Heavy lifting at startup phase was best prescription for health firm
Without bank credit, the duo behind Galway Natural Health Company had to run a lean operation
THIS is the time of year when we all intend taking better care of ourselves. We commit to giving up smoking, cutting down on alcohol, eating less sugar and taking up exercise in the hope that this will make us look better, feel fitter – and perhaps even live longer.
Many of us will go one step further and invest in some form of health food supplements in the hope that these might give us the nutrients that our poor diet and hurried lifestyle don't provide.
But with so much choice and so many different types of supplements on the market, it's difficult to know which are actually beneficial and which are a total waste of money. As a result, kitchen cupboards and worktops throughout the country quickly become littered with half-used containers of vitamin and supplement mixes.
It was this very confusion and the belief that there was a market for a premium comprehensive health food supplement that led Daithi O'Connor and Liam Salmon to set up Galway Natural Health Company in 2011. Today, their best-known product, Revive Active, is gaining significant traction in both the Irish, UK and European markets.
"We wanted to create a range of health food supplements that would offer real benefits to consumers and which would be convenient and easy to take," explains Daithi.
"The proof of the pudding is in the eating," insists Liam, smiling, as he hands me a glass to taste.
Revive Active comes in a powdered format in individual daily sachets and tastes like a glass of juice you'd have in the morning.
"The product helps increase your energy levels, boosts your immune system, improves mental clarity, heart and cardiovascular health and helps fight ageing," explains Daithi.
Sixty-five per cent of Revive Active sales comes through health food stores and pharmacies in both Ireland and the UK, while the remaining 35 per cent come from online sales globally.
"Our target market includes both male and female over the age of 40. Although consumers of all ages are using it and benefiting from it," adds Liam.
Daithi O'Connor grew up in Sligo town. The son of a GP, he has always had a keen interest in health. After school, however, he opted for a job in the bank. In 2005, after more than 25 years in various financial and management roles within the banking sector, he set up his own financial services company.
In 2009, a customer suggested he take a health food supplement which he had come across.
"It was amazing," explains Daithi. "I immediately felt more energetic and had greater mental clarity – so much so that it was a real turning point for me," he adds.
He began researching the market for health supplements and a friend suggested he contact Liam Salmon, who he knew had an interest in the sector and who was interested in setting up a business.
Liam Salmon grew up in Ballinasloe, Co Galway. He studied chemistry in Athlone Institute of Technology and worked for more than 20 years in the pharmaceutical and medical device sectors, including senior roles in firms such as Boston Scientific.
"I felt that if we could offer the proper therapeutic dose combined in a convenient and affordable mix, we could really disrupt the market," explains Liam.
To achieve this, the pair began a long period of consultation with nutritionists, general practitioners and consultants in various fields of medicine. They also made the decision from the outset not to use fillers in their product but instead to ensure that everything in it would benefit the body. That, they felt, would make the product superior to anything else available and be a real differentiator in a crowed marketplace.
"We had our first formulation completed on Christmas Eve 2010 and we were so keen to get our hands on the samples that we drove in the snow from Galway to collect it. It was the best Christmas present we could have hoped for," Daithi tells me.
The challenge facing the pair during the early stages of research and prototype development was to come up with a formulation that contained all the vitamins and minerals required for optimum health which also looked appealing and tasted well.
In addition, they were committed to ensuring that the product contained no artificial flavourings, colourings or preservatives and so was sweetened using a natural sweetener called Stevia.
Because the product contains 26 separate ingredients, customers would have to purchase all these ingredients separately and take a significant number of capsules every day if they were to seek the same health benefits.
One of the biggest challenges facing Daithi and Liam in the early days was the lack of any external investment.
"We put €150,000 of our own money into the business but couldn't raise any debt from the banks because they were effectively closed at the time," explains Daithi.
As a result the pair couldn't afford to give credit to their retail customers and had to run the business on a purely 'cash on delivery' basis.
In addition, to help grow the business, neither took a salary for the first year. Like many entrepreneurs in the startup stage, they ran a very lean operation working seven days a week to generate enough sales to fund the next production of stock.
Throughout this challenging time, it was the positive feedback from satisfied customers that sustained and motivated them. They heard countless stories of how their product had helped customers feel healthier and cope better with the stresses and strains of modern life.
"Introducing a new product like ours to the marketplace was always going to take time because we had to engage in a process of educating both the retailer and the consumer," explains Liam.
Growth initially came through staff in retailers recognising the uniqueness of Revive Active and recommending it to customers. Nutritionists, medical doctors and consultants also began prescribing it.
To further increase awareness, they recruited the help of brand ambassadors including rugby coach Warren Gatland and sports broadcaster Tracy Piggott.
They have great praise too for the support they received from Irish Health Food Stores, which got behind their product because of its quality and because it is made in Ireland.
"Only about 5 per cent of food supplements on the market in health stores are actually made in Ireland," Daithi explains.
As sales began to increase they also noticed that their initial focus on the over-50s target market was too narrow. Having conducted further market research and from engagement with their diverse consumer base, they found to their surprise that many of their customers were in their 20s and 30s.
As a result, they quickly rebranded and repositioned their product so as to be non-age specific.
"That was a real lesson for us, not to assume we knew everything about the market," explains Liam.
With turnover due to double in 2014 to more than €2m, Daithi and Liam are planning for the future. They will soon launch their Revive Ocean Blue Krill Oil – a fish oil which significantly improves cardiovascular function. They also hope to bring out a joint health product.
New product development is key to the long-term growth and sustainability of the firm.
They are keen, too, to enter the US market and – having recently completed a feasibility study – are more convinced than ever that the opportunities for them there are huge.
They have also recently announced their decision to bring in leading entrepreneur, Pat McDonagh of Supermac's, as both an investor and a non-executive director. They believe his experience in business both in Ireland and the US will benefit their growth immensely.
In addition, they recently raised over €200,000 through an EIIS (Employment and Investment Incentive Scheme) to help fund growth and were approved by Enterprise Ireland as a high potential startup enterprise.
Daithi and Liam can be proud of their achievements. They can be proud that they have been able to combine their technical and financial skills to successfully launch and grow their own business in a space they both love; that they have been able to create jobs in Galway; that they have successfully surrounded themselves with key staff, suppliers and retailers who have helped bring their dream to fruition.
And they can be extremely proud that they have created a health food product that truly makes a difference in the lives of their customers. That's something every entrepreneur would be proud of.
Daithi and Liam's advice for new businesses
1 Believe in your product
"You have to truly believe in your product otherwise you won't be able to convince retailers or customers of its value. Enthusiasm is both important and infectious."
2 Be prepared to start small
"Don't try and run before you can walk – get each part of the business right before seeking to scale it. That way, your business will have a solid foundation for the future."
3 Success takes a lot of work
"Growing a business is hard work. You have to wear many different hats in the beginning and have to be willing to put in the long hours. There are very few shortcuts."
Company: Galway Natural Health Company
Business: Manufacture and distribution of health food supplements
Set up: 2011
Founders: Daithi O'Connor and Liam Salmon
Annual turnover: €1m
Number of employees: 10