Latest / Origin Matters / Why Practitioners Should Demand Scientific Backing - With Biotics Research
Transcript
- Spencer Macintyre: Hey everyone and welcome back to another episode of Origin Matters. Today I'm joined by Paul Vitello, who is the marketing manager at Biotics Research Corporation. And we're going to be discussing why practitioners should demand scientific backing in the omega-3 supplements that they recommend. So welcome on the podcast today, Paul. Thanks for joining me. Paul Vitiello: Course. Thanks for having me, Spencer. Spencer Macintyre: I guess for listeners who might not be that aware of biotics research, maybe you could introduce biotics a little bit better and tell us a little bit more about the types of supplements that you manufacture, who your types of customers are and a little bit more about the company. Paul Vitiello: Yeah, for sure. Biotics Research is a fifty year old family owned and operated nutritional subling company and we focus on the practitioner channel. So that means we sell to licensed healthcare practitioners around the world. We're a global company and and we've been at it for quite a long time. I've been there, over nine years and as their their marketing director and we really strive to educate practitioners on on nutrition and supplementation and and we have a lot of skews in our line. I I think it's over three hundred twenty, three hundred and thirty now. I I don't you know, I lose track. But it's a lot. And you know, even for fish oil we have quite a few. I think we have seven or eight fish oil skews in our line. and biomega one thousand being one of our our our best selling products. And so we're we're we do we're not a fish oil company per se, but we know it's a big part of of of what we do, especially with practitioners. and that's why ORIVO is so important to us is is the origin matters and we need to you know, we need to tell doctors about why we were the first brand to ever use ORIVO and why we still use it. I think it's eight years later. So, you know, there's there's a lot f a lot to discuss. Spencer Macintyre: Mm. Yeah. I was listening to your fifty year podcast on your channel the other day. It was super interesting learning about your your history, how the founders started it, what the sort of reasoning was, and then how you've grown up into having such a large laboratory facility and production facility as well. Paul Vitiello: Yeah. Let me let me speak to that a little bit. Yeah, so we we weren't a spin-off of another company. Actually, what happened was the owner's dad and they so they started the company together. It was their father and all the kids. And when they started it, it was because they found they had a cousin that was really sick and they couldn't get the treatments that they wanted to try to prolong his life in the United States. So they were sending them to Germany. For all sorts of treatments and our current CEO's father was like, Why can't we do this here in the United States? And it was really like the supplement industry didn't really exist back then in the US. It was very few amount of products and not high levels really of anything. And so it was it was a different game. And you know, they started really early and built a a Fantastic brand in in the channel and you know, I'm lucky to be be there for this long, especially. Spencer Macintyre: Mm, yeah, it was a really interesting story and hearing about how they were travelling across to Europe to get the ingredients, then bring them back to the US and then ended up working out different products to be able to do after that first one and things like that. Paul Vitiello: Yeah, it's so much different than a lot of the companies that are out there now that, you know, are started by like a you know, Silicon Valley Spencer Macintyre: V C funding. Paul Vitiello: private equity company, you know, and you know, venture backed and you know, and you see that a lot now. I mean, you see it a lot because the space, you know, I mean, there's a lot of money to be made in the space and people want to take advantage of that, but there's no real true sense, like the company d doesn't have a real vision. Like it was founded because mostly Somebody got into the industry, they see the money that can be made, they go raise a bunch of money, you know, they sell the company five years later, they sell the company another five years later, and it just goes on like that. And a lot of the companies, even the practitioner channel, not all of them, but a lot of them were spin-offs of other practitioner channel channel brands. And, you know, I just think their story is different. I think having manufacturing day one and having a lab day one is very different than a lot of the companies. Mm I I don't really even know any other company in the practitioner channel that started that way where they started as a manufacturer and having a laboratory in a house. I mean, that's really where the rubber meets the road That's the quality is just innately there for biotics. They're just they're they're all about quality. Even when I went there nine years ago, they have the manufacturing and and quality control and and laboratory awareness that they have in those departments is immense. You know, they were just What they needed for me was more, you know, sales and marketing and, you know, and and how to how to grow the business in in a different way. But they already had what it what like the things that I would look for in a company, which is, you know, integrity, great manufacturing, you know, great quality control, you know, and and being in the history, just being around for that long. It's great. Spencer Macintyre: Mm. Well, I guess that's yeah one of the core things that I see with biotics research is that you've got that big commitment to quality and you've built your own lab in house. So compared to lots of other companies that need to have every test done by an out outside lab, so they're sort of maybe trying to save on not not testing as much as you guys would 'cause you've got that capacity in-house, it means it's much easier for you to to do a lot of testing. Paul Vitiello: Yeah, it's still I can tell you. Yeah, we have I think we have over thirty employees in our lab and it's still expensive for us. It's definitely a a big you know it's a big underlying cost to the product. But yeah, we we do so much in process testing, which we wouldn't be allowed to do if we had a send out for third party testing. I think the third party testing thing is a hoax in the industry. I think that of course the companies should do third party testing if they don't have the laboratory capabilities, but What everybody's basically saying in the industry is I'm third party tested, so I'm better than you. And we're like, well, you know, we have an ISO credit lab in-house, which is a third party lab. So basically, when people go to send out to get to get their products test, they could send it to us to test, but we couldn't send it to them. And that's like the difference. Like we could we could be a commercial laboratory. We choose not Spencer Macintyre: Mm. Paul Vitiello: to be. We choose to focus on the supplement industry and not to be not to be selling lab services, but we could. And that's like a like a big thing in that I even can look at say like this, when ISO came into our laboratory, they were like, you know, who's your customers? And we they were so confused, but we were like we're We're no, it's just us. Like we're not we're we're not doing this so that we can sell laboratory services. We're doing it so that we can have better the best quality control in the industry, you know? And that's It it it's like a different framework of a company and and I respect it a lot. I think it's you know, it's it's hard, I think, for other companies to match at. And I think that's why everybody's like third party testing, third party testing, because it's really the next best thing. But you can't do all the testing that we do in process with a third party. That would mean you'd have to stop manufacturing, put everything aside, wait two, three weeks to get a lab test back, continue. I mean, it's just nobody would do that and it's just not being done. And, you know, so just the quality control in-house is is just a huge deal. Spencer Macintyre: And then I guess coming on to you guys Biotics Research being the first ORIVO verified brand in the United States. So thanks for thanks for that. and I guess it's it's interesting, and that's the thing that I want to pick up on today. And I think maybe the the timing is is probably really relevant to talk about why you chose to become verified with ORIVO when it comes to species and origin with the the whole fish oil. Paul Vitiello: Yeah. Spencer Macintyre: supply challenges that happening at the moment. But maybe do you wanna tell us about why you think the verification of species and and origin is important for you guys? Paul Vitiello: Yeah, we so when we were when I went to Biotics that that long ago, I was we're looking at redeveloping our fish oil. So looking at the supply, which we didn't have a buy bad supply before. Our I think our concentration wasn't as great. But you know, I was like, you know, let's look look at this you know, holistically at thirty thousand foot view and and let's make some decisions moving forward. And, you know, we brought in all the suppliers, we talked to everybody. we chose a supplier that we thought had the best story. we chose the supplier because of their location to the fisheries, which are in South America. So our supplier who actually concentrates the oil to a triglyceride is right there on the coast in in Chile, which the fish are caught right there and basically the oil is brought right into the facility it very quickly instead of the transportation time of going on an oil tanker and being shipped to Norway and then processed and It just leaves a lot of time for the Totox levels to go crazy. and for people that don't understand that, it's just basically the freshness of the oil. and we really care about that. That's for us, that's a big thing. We want to have the freshest fish oil in industry. I think that's a big thing for us. We also want to have the single species is really important too, because when you start talking about the authenticity of the oil, and that's why when you get into ORIVO. Because we really cared about the sustainability of the fisheries, the authenticity of what we're saying in our label. And overfishing is certainly a huge problem and That's something that as a community we need to we need to realize that that's happening. Seventy percent of the world's fish oil are caught in South America. And a lot of brands like to claim South American fish oil, but really they're taking oils from everywhere, blending them together and then calling us South American fish oil. And why that matters is these other bodies of water that they're catching from, whether it be Russia, China, Morocco, they are not sustainable. And meaning you're gonna overfish, then we're not gonna have fish oil. So I mean there's a there's a big reason why we we wanna be sustainable. And I think also just the more transparent we can be on our label is obviously the best. And and with fish oil, we believe that it's it's a little bit different than the rest of the vitamin and mineral market when it comes to commodities. I think fish oil has to be handled a little bit more carefully because of the Totox levels and because of the sustainability and and all these other things that we can mention, it's just a little bit different than everything else. So we choose to really put a lot of effort into the transparency, especially when it comes to our omegas, because I think it's the most problematic market. And right now you're gonna start seeing that. So with a fishing season recently being canceled, there's not enough crude oil to meet the demand of all of The supplement companies in the world. It's just people are not gonna be able to get oil. And that's when you start seeing these problems. I think you talked about 2023, and I think it was COVID the last time we had a fish in season that I think it got, I don't know if it got fully canceled, but when we when we were we were just getting a lot of immature fish and they were not producing large yields of oil. So I mean, this is just it's we've seen it before, and adulteration happens, right? Spencer Macintyre: Yeah, absolutely. I'll I'll bring a graph up on the screen for anyone who's watching this. But in twenty twenty three there was a similar ish shortage of fish oil. That was again it was driven primarily by the Peruvian fishery having a bad fishing season there. And it's looking like for twenty twenty six there's been a a cancelled fishing season for the first half, and then it looks like the second half is gonna be completely cancelled, which is yeah, driving up costs everywhere and even just in general availability for some brands to be able to secure actual the raw material that they need either to concentrate and to put into different products. So we could see be seeing a doubling or yeah, in some some areas, maybe even a a tripling of raw material prices depending on how bad it could get. Paul Vitiello: Yeah, so this is really, you know, The ORIVO certification matters all the time, but right now it's really gonna matter because we are doing everything right. You know, we're a 50 year old brand that has really deep relationships with suppliers. So we have like a leg up. We're not like a company that you know, is just on Amazon and trying to, you know, make a bunch of money, really quick. We have long standing relationships with our suppliers and and that helps a lot, obviously. To be able to make sure we can carve out some supply for for our brand. But a lot of these companies don't. And you're gonna see prices pretty soon start spiking and you're gonna see quality diminishing. But you won't know that if you don't have these these certifications, right? So that's why I think from a brand responsibility standpoint, you know, we have to own up to the fact that we have this ORIVO certification. We also are a GOED member where I think we're the only practitioner channel brand in the world that is a is a GOED member. And with with that, we have to make sure that we keep our Totox levels very low. I think the standard with GOED's below five, the USP is below ten. So a lot of the companies that don't have GOED's which are all the other companies in my channel, they don't have to live up to a specific standard. They can sell it, you know, double the levels of Totox that we would, and they could they're they're fine with it. And for us it's just unacceptable. We want it to be the freshest product. We want our quality always to be the best. And not because there's a there's a cancel fishing season or two to reduce our quality just so that we can have a product. Spencer Macintyre: Yeah, that that makes a lot of sense and I guess what we've seen in previous screenings that we've done is when raw material prices spike, there's just a a larger economic incentive for bad players or brands that yeah don't have these same quality metrics to put in some cheap raw material, whether it's rapeseed oil or canola oil or something that looks a little bit similar. And then it means that they can still have that soft gel look the same, keep the price low or something like that. Whereas I guess a a difference for for you guys is that you've got all of this in-house testing and then you've got ORIVO verification for the species and origin. So for you there's no way that you can do something like that. Whereas there there are unfortunately bad players out there that do look to these means. Paul Vitiello: And we wouldn't we wouldn't anyways. That's the thing. You know, that's the the whole, you know, that's why people trust our brand for any around fifty years, you know, in the practitioner channel. That's why people trust us is we're not gonna, you know, our quality's always gonna stay the same and we're we're not gonna just try to make money just to make money, you know, that it's really even even with the pricing going up, we've seen crazy price increases over the since COVID and we've kept our product pretty stable, which meaning which means it's been eating at our at our profit margins. But we look at the the cost to the patient. And to us, that's like the most important thing. If we can't deliver a high quality product, at a at a decent cost to the patient, what are we doing? That's at the end of the day, we're here to help people. It's not all about making money. Of course, we need to make money too, but you know, it's that's not what it's about. And a lot of the companies don't have the same ethics as us. And that's at the end of the day why we choose to be members of GOED and ORIVO. When we and those are two organizations that we choose to be members of that we pay for. So you gotta remember, if you look at our fish oil cost, our finished product pricing, what the consumer is gonna buy it for, the patient, maybe the practitioner, it's not crazy. Most of the time it it's it's the lowest in the channel. It could be close to lowest or the lowest. I don't know what it is right now, but I'm just saying it's never the highest. And we have all these additional costs that these other companies don't have. So their products are twenty percent more that ours cost, maybe more, and it's all profit for them, you know, at the end of the end, but they're not delivering the same quality that we are, and it's just not happening. We're standing by it and we're saying, we're gonna we're gonna show you where our oil is coming from, what species it is. And we use a hundred percent anchovy from the South Pacific, and we can prove it every time, you know, and and they certainly can't if you don't like how are you gonna prove it if you if you're not if you're not part of that. Also I always bring up the GOED stuff because it's the Totox stuff too. Like you you know, you gotta we have to we sign an agreement saying, you know, we're gonna we're gonna keep our Totox levels below this this level and other companies look at a USP level and it's a lot higher than ours. Sometimes it could be four to five times less fresh than ours. That's crazy. Like you know what I mean? Like you're you're talking Spencer Macintyre: Yeah. Paul Vitiello: about you're talking about a total level that's four hundred percent to five hundred percent worse than what you're buying from Biotics. Spencer Macintyre: Mm, yeah. And I so I guess the the core thing to you guys is really consistency as well. Like high Paul Vitiello: Yes. Spencer Macintyre: high quality, but then consistent. And I presume that if you're a practitioner, like if I put myself in a practitioner's shoes, if I was a chiropractor or someone that was commonly recommending omega-3 supplements, the main thing that I want to know is that it's a quality product and that it's consistent. Whereas I guess there some of these other players that can blend or change very easily what they're getting and not having to meet these same levels can it could be more hit or miss for them, right? If they prescribe that to a patient, then some patients find it okay, some patients find it not so good, whereas with your product, because it's so consistent, it's coming from the same source, it's the same product, same low to toxicity numbers. So then it means that it's it's it's the same product over and over and it's high in consistency. Paul Vitiello: Yeah, they're product. They're gonna the the the doctor's gonna get the same results consistently and the patients are gonna get the same satisfaction that, you know, they're not getting repeat or burping or and it's very it's a fresh oil. They're also getting the results on their laboratory work that they need. the practitioners are seeing those consistent results. And yeah, it's how we we have succeeded as a company is is just the trust that the practitioners have given to us. You we always say it takes Took us fifty years to build this trust and you know, we're not looking to lose that anytime soon. You know, we're we're we're we want another fifty years of people trusting our brand and us doing the right thing when people are looking or not looking. Spencer Macintyre: Yeah, nah that makes sense. I'm just trying to think, is there any other points that you want to want to go on? Paul Vitiello: Yeah, I mean I just again talking about the cancel fishing seasoning, I think that people don't really know what's about to happen. I think that, the biggest mass of of these fish like sardine, mackerel, anchovies that are used in fish oils are caught in the South Pacific. And when these governments choose to cancel these fishing seasons, which they should if if that's is gonna keep the the biomass, healthy. The amount of oil that is going to be available, I mean, is going to be drained. It's going to be completely, it's going to be completely cut in in, I don't even know. It's not even half. It's going to be even more. So you're going to see price huge price increases from company. And you're going to start seeing those soon. But then you're also, like you said, you're going to start seeing adulteration. I really, I would really, if I were a consumer or a practitioner, I would really lean on, looking for products with a ORIVO certification because I think. These brands are doing making that extra step to show that they're really being honest and that look, we can show you that this is where, our fish are coming from. And this is at the end of the day, why the product is still working correctly. And I think the fishing season is more of a big deal than people think it's going to be. I think that it's not only the fact that when the fishing season there's two fishing seasons a year and and when it does come back, usually when it does come back, we see like a a good spike after an El Nino and and we see like the fishing level like levels raised and we're getting decent output out of deal yields out of the the anchovies or the smaller fish to produce that crude oil. The problem like moving forward is that the demand has caught up to the supply. So usually we used to run at a surplus We used to catch more fish than we needed. So there was always extra leftover oil every year. every year forever. That so now, because of the popularity of omega-3s, the demand has caught up to the supply. And at this point, in the future, even when we when the market stabilizes a little bit, it's never going to stabilize. So that means prices are are going to remain higher. They might come down a little bit after the next year or two, but they're always going to be higher because it it's just simple economics, right? There's just not enough crude oil to to to make these the these finished products. And it there's it's just that's the way it's gonna be. So even moving forward, forget about just this next year, but in the future, it's always gonna be like this. So that's why I think it would be, in everybody's best interest to get certifications like a ORIVO and and for consumers to make sure that they're choosing brands that are making the extra step to show you what they're doing is is is the right thing. Spencer Macintyre: Yeah, absolutely. I I think another element to the fish oil scarcity as well as the aquafed side of things, so aquaculture, 'cause they're big buyers and they come in and they they purchase a lot of the actually I think the majority of the omega three oil ends up going to aqua feed and then the amount that goes in for human nutrition and and capsules and fish oil products is actually a a smaller percentage than than aqua feed, but they they're growing as well and that so they're more aggressively buying and they've got deep pockets because they've got these big fish farms that they need to have the right omega-three raw ingredients to feed the fish with. But then it means that it's putting even more pressure on because that industry's growing, they're wanting more. Paul Vitiello: Yeah. We already know our price is going up dramatically. But I mean, at least we're gonna get the oil, right? And you know, we're gonna do our best to keep the cost down to the practitioners and to the patients and to the consumers. But, you know, obviously the price is gonna go up, but the but having that that stable, steady, trustworthy supply is is worth it in the end. And I think that we're gonna see a lot of that moving forward. I think the transparency part of omegas is gonna continue to grow. And I think it's going to be a a big talking point for especially the trade groups and stuff like that moving forward. I I think you're going to see a lot of that. Spencer Macintyre: Yeah, absolutely. I fully agree. I think that with these price in increases it's gonna be more pressure on good players and more pressure on bad players than that then look for alternative ways to be able to be more profitable during challenging times. So Well thanks joining me on the call today, Paul. It's always a pleasure to catch up with you and to Paul Vitiello: Yeah. Spencer Macintyre: to chat. And I'll see you on the next one. Paul Vitiello: Great. Take care. Spencer Macintyre: Awesome, thanks mate.