NBTY, Inc.

  • Overview

NBTY draws upon nature's bounty to cash in on the market for preventive and alternative health care. As the largest vertically integrated source of nutritional supplements in the US, the company manufactures, wholesales, and retails more than 22,000 products including vitamins, minerals, herbs, and sports drinks. Brands include Ester-C, Nature's Bounty, Solgar, and Sundown. NBTY has manufacturing facilities in Canada, China, the UK, and the US and is able to produce and package capsules, tablets, powders, and liquids. The Carlyle Group-owned company sells its goods through pharmacies, wholesalers, supermarkets, and health food stores around the world.

Geographic Reach

In the US the company has manufacturing plants in Arizona, California, Florida, New Jersey, New York, and North Carolina. Internationally, it has plants in Winnipeg and Manitoba in Canada, and in China and the UK. NTBY's products are marketed and sold in approximately 90 countries.

The US accounts for around 60% of NBTY's revenues.The UK is its second-largest market, representing nearly 20%.

Operations

The company get the bulk of its revenues from its wholesale operations. Unlike many of its competitors that rely upon third-party manufacturers, the company actually manufactures 90% of the nutritional supplements that it sells and also serves as a third-party manufacturer of private-label products for a broad range of retailers.

In North America NTBY operates more than 450 Vitamin World stores in US malls. It European retail segment includes about 690 Holland & Barrett stores (including ten franchised stores in Singapore, six franchised stores in Cyprus and China, three franchised stores in Malta, and United Arab Emirates and one franchised store in Gibraltar and Hungary), 55 GNC stores in the UK, 112 De Tuinen stores in the Netherlands and 42 Nature's Way stores in Ireland.

In addition to its retail stores, NBTY operates Puritan's Pride, which sells nutritional products through mail-order catalogs and over the Internet. Based upon the success of the Puritan's Pride site, the company is establishing additional websites to support its brick-and-mortar retail brands.

Sales and Marketing

The wholesale segment sell its products through all major mass merchandisers, club stores, drug store chains, and supermarkets. It also sells its products to independent pharmacies, health food stores, the military, and other retailers.

NTBY markets its products through print, media, and cooperative advertising and also through radio, television and internet advertising. In the UK and Ireland, Holland & Barrett advertises on television. Holland & Barrett, GNC (UK) and Nature's Way advertise in national newspapers and conduct sales promotions. In addition, Holland & Barrett, GNC (UK) and De Tuinen each publish their own magazine with articles and promotional materials.

Solgar and GNC (UK) advertise in magazines and conducts sales promotions. In Canada, SISU advertises in trade journals and magazines. Vita Health advertises in newspapers, trade publications and magazines, and operates websites.

Wal-Mart accounted for 13% of the company's total sales in 2013. Other major customers include Costco, CVS, Walgreens, Kroger, and Target. NBTY spent $189 million on advertising in 2013 and $164 million in 2012.

Financial Performance

NBTY has enjoyed unprecedented growth over the last few years. Revenues jumped 5% in 2013 to peak at $3.1 billion, a historic milestone for the company. Profits fell, however, 12% from $146 million in 2012 to $129 million in 2013 as a result of higher restructuring charges it paid throughout 2013.

The growth for 2013 was driven by increases from all of its segments except North American Retail. The company was also helped by a 17% spike in sales from both Canada and the Netherlands. All these factors were the result of higher demand from the company's Nature's Bounty, Osteo Bi-Flex, and sports nutrition brands (such as Pure Protein and Body Fortress).

Strategy

Spotting trends early and riding them wisely is crucial in the nutritional supplement industry. While the company keeps an eye out for new products, in recent years it hasn't spent much on research and development, preferring instead to simply acquire or copy products with proven sales. The company introduced more than 160 new products in 2012.

NBTY has grown big and strong as the entire natural products industry has boomed, but a steady diet of acquisitions has supplemented its growth. NBTY's sales are still heavily concentrated in the US and UK. It has plans to deepen its presence in emerging international markets where the growing amount of consumer income can be used to alleviate nutritional deficiencies.

To streamline its operations, NBTY restructured its operations throughout 2013 by closing seven manufacturing and distribution facilities.

Mergers and Acquisitions

In 2012 the company spent $78 million to acquire Balance Bar Company, which makes and markets nutritional bars. To raise cash, that year NBTY sold its Le Naturiste unit (retail stores in Canada) to an unrelated third party.

Ownership

The Carlyle Group paid about $3.8 billion to acquire NBTY in 2010.

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NBTY, Inc.


2100 Smithtown Ave.
Ronkonkoma, NY 11779
Phone: (631) 200-2000
www.nbty.com

STATS


  • Employer Type: Private
  • CEO: Jeffrey Nagel
  • Vice Chairman: Harvey Kamil
  • CEO: Jeffrey Nagel

Major Office Locations

  • Ronkonkoma, NY

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