GMP. These measures were crucial in ensuring that our private-label supplements met regulatory standards and were of the highest quality for our customers.
Describe the process of launching the business.
When we launched EC Nutrition, our initial goal was to establish a strong presence in South Florida and South America. We collaborated with the US Commerce Office to secure contacts in South America and navigate the import process into different countries.
To minimize debt, we were strategic with our borrowing and only obtained loans for the acquisition of Herbacure and the relocation of our facility to South Carolina, including the purchase of our current building.
Initially, EC Nutrition did not have a website until my eldest son created one in 2014. Upon departing from his cherished role in graphic design, my son became an integral part of our family business.
Initially, he ventured into the realm of graphic design but eventually transitioned to focus on marketing and sales. He independently acquired fundamental skills in website editing, design, and the management of Google ads.
The website proved to be instrumental in attracting new customers from the Middle East, Africa, and domestically. It can be challenging to find trustworthy employees, but focusing on integrity and honor as a company can attract such individuals.
Our digital marketing strategy involved leveraging Google Ads for private-label supplements and optimizing our SEO efforts. Over time, we were able to rank higher on Google for relevant industry keywords. Today, we have multiple websites for our own branded products, as well as a website dedicated to private labeling and contract manufacturing supplements.
Since launch, what has worked to attract and retain customers?
One of the key drivers of EC Nutrition growth has been our focused approach to exporting nutritional supplements. This niche market was a natural fit for us, given my prior experience in foreign markets. Our collaboration with the US Commerce Office and targeted ads in these niche markets helped us acquire new customers and expand our business.
In particular, our use of Google ads for contract manufacturing and private-label services has been highly successful. By running ads in different countries, we were able to leverage our exporting expertise and provide the necessary documentation for our clients.
Our original Earth's Creation website still receives around 2,000 visits per month and has over 600 backlinks. However, our newer website, EC Nutrition, receives around 600 visits per month, including those generated by our Google ads.
In addition, our EC Sports brand has found success in e-commerce by targeting our competitors and creating engaging Facebook ads that resonate with consumers. Ultimately, to maintain customer loyalty, it's essential to prioritize the delivery of top-quality products and exceptional service.
How are you doing today and what does the future look like?
EC Nutrition is a thriving enterprise that employs over 50 individuals in manufacturing, office administration, and warehousing. Moreover, we are constantly seeking to enhance our efficiency by investing in state-of-the-art machinery and laboratory equipment to ensure top-notch quality control.
In the previous year, we spent around $200,000 to expand our facility by constructing additional production rooms, effectively doubling its size. Our future investments will center heavily on automation, with plans to incorporate robotic arms to expedite bottle packaging and streamline material transferring systems.
Over the past six years, EC Nutrition has experienced an astounding 400% growth in revenue, and we anticipate another 400% increase over the next five years. To expand our reach, we will be introducing our products to new markets in 2023, including Canada, Saudi Arabia, and India.
Additionally, we are excited to launch new products that target brain health and sports nutrition, broadening our product offerings to meet the diverse needs of our customers.
Through starting the business, have you learned anything particularly helpful or advantageous?
As the founder of EC Nutrition, I've learned some valuable lessons over the years, such as the importance of cultivating strong business relationships, hiring trustworthy personnel, and automating production processes. Strong relationships with vendors are critical since raw materials are essential in manufacturing products. I have found that building trust with vendors is possible by making prompt payments. Likewise, establishing solid relationships with distributors is also vital, which entails having mutual trust and working closely together, ensuring that products are in good hands.
Having a team of reliable personnel is also crucial in running a business. By having trustworthy employees, there is no need for micromanagement, and the focus can shift to business growth and development. It can be challenging to find trustworthy employees, but focusing on integrity and honor as a company can attract such individuals.
Finally, I learned that efficiency through automation pays off significantly. In my case, some machines have boosted productivity by up to 500%, reducing lead time and labor costs. Even if the industry is not manufacturing, there are ways to automate workflow processes to increase productivity. With limited time and resources, automating processes can allow your company to operate more efficiently.
What platform/tools do you use for your business?
EC Nutrition has benefited greatly from several tools we use, such as QuickBooks, Fishbowl, Shopify, and ShipStation. Since the inception of EC Nutrition, we have relied on QuickBooks to manage our finances and inventory. However, in August, we migrated our inventory management and manufacturing to Fishbowl because it provides a more advanced system for both areas.
Fishbowl enables us to locate and track raw materials and finished goods while giving us better control over manufacturing work orders to ensure adequate raw materials for all outstanding orders.
For all our e-commerce sales, we use Shopify and ShipStation. Shopify is an exceptional website builder for selling products online, and orders from Shopify integrate directly with Fishbowl. Additionally, ShipStation has enabled us to obtain better prices for e-commerce orders, providing more value to our customers.
What have been the most influential books, podcasts, or other resources?
John Maxwell's teachings have had a profound impact on my business and leadership style. His books, speeches, and podcasts have been a source of inspiration, motivation, and practical guidance in my pursuit of business success. Through his teachings, I have learned the importance of developing and empowering my team, cultivating a culture of growth and learning, and leading with integrity and purpose.
Maxwell's emphasis on servant leadership has influenced me to prioritize the needs of my team and customers, leading to better outcomes for the business. His teachings have also instilled in me the belief that failure is not final, but a stepping stone to success. Overall, John Maxwell's ideas and teachings have inspired me to become a better leader, and my business has benefited tremendously from his insights.
Additionally, the Bible has taught me the importance of humility, perseverance, and trust in God's plan for my life and business. The biblical principle of sowing and reaping has also been instrumental in shaping my perspective on giving back to the community, investing in the growth of my team, and building a business that adds value to society.
Advice for other entrepreneurs who want to get started or are just starting out?
My advice for aspiring entrepreneurs is to make sure that their business is driven by their passion. Starting a business requires dedication, hard work, and long hours, and having a passion for what you do can help sustain your motivation and enthusiasm during challenging times.
When your business is fueled by your passion, you are more likely to persevere through setbacks, adapt to changes, and find joy and fulfillment in the work you do. Your passion will also be reflected in the quality of your product or service, which can help differentiate you from competitors and attract loyal customers.
Another crucial piece of advice for entrepreneurs is to try to avoid taking on unnecessary debt. Debt can be a major source of stress and risk for any business, especially in the early stages when cash flow is uncertain. While it can be tempting to seek out loans or other forms of financing to get your business off the ground, it's important to be cautious and realistic about your financial needs and your ability to repay any debts.
Instead, focus on developing a solid business plan, identifying your target market, and building a sustainable revenue stream that can support your growth over time. By keeping your expenses low and reinvesting your profits wisely, you can build a successful and financially stable business without taking on excessive debt.
Are you looking to hire for certain positions right now?
EC Nutrition is seeking lab interns who are interested in a potential position with our company after completing their studies. Our year-round part-time internship opportunities are available for biology and chemistry students.
The program offers the chance to work with our quality control team on product testing or support research and development for new formulations. Although unpaid, this internship offers valuable hands-on experience and the possibility of a future job opportunity. If you are interested in applying, please contact us at the provided link.
Where can we go to learn more?
If you have any questions or comments, drop a comment below!
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