On the verge of science and food industry: how to build a business in the production of dietary supplements
Andrey Konovalov was born in the closed monotown of Ozersk in the Chelyabinsk region with a population of 80,000 people - about the same number live in the Western Biryulyovo district in Moscow. The main center of attraction in Ozersk is the city-forming production association Mayak for the production of nuclear weapons components. Most of the townspeople work at the plant. Konovalov was no exception: in parallel with his studies as a programmer at the South Ural University, he worked as an electrician at the enterprise.
From the city of metallurgists to the city of angels
In 2021, Konovalov was selected in the Work and Travel USA program and came to America for the first time. The country conquered the young man, and he decided to stay there. “After a small Ozersk, where almost the entire population recycles nuclear waste at a plant, and the ultimate dream is an increased pension, Los Angeles seemed like heaven on earth. I was overwhelmed with a feeling of freedom, ”the entrepreneur recalls. Konovalov decided to stay in the United States at all costs, despite his poor knowledge of English and the lack of acquaintances.
In order to integrate faster, he tried to communicate only with local residents, and soon he had an American girl. At first, I was interrupted by part-time jobs, then I managed to get a job as a programmer in a shoe company Shoedazzle, which sold shoes by subscription. It was there that Konovalov learned the principles of marketing - in the future, this helped him develop his own online business.
For a couple of years of his life in the "golden state" Konovalov turned into a typical Californian: he began to monitor his sleep patterns, became interested in the fashion for healthy food, tried fasting and detox, and also became interested in dietary supplements. “Once a friend told me about a friend who drinks something black from India and looks 10 years younger because of this. It turned out he was using a strange thing called shilajit. I also wanted to try it, but it was very expensive - $ 80 per 10 g, ”says Konovalov. Googling, he realized that the mysterious shilajit is nothing more than the Altai mountain mummy - a dietary supplement popular in the USSR. Shilajit is a substance similar to black tar that is extracted from crevices in rocks. Most of this resin is found in the mountains in Altai and in the Himalayas. Shilajit is believed to have medicinal properties and improve overall quality of life, but the supplement is not certified as a medicine. Konovalov found private sellers of mountain balsam from Russia on the Internet and agreed to deliver a trial batch. At home, the mummy cost ten times cheaper - about $ 2 for 15 g. The entrepreneur assures that the effect of the use was not long in coming: his sleep improved, his mood improved, and more energy appeared.
At the same time, dietary supplements should not be perceived as a medicine, reminds doctor-toxicologist and science journalist Alexei Vodovozov. “A dietary supplement is food. Assessing the effectiveness of dietary supplements is like trying to determine this indicator in a carrot. By definition, they can be used to correct the state within the physiological norm, but as soon as it comes to pathology, they should give way to drugs. " Packages of dietary supplements should be clearly marked with an inscription stating that the contents are not medicine, the expert emphasizes. Nevertheless, consumers in both Russia and the United States often confuse essences, says Vodovozov: “A dietary supplement is not something“ natural, safe and effective ”that can replace“ chemical ”drugs. This is a food product that they are trying to squeeze into the pharmaceutical niche and, on this basis, sell at a higher price. Supplements are actively mimicking medicines: they have similar packages, they are packed in capsules or tablets, there are instructions inside and they are sold in pharmacies, so consumers need to be vigilant. "
These nuances did not bother Konovalov: having calculated how much you can earn by importing dietary supplements from Russia to California, he decided to open his own business in the USA.
Exotics of the Ural pharmacies
Konovalov seemed to have opened a new Klondike - selling a penny product from a Russian pharmacy to wealthy Americans. The sale of dietary supplements in the United States does not require complicated permits: production facilities located in the country are certified, and "no special documentation is needed for imported products," says Maxim Ivannikov, co-founder of the CMTech sports dietary supplements production. "In America, dietary supplements are circulated on the market, as they say," before the first flight. " As soon as a substantiated complaint is received about an additive, the product is immediately recalled, ”says Aleksey Vodovozov. It is very common in the United States to add drugs to supplements, he said. “BAA is food, its effect on the body is not particularly noticeable. And the consumer needs to demonstrate that in fact everything works very well. What to do? Add pharmaceutical active ingredient. Since there is no regular selective control of dietary supplements, you can add it until you catch it. " Steroids, anti-inflammatory drugs, diuretics, laxatives, antidepressants and antipsychotics, antiarrhythmic drugs, repotenters are most often used as such "enhancers" - according to toxicologists' estimates, about 23,000 Americans per year go to the admission departments of hospitals for side effects of dietary supplements.
“In Russia, the situation is exactly the opposite: we have a very bureaucratic system for checking each drug, while production is poorly controlled. This leads to the fact that Russian dietary supplements are 100% safe, but extremely ineffective, and in the United States there are a lot of effective supplements, but most of them pose a potential threat to health, "Ivannikov believes. Konovalov was also lucky with the country because of the special culture that has developed in the United States, notes Sergey Shulyak, general director of the DSM Group marketing agency: “The history of dietary supplements consumption in the United States is very long. This is a different culture of consumption than in Russia. It took decades there. "
“And now we’ll drive on it, but we’ll go round this one,” the pilot of the six-seat Eurocopter is pleased to demonstrate the capabilities of a foreign helicopter, dashingly maneuvering among the peaks of the Altai foothills. From the city of Biysk, where the Evalar plant is located, it takes a maximum 20 minutes to fly to the company's plantations. You can't get there by car. Evalar has more than 1000 hectares of land in the mountains, where over 30 types of medicinal herbs are grown. “I’m not saying that it’s cheaper to get our raw materials, but it’s of better quality,” explains the CEO and founder of the company Larisa Prokopyeva.
Evalar is the largest manufacturer of dietary supplements in Russia, last year its revenue amounted to 7.4 billion rubles at a production cost of 1.5 billion rubles. Larisa Prokopyeva says a profitability of 20% - a lot of money has to be invested in advertising (in 2021 Evalar received 1.8 billion rubles of net profit). However, according to the results of six months of 2021, the share of Evalar dietary supplements in the Russian market, according to DSM Group, decreased from 20% to 17%. If in 2021 the share of the five most popular dietary supplements of the Altai company accounted for almost 11% of all sales of dietary supplements in Russia, then in the first half of 2021 - 5.3%. Is the leader losing strength?
Judging by the Evalar product catalog, its effect on a person is almost unlimited: “for beauty”, “for the brain”, “for the heart”, “for the kidneys”, “for men”, “for control weight and weight loss ", just" for women "and just" for men "- only 200 names of tablets, capsules, tinctures, tea bags and even coffee.
In the mid-2021s, the Federal Antimonopoly Service (FAS) accused the company of unfair competition due to the acquisition of exclusive rights to the name "Red Root", and in 2021 mold was found in its dietary supplements. In April 2021, the FAS declared inappropriate advertising of the drug "Transit", "creating the impression" that this dietary supplement has medicinal properties; in May, advertising of two more dietary supplements of the company was declared inappropriate. In 2021, the FAS accused Evalar of violating the Law on Advertising: when promoting Glycine Forte Evalar, it “gave the impression” that the dietary supplement was a drug. In the same year, the company received an order from the FAS to stop distributing inaccurate advertising of the dietary supplements Insulin forte Evalar and AD minus, from which the consumer could conclude that these dietary supplements are being treated. In February 2021, the company received a corresponding warning from Rospotrebnadzor.
"Ovesol" - removes toxins, prevents the formation of stones, "Endocrinol" - the apotheosis! - adjusts the level of hormones, - listed in May 2021 at a meeting of the State Duma deputy Anton Belyakov. - “Troichatka Evalar” - we are told about it every day on all TV channels continuously - has a parasitogenic effect, although it has been proven that this is not so. And finally, aerobatics: "Shiitake" - prevention of oncological diseases. Do you have a conscience ?! ”
Evalar really does not skimp on promoting its dietary supplements.
According to Adindex, the company spent 2.5 billion rubles on advertising in 2021 - just 43 million less than Coca-Cola, and took 21st place in the rating of the largest advertisers in Russia. The State Duma discussed a bill to toughen the advertising of dietary supplements. Belyakov proposed to ban it completely. According to the former deputy (in September 2021, Anton Belyakov became the representative of the Vladimir region in the Federation Council), his draft law received a positive opinion from the government and the relevant committee, but then the "professional community" joined the discussion and after consultations a compromise option appeared. An amendment to the law "On Advertising", adopted in July 2021, obliged manufacturers and sellers of dietary supplements to accompany advertisements with information that these drugs are not medicine.
Larisa Prokopyeva is calm about the claims of regulatory bodies: “We are leaders, that's why they attack us. If we did break it, it was not because we wanted to do it, but because there was no clear law. Dietary supplements in Russia are a new product, therefore, as long as our company lives, they fight with it so much. "
Following in the footsteps of Herbalife
Year 2021, the most popular product in Russian pharmacies is Hawthorn Tincture. One hundred milliliters with a strength of 70 degrees cost 6–8 rubles, they are not subject to either excise taxes or VAT. You can buy it at any time of the day, but there is a special demand in the morning - with a hangover. The Altai company "Evalar" also decided to make money on the popular product. I bought tons of hawthorns in the vicinity and contacted the Moscow office of one of the largest tincture producers. "Hawthorn? - were surprised in Moscow. - Who told you that we use it in tincture? We have enough dyes. "
The production of dietary supplements remains a popular trend in the business community. We have been working for many years both with large, well-known manufacturers of dietary supplements, and with small companies that are just getting ready to enter the market.
In this article we decided to make a selection of the most popular and necessary equipment for the production of dietary supplements. Also, we will touch on the main stages of the technological process, which are common to any area of the pharmaceutical industry. We hope our selection will be useful for both novice manufacturers and those who want to expand their production.
Production lines - turnkey solutions
If you need to start production of dietary supplements or modernize a large number of equipment at once, ready-made production lines will be an excellent solution. All equipment in the line is selected taking into account the efficiency of collaboration. Our experts will help you select the parameters of each machine and, if necessary, make changes to the design.
Line for encapsulating and filling capsules in cans
Equipment in the line:
- Automatic capsule filling machine
- Automatic sorting machine
- Electronic counting device
- Filling machine Dehumidifier
- High Speed Capping Machine
- Induction Sealing Machine
- Jar Labeling Machine
Tableting and packaging line with labeling printer
Equipment included in the line:
- High-speed mixer granulator SHK-50
- FL-15 fluidized bed dryer granulator
- Pharmaceutical vacuum cleaner XCJ-36
- Tablet press ZP-17E
- Vacuum loader QVC-1
- Dust cleaner CFQ-1
- Blister machine DPP-140 <
- HDZ-100 Automatic Cartoner
- Videojet 8510 Marker Printer (supplied only as part of the line)
Line for filling powder into cans
Proper nutrition, yoga, massage courses and much more - everything related to beauty and health has become more relevant than ever. This speaks in favor of the fact that starting your own business selling health products is a profitable idea for a startup.
What to sell in a health store
The health products business is not a pharmacy or a medical equipment store. People who strive to maintain their health by leading a correct lifestyle become regular customers of such stores. On the shelves you can find goods that act as concomitant remedies for certain diseases, for example: goods for diabetics or various herbal remedies for colds.
On the video: How to make money on health recommendations
A wide range of products will increase the popularity of the store, but at the initial stage it is better to limit yourself to two or three categories and focus on the variety within each of them.
The assortment of the “Health Products” store may consist of:
- specialized literature on healthy lifestyles, disease prevention, for expectant mothers, etc.;
- food additives (dietary supplements);
- aromatic essential oils;
- medicinal and natural cosmetics, feminine hygiene items;
- products for pregnant women, lactating women, baby food, baby hygiene products;
- inhalers, air ionizers, ultraviolet lamps, etc.
Biologically active additives (or dietary supplements) are a popular product among consumers. These include complexes of minerals, vitamins, herbal extracts, and so on. They help to replenish the lack of nutrients, reduce the risk of developing many diseases and activate internal reserves, especially in the autumn-winter period. A dietary supplement is not a drug, which means that a license for its sale is not required. All that is required by the SanPiN standards is a quality certificate. Both pharmacies and individual food outlets can sell nutritional supplements.
It is prohibited to sell food additives that do not comply with sanitary standards, have not passed state registration and have not received certificates of quality and safety, with an expired or without a label.
Remember that the consumer is fed up with advertising and does not believe for a long time in the miraculous properties that the manufacturer attributes to his product: it cures everything: from infertility and impotence to chronic and severe ailments.
In modern realities, a person is less and less able to get important nutrients from food. In order to be healthy and maintain all vital signs of the body in the norm, food biologically active additives are introduced into the daily diet (they are not a drug, there are contraindications and consultation with a specialist is required - approx. TASS). Their production is regulated by the food industry, and the composition includes only those components that have nutritional value - vitamins, trace elements, amino acids, probiotics and prebiotics.
After analyzing the market and assessing the demand for vitamins and dietary supplements among the population, Oleg decided to start producing them. How to organize the work of such an enterprise, the young man was told by businessmen who have been successfully producing food supplements in Russia for several years.
Which legal form to choose?
The first step on the way to your business is registering a business. When registering a legal status for the production of dietary supplements, you can choose both an individual business and a limited liability company. The next step is to choose a taxation system - it will depend on your legal form. As a rule, it is worth choosing a simplified or general taxation system here.
The founder of the trade mark "Doctor More" Leonid Gontarev recommends:
If you have already decided on an idea and analyzed all business indicators, break-even points, investments, studied your target consumer, then you can register a company. First, you need to decide on the distribution channels for your products. If you want to sell it via the Internet, popular marketplaces or commodity aggregators such as OZON or Wildberries, an individual entrepreneur and a simplified taxation system used by small manufacturers and suppliers will suit you. If you want to enter pharmacy chains, then you need to register the business as an LLC with a general taxation system, since all large clients will require you to have VAT in the documents.
If you decide to engage in the production of dietary supplements, then it is very important to determine the business model by which you will build and develop your business. It is worth highlighting two popular trends here: you can organize the work of your own production of a full cycle or attract outsourcing specialists who will take on the responsibilities of manufacturing your product. A well-drafted contract will help you reduce the risks of working with outsourcing companies, in which it is worth reflecting the amount of the penalty in case of non-compliance with the work schedule, as well as the exact recipe for the manufacture of bioadditives. In addition, jointly develop a raw material cost estimate to avoid financial disputes in the future. If you do not have your own lawyer or an acquaintance who is ready to draw up the right contract for you and minimize risks, then you can get such a legal service free of charge in the centers of "My Business". The contacts of the regional centers can be found on the Mybusiness portal. f.
Felix Du, founder of organic iodine startup, says:
Contract manufacturing saves budding entrepreneurs from large financial investments. It not only takes over the production of dietary supplements according to your unique recipe, but also removes many marketing issues, for example, product packaging. In addition, such companies receive state registration for your product for an additional fee, saving you from colossal paperwork. When choosing an outsourcing company, you should give preference to professionals and leaders in this segment. Analyze the pricing policy of each company, as well as the products they manufacture. Pay attention to the packaging of the product - it is she who will attract the attention of your potential customers. Therefore, when choosing a contractor for the production of our organic iodine stevia, we preferred a company that had better packaging, despite the fact that it cost a little more to work with.
What documents do you need for your own production?