Bull Session

Steven Dai: Honesty and Transparency is Good Business

Steven Dai is the president and CEO of International Vitamin Corp. (IVC), which supplies dietary supplements to many of the country's top retailers, as well as nutritional, prescription and over-the-counter products for contract customers internationally. With four manufacturing, packaging and distribution operations across the country, and annual revenue of $600 million, IVC is one of the leading vitamin manufacturers in the United States.

The company has grown six-fold in the last six years. What is your formula for success?

Innovation is important. We have many projects in our pipeline. We watch market trends very closely to address the consumer's concerns - do they have heart concerns or eye problems? Based on the market needs, we take a look at scientific studies and work with our vendors to identify new generations of ingredients that have better bio-absorbability or other advanced features.

Our innovation team then pulls the market and scientific information together and tries to identify new products to develop and create new formulations based on the science. How many milligrams is the most effective, is it going to be a tablet or a soft gel, liquid or powder? Every year we introduce a group of new products to the market and try to convince retailers that they match consumer needs.

An example of this is an eye health supplement that uses a patented ingredient. Lutein and zeaxanthin are plant-based extracts which are also found in the human eye. They can protect it from the light damage that causes macular degeneration. Scientific studies identified the best ratio of these two ingredients, and we introduced a patented product based on that, and introduced it to the market, and it’s getting a great response.

How do you overcome business challenges?

It goes back to our core values: respect others and do the right thing. Many business challenges - whether it's vendor relationships, customer relationships or internal management — turn out to be people issues. Two iPhones won't argue with each other, but two people will. In the future, maybe two robots will argue with each other, but right now, only people can. Other than technical challenges or machinery problems, most issues are probably generated from a misunderstanding by people who view things from different angles. You think you are absolutely right, but the other person may have strong beliefs, too. Let's put aside who is right and who is wrong. In general, we are trying to do good things for this company, or this vendor, or for this customer. If we have that in common, then let’s go to the next level. My business philosophy is always to have harmony, or a good working environment. So help people to understand each other. What’s on your mind? You don’t have to sugarcoat it, or be very political. Just honestly share as much as possible. We put the issues on the table, we don’t hide our agenda, and we work out a solution.

When we do our communications with our customers, we always claim ourselves to be open, honest and transparent. Many times when we give the customer a proposal, we share our exact cost structure and a lot of additional information. We have the confidence to share this valuable information with you. I hope you understand this is the value we provide. And if you don’t appreciate it, then you're not the right customer. We probably cannot work together. Same thing for the vendor. Sometimes we put multiple people in the same room to share information. If people have a good understanding of each other, you don’t need to fight. Sit down and work out a solution. If there's no solution, fine. If there’s a chance, let's work together. It sounds so simple, but it's not.

"Many times when we give the customer a proposal, we share our exact cost structure."

- Steven Dai

The other principle is to do the right thing. That's not simple, either. We need to understand the right thing to do. Helping the company to make more money may not always be the right thing – you cannot sacrifice quality, you cannot make shortcuts, and you need to follow standard operating procedure. It’s common sense; I believe everybody knows the right thing to do. If you do the right thing, the company may suffer consequences, but eventually you’ll save the company, or help the company to grow. If you take a shortcut or don’t do the right thing, that can cause a disaster.

One of your values is creating a sustainable supply chain. What does that look like on the ground?

We help our customers, the retailers, redesign the way they package products so it eliminates a lot of paper. We help them to reshape the size of the box, the way it’s folded and the presentation. We keep energy savings and the green concept in mind, trying to save money and pass the value to the customers, and they pass the savings on to consumers. Most of the time the consumers don't know about this, but there's actually work being done and we put a lot of effort into protecting the environment and try[ing] to make the supply chain more sustainable. For example, every year, a lot of shrimp and crab are harvested. Instead of letting the shells go to the dump, we re-collect this raw material, process it, extract the glucosamine, and use it in a joint-care product called chondroitin. It’s a form of recycling. We identify those opportunities where the ingredients are proven by science to be effective and make formulations, and introduce that to the market, and eventually it will benefit people.

Are you selling supplements in China?

Even though our investors are Chinese, we are a traditional American manufacturer, and 95 percent of our business is in the U.S. We're not currently selling to China, but the future market has big potential. In addition to Chinese medicine, things like vitamins, supplements and nutritional products have become more and more popular in China. The Chinese people like American brands, and they trust the quality and label claims of American products. They're willing to pay, and they're capable of paying, because they pay attention to their health. It’s a huge market, but we are not there yet.

Are there any supplements you can recommend to stressed-out entrepreneurs and business people?

We have one very good product with a long history. It is called Stresstabs. There are three formulations. One is called Stresstabs Energy; another one is called Stresstabs Relax, and the third is Stresstabs Advanced. If you are working in today's professional environment, you have some level of stress. And how you handle it is really important to your health. Stresstabs Energy gives you a little kick to overcome stress during the day. Stresstabs Relax is for after work to help you calm down, soothe your mood, and enjoy your personal life. You can find them at Walmart, CVS and other major drug stores.