Riding the rise of the supplement industry

by Mark Pendergrast

food_science_fpo_bradDale Metz left the corporate accounting world in 1998 to head up FoodScience Corp. in Essex Junction, a manufacturer of food and health supplements for humans and animals. Thirteen years later, the company’s sales have grown from $10 million to $40 million.

Health supplements support Dale Metz in more than one way. The 58-year-old CEO of FoodScience Corp. in Essex Junction, and his family, use many of his company’s products.

For example, Metz takes omega-3 in fish oil from wild-caught anchovies; a senior multivitamin, methyl ulfonyl methane for joints; CoQ10 for heart health; dimethylglycine to boost his immune system; and Vitamin D3.

His wife, Keeli, takes many of the same products, plus a weight-loss product made from an extract of white kidney beans. The two Metz rat terriers, Jake and Josie, take a canine multivitamin, a hip and joint product for small dogs, and Calming for Small Dogs (good for hyper dogs during dinner parties). Their four cats, Harry, Oreo, Eddy, and Bella, take a multivitamin along with a hair ball preventive and a product to eliminate litter box odor.

From all appearances, the health supplements work, since Metz is a trim dynamo who has helped turn FoodScience into a $40 million a year business, with its products for animal and man selling in 60 countries.

As he leads a tour through the labyrinth of cubicles; filling lines for pills, capsules, and soft chews; storage, packing and shipping departments; and the gym at company headquarters on New England Drive in Essex Junction, he rattles off statistics, explains processes, and greets workers by name.

One would think that Metz had worked in this industry for most of his career, but that would be wrong. An Essex Junction native, he served in the Navy for two years, then earned a bachelor of science in accounting at Bentley University in Boston.

He worked as a CPA for a series of firms, including P.F. Jurgs in Burlington, which merged in 1987 with the mega-accounting firm KPMG, where he was a partner in charge of corporate transactions for New England. “I worked out of Boston and commuted back home to Vermont on weekends,” he says. His division specialized in bankruptcies, litigation support, forensic accounting, valuations, and mergers and acquisitions.

By 1998, Metz was flying every Monday to New York City, where he stayed at the Waldorf. His division of KPMG had swelled from a $10 million to a $120 million practice in just a few years.

He was at the pinnacle of his profession, traveling extensively, but he wasn’t happy, professionally or personally. Dealing with troubled firms facing bankruptcy, he wanted to take ownership, turn them around, and sell them for a big profit. “But that’s not the nature of conservative accountants,” he recalls.

The year before, he and his wife, Keeli, had adopted a baby, Marriah, and they would soon adopt Gabrielle. He also had two older children, Robert and Nicole, from a previous marriage. Metz wanted to stop traveling.

In the summer of 1998, he took a sabbatical “to find out how good a golfer I could become,” as he puts it. Yes, he admits, you could call it a kind of mid-life crisis. He wasn’t worried about money, but he was 45, full of energy, and didn’t want to retire.

In early August, he stopped by FoodScience, a former accounting client, to look at the company’s first big packaging machine and to say hello.

“I ran into Claudia Orlandi. She asked if I would be interested in succeeding CEO Lou Drudi, who had been sick and was looking to retire.” Metz met with her and her husband, Dom (now deceased).

With 40 employees and $10 million in sales, the company was decent-sized by Vermont standards, but it was much smaller than the huge corporations Metz was used to. Still, it was right there in his hometown, and he could see where it might grow.

In September, he came aboard as vice president, overlapping briefly with Drudi before taking the reins as CEO.

FoodScience was founded in 1973 by Guido Orlandi, a bigger-than-life figure and consummate salesman. “He could sell ice to Eskimos,” Metz says. “He was into buying and selling cemeteries, real estate — you name it. He had made and lost millions.”

When Orlandi’s wife, Maria, developed breast cancer, she was treated with the standard chemotherapy and radiation, but she also took what was then called calcium pangamate or Vitamin B15, which the Russians had used for their Olympic athletes. Maria got better. Orlandi was sure it was from the alternative medicine, and he subsequently started FoodScience.

The principal ingredient in calcium pangamate turned out to be not a mythical vitamin but a nutrient called N, N-dimethylglycine, or DMG.

Orlandi soon hired Ph.D. biochemist Roger Kendall, who had identified DMG, as the head of research and development. Kendall, who holds several DMG patents and is the author of Building Wellness with DMG (Freedom Press, 2003), still works for the company.

Guido and Maria Orlandi have passed on, and Dom’s widow, Claudia, owns the company and remains involved. Her stepson, Dom Orlandi Jr., meets with physicians across the country, specializing in custom formulations to address conditions they have identified.

Six companies are under the FoodScience umbrella — three for human supplements and three for animals (mostly dogs, cats, and horses). FoodScience of Vermont sells supplements through distributors to health food stores, Costco, drugstores, and other retailers.

DaVinci Laboratories of Vermont sells similar but often stronger products to health care professionals. Mountain Naturals sells to consumers through the Internet.

Vetri-Science Laboratories provides animal supplements to veterinarians. U.S. Animal of Vermont sells primarily to horse trainers and race tracks, but also to large dog breeders. Pet Naturals of Vermont, launched in 2005, sells animal supplements through retail stores.

When Metz arrived at FoodScience in 1998, the human supplement business was already booming, and the company was one of hundreds competing for a piece of the $25 billion annual U.S. pie.

“It was a mature market,” Metz says. “Our niche was to carve out custom formulations, private-label fulfillment, and condition-specific products aimed at the aging population for joints, cardiovascular and digestive issues, and eyesight.”

Under Metz, the company also shifted from direct sales to the use of distributors for most products. “If you are in a doctor’s or veterinarian’s office, you don’t want to deal with 50 different salesmen,” he says. But the shift to Internet sales is changing the landscape.

Under Metz, the company’s profits from animal supplements have grown the fastest, and it now ranks No. 2 in the country for veterinary pet products behind Nutrimax of New Jersey in a $1.5 billion annual market.

“When I first came here, we made only tablets and capsules,” says Metz, “and there were palatability issues.” Dogs and cats gagged up the pills, and owners were tired of wrapping them in cheese or bread and trying to stuff them down their Rottweilers’ throats. Working with the company’s main lab supplier, it developed “soft chews” that pets view as treats.

Metz is vice president of the National Animal Supplement Council (NASC), founded in 2001 to respond to bureaucratic threats from the American Association of Feed Control Officers.

Working with the FDA, Metz and NASC president Bill Bookout (the CEO of Genesis Ltd., a California animal supplement competitor) managed to get animal supplements sold as “unapproved drugs” that are nonetheless deemed safe.

That raises an important issue. Both animal and human supplements are a kind of alternative medicine, but they are not prescription drugs. They must be safe, and there does have to be some scientific evidence to support their use, but their efficacy doesn’t have to be proved in double-blind placebo-controlled tests.

“We can make claims on the label, such as supports healthy joints,” says Metz, “but we can’t say it cures or mitigates a disease.” Yes, he admits, “there are products on the market that aren’t very effective but won’t hurt you.

“On the other hand, there are drugs out there where the cure may be worse than the disease. For instance, Remedil from Pfizer is supposed to help with hip and joint pain, but it can cause liver problems.”

Better to use natural remedies, Metz believes, such as glucosamine, derived from shrimp and crab, and Perna canaliculus, made from green-lipped mussels. Those are two of the main ingredients of Glyco-Flex, the Vetri-Science product that Metz calls its “golden goose.”

Such hip and joint products constitute 80 percent of the animal market. Every day, a container-load of powdered mussels is crossing the ocean from New Zealand, destined to end up in a soft-chew Glyco-Flex package.

“We buy 50,000 tons of mussels a year,” Metz says. “That’s a lot of mussels.”

Metz is an early riser, getting up at 4 a.m. to review contracts and respond to email, then arriving at FoodScience, where “the rest of my day is dictated by the 130 people who work here.” (There are 30 other employees across the country.)

Mary Helrich, a certified nutritionist who has worked at FoodScience since 1983, calls Metz “a quick study on any issue. He has high energy, is very, very smart, and a good debater. If you present an idea to him, you’d better be prepared.”

Bill Bookout of the NASC says, “Dale is a make-it-happen, results-oriented person, a strategic thinker. He’s also very much a diplomat in dealing with Congress and the FDA.”

Henry Weinberg, purchaser for 1-800-Pet-Meds in Pompano Beach, Fla., values Metz “for his professionalism, demeanor, and sense of humor.”

Does Metz ever miss the high-rolling days as a partner at KPMG?

“I have a recurring nightmare that I’m back in accounting and that I haven’t turned in my time sheet. No, I don’t miss that world.

“What’s nice about a company this size is that we are small enough to make things happen quickly. We can turn on a dime.” •