Now that Incredible Mood is *finally* on sale, it’d be instructive (and funny) to take an inside look at how it came to be, from beginning to end.
This article is part 1 of a 2 part series that details how it was made.
Attached are e-mails that have been modified to preserve confidentiality that trace the life of the product from idea to final formulation. With lots of juicy excerpts included.
Hopefully this’ll be an insightful look for customers and business owners to see how these things actually work.
The e-mails will cover 4 phases of the project:
- Pre-manufacturing business development & formulation
- Finding a manufacturer
- Getting it manufactured
- Marketing & sales
We’ll cover the first two parts of the process in this article. The manufacturing and sales & development come next.
Recounting these has been enjoyable, nostalgic, and a little embarrassing.
Step 1: Finding A Manufacturer & Product Development
The first issue was finding a manufacturer that was a good fit and seeing if the formula could be manufactured in its original form.
The formula was difficult because of my anal retentiveness over what forms of each ingredient ought to be used.
In particular saffron, EPA (fish oil) powder, and a wide variety of vitamins in specific forms needed to be used for the product to be its best.
Here’s one of the first conversations I had with a manufacturer about the project:
Me: Good afternoon. This is Jonathan Bechtel, I own a company called Health Kismet and I spoke to you at SsW about a formula for mood regulation. I left you the formula w/ my card attached.
1). Is it possible to have a follow up discussion about the specifics of manufacturing the formula?
2). Can we get an NDA signed? I’d like to write that up before going further.
Thanks and all the best.
Mr. Manufacturer: Hi Jonathan,
Good to hear from you and hope everything is well!
I remember your formula and it looks promising. I’ll need to forward your info over to our sales group to get an idea of the project and if it’s an opportunity they want to pursue. I know I would like to work on something like this! Unfortunately, I do not determine the projects I can work on from our customers, but the sales team will pick up the opportunity and we can get to work if the opportunity makes sense.
I will forward this information over to our group to get started- in this respect you can talk volumes, formula etc.
Me: Real quick…..can you give me an elevator pitch about the usefulness of choosing a 1%/10%/etc vitamin powder vs. a pure powder?
Besides price/dilution I’m not clear what the tradeoffs are.
Mr. Manufacturer: Jonathan,
Simply put, it allows the intended amount of the vitamin to be delivered in a more accurate manner.
If I add vitamin b12 into a formula using a pure powder B12 and not diluted- and say I want 100% dv- It is almost a guarantee this will be off because of the minuscule usage rate in the formula- it could not be blended well. The reason is the usage rate would be something like .0001%.
However, if you dilute to 1% B12, the usage rate might be something like .02% in order to hit the intended value. This is much more realistic for a blender to mix adequately so the serving size is equal in each scoop of powder.
Me: I spoke w/ ***** @ SupplySide West and he told me it’s up to you guys to decide what projects you want to pursue. Apparently you are the guy to contact w/ this sort of thing.
I attached a formula that I gave to ***** at the event.
Here’s my company website if you want to take a look at it: www.healthkismet.com
My general impression right now is that it’s pretty doable but my preferences for specific types of vitamins might jack up the prices to unreasonable levels. I’d be interested where exactly I’m pricing myself into the stratosphere.
I’m also assuming the EPA powder is going to be problematic….maybe intractably so.
Thank you for whatever time you can give this and I look forward to hearing from you.
Mr. Manufacturer: Hi Jonathon,Thank you for reaching out to me and for sending over your formula along with the details and concerns you have with it.The first two items we will need to have in place before typically working on any formulas or pricing are an NDA and a credit application. The Credit Application is the requirement of our Corporation. The NDA is to protect you and your formula (not that we would share your info with anyone regardless).
Once those two items would be completed we can discuss the formula in further depth as well as order quantities and any raw material concerns we may have. From there we would typically develop the formula you wish to bring to market and provide a quote to see if it is in the price range you desire. If so, we would then proceed to putting together samples to send over to you for evaluation and potentially approval.One item to note is that if corporate runs credit and Health Kismet ends up being a cash in advance account, our credit and finance team may require payment for R&D work as well as samples. Then if we move to production we would require payment for the run when the order is placed as opposed to when it ships from our facility.Regarding a couple of questions you had in the spreadsheet:
- Non-GMO flavors will drive up the cost of flavoring.
- 700cc containers shouldn’t be an issue
- The time line fits our lead times. Typically 12 weeks for a new product order.
- EPA powder our R&D team would have to look into. I cannot advise on it as I am not familiar with it.
- If we buy the ingredients we do not share our vendor information.
Things didn’t workout with these guys……they didn’t get back to me, I was “Cash Only”, and their order minimums were 2,000. Not unreasonable, but a bit higher than I was looking to start with.
Here’s how things went with another manufacturer:
Mr. Manufacturer #2: Hello Jonathan!
I hope you had a wonderful Thanksgiving holiday.
Thank you for your patience while I obtained the following cost on your proprietary blend for you.
500 bottles $—-
1000 bottles: $—-
5000 bottles: $—-
10,000 bottles: $—-
If pricing works with you, we will put you in contact with our graphics dept. regarding packaging and labels.
Please don’t hesitate to contact me if you have any further questions!
Me: Thanks. To be honest I thought it’d be higher than this.
I’ve checked in a few places and some of the ingredients I specified were expensive.
This is the price…..including the use of folate (and not folic acid?).
P-5-P and not pyridoxine HCL? I made specifications on the quote sheet that I thought would end up being very expensive.
I was expecting to get blown out of the water with the 500 bottle run. Not complaining, I just want to make sure.
Mr. Manufacturer #2: Haha. We do have very good pricing but I will make sure that the lab followed your specifications exactly. Be in touch soon!
And if there were differences just let me know where. I might be willing to talk about alternatives.
Mr. Manufacturer #2: you got it!
Me: Just a quick modification of my original request (and thank you for your time):
1). Would it be possible to list the form of each ingredient you’d use from this quote? This is slightly expanded from my original request.
magnesium magnesium citrate
vitamin d cholecalciferol
I only ask because I’m very curious how you were able to include certain ingredients, many of which I thought be difficult or very expensive (including: epa/dha powder, vitamin k2, folate,) etc. So I’d like to see if/where certain modifications were made, if at all.
2). I looked over the label signoff form again, and I didn’t see anything mentioned about the use of flavors. I mentioned the possible need for flavor on some of the original material I sent you, but I’m not sure if that was included in the quote or not. I’m anticipating adding natural flavors to it, which I know can increase the price, especially since I’m shooting for a NON-GMO claim in the label.
Okay, thank you very much.
Mr. Manufacturer #2/R&D Guy: yes it is possible to use those forms, but keep in mind that mag citrate is a form of magnesium that has only roughly 14% magnesium. Mag oxide has a much high % magnesium. Mag citrate may be more bioavailable but would require a higher level of the citrate to get to the amount of magnesium required. Yes the other ingredients were included.
Vitamin D is fine as is. Flavors were not included in the quote and may increase the cost. Non GMO may increase the cost slightly as well. Otherwise should be good.
Me: So was the original quote made on the assumption that magnesium oxide would be used?
What about the EPA powder? When I spoke with him he sounded skeptical about its inclusion, and is one of the reasons I was surprised the quote came back so cheap.
I also included vitamin K…..did he assume phyloquinone (K1, inexpensive) or K2 (MK-4, MK-7….much more expensive). I requested K2, but want to double check.
B6? (pyridoxine HCL vs. pyridoxal-5-phosphate).
Sorry, I am picky about what forms of these vitamins, and how the inclusion of one or the other might affect costs, because some of my stated preferences include ingredients that are much more expensive than some of the more common forms, so I want to make sure this quote includes the forms I specified or not. Important info.
You’re the best and keep up the good work.
PS – I’m in contact with three other manufacturers about this project and will be making a decision fairly soon, and if we can get this issue cleared up I won’t pester you with additional questions. You’ve been a tremendous help so far.
Well, it didn’t workout with these guys either. Turns out they were involved in some shady business and had a few bad complaints on this site, among other things.
Mr. Manufacturer #3: Hello Jonathan,
Hope all is well. I wanted to reach out and see if you are in need of manufacturing services? ——- has no minimums, guaranteed lead times, and complete transparency. Hope we can do some business together, our website is below with more information and I am here if you need anything.
Me: I don’t have access to a scanner at the moment so I attached a spreadsheet instead w/ the info you listed.
Here’s the basic rub:
I have one formula that I’m already making that I’m looking to tweak slightly, and would be willing to listen to different offers for. I’m not unsatisfied with anything at the moment but would be willing to see if I can get something better. This is the greens formula. I’d want to do 1,000 bottles.
The second formula is one I’m looking to develop right now…….I’m looking for a small initial batch (500 bottles) but some manufacturers don’t want to go there. If that’s you, I wouldn’t necessarily disqualify you, but there’d have to be other compensating factors. ATM I have a solid quote from —— on this formula w/ favorable terms so they’re in the lead for now.
For this formula I’m not as sensitive to the per bottle price. Getting the right ingredients + flexible runs is the most important thing.
Where are you guys located at? I’m out west right now and will be leaving early June. At this time I’ll probably look to visit manufacturers w/ competitive bids.
For the greens I’m more sensitive to unit price since I’m already making it and things work as they are.
Thank you, and let me know if you have more questions.
Mr. Manufacturer #3: I love that you are thorough and have done your research. You do not come off demanding but passionate. You would be shocked how many requests I get where they tell me 4 words and expect me to be able to figure the rest out and read their mind.This will take some time and I want to make sure we do it right. Like you said quality of ingredients and flexible runs are most important. We will gladly do the 500 bottle run, I know if we can earn your 1000 Greens bottles that will help with cost for the 500 bottle run. Ill have to also request a sample of the Greens in order to match flavor, see exact packaging specs, and fill amounts.We are always open to a visit and are located in —–. Let me know if you have some time to make it over. Ill start submitting this quote and getting the process going.
Mr. Manufacturer #3:
I wanted to update you. Sorry this is taking longer then I thought but I didn’t like the pricing we received from some of the vendors on the raws. Ive reached out to a few contacts to drop the pricing to meet your target price. Just wanted to give you a heads up.
Mr. Manufacturer: Jonathan,
Here is the quote for the Creatine Complex. I want to first thank you for your patience, we are normally not this long. One thing is we had an employee pass away at the office last week which kind of shut us down for some time.
I ended up going with these guys, and so far all has went well.
Step 2: Product Development
With my manufacturer down, it was now time to make sure the details of product development were taken care of properly.
Here’s how I sought help:
Me: Hi —-,
I’m developing a new product for mood regulation. I’m planning on pitching it to different grocery stores/retailers/distributors when it’s released
I was wondering, could I use you as a consultant to help me do it the right way? I’m fairly new to the retailing thing (I use a few small distributors and sell mostly direct to consumer), so I’m not sure the best way to approach the issue and want to expedite my learning curve.
This is what I’d look for your help with:
1). Input on formula — (ie, what do you think would make it stand out or more desirable for consumer appeal based on your experience)
2). Development of marketing materials (ie, what’s the best way to talk to grocers, best avenues to approach them, what are their pressure points that lead them to say no/yes)
3). Supply chain exploration. (ie, what does the distributor landscape look like?, what are they looking for, etc)
I’m looking to begin production for this in about a month (by that I mean creating a test batch and begin the tweaking process, it might be longer before it’s actually a finished product).
We could probably start sometime around then.
We can converse anyway you’d like — skype, e-mail, phone calls, or any combination thereof.
Let me know what you think.
Consultant: My rates really depend on what you want. Do you want the product formulated or do you have your own formula that just needs tweaking? Do you want me to get it in distribution? Do you need me to source raw materials and walk it through the manufacturing process?
Let me know what services you want and I will let you know the rate.
Me: I basically have the formula already settled on, and depending on what manufacturer I go with, may have to do some of the sourcing myself.
I’m mostly looking to get feedback on my formula from you to see if it’d be up to your standards (since I know you have high standards I’d like to do something that’d pass your criteria for a good product), guidance on how to do proper QC on my manufacturer w/ tests + labs (especially for the materials I source myself), and at least help with crafting marketing material for grocers and distributors……I’m not really sure where these people reside, what they read and how they think, so I’d like to know how to best reach them.
Consultant: For the services you are asking for I would normally charge around ——–. Because you want to do the right thing, I would take ——- dollars off. So figure about —— dollars for everything.
Me: That sounds pretty fair.
My answer is tentatively “yes.”
I’m contacting other people right now for various services so give me a little bit of time to arrange those so I can better schedule my expenses for this project.
I’d say about 2 weeks.
How would you want to handle payment?
Me: Here’s something I wrote up about the project:
It’s not an official document, but I wanted to make sure you were okay with the basic scope of what I’m trying to do. If you’re okay with this I’ll put it into something more formal sounding that we can both sign.
Consultant: So I read the document and the formula you sent me. Most of it seems fine. I however do not have much experience dealing with grocery stores. My expertise is more on the manufacturing, health food store, and specialty retail side. So if you want in big grocery stores, I am honestly not too familiar with their process for buying or how to get the product in front of their eyeballs.. I do have a fair amount of experience dealing with distributors and what they expect.
What concerns me most is that I am not sure that when using the best ingredients you say you want to use, and your trying to get it under $– dollars a bottle. With proper manufacturing, testing, and good quality ingredients, I am just not sure thats doable. The vitamin themselves are very cheap, its the botanicals where the price comes in.
A proper manufacturer would do all the testing for you (Based on your formula, I know a good company in particular who would be a good fit). It would be included in the price they quote you for the formula. I feel like those companies quoting all those testing prices are taking you for a ride. Those numbers are absurd.
$– isn’t the holy grail of price points. It’s what I’m shooting for, but if I have to go over then so be it. (FWIW I have one quote below $— from ——–. I’ll be visiting them when I’m in NY).
I’m aware of how the basic product development process works, I just wasn’t sure how your expectations differed from what’s typically done, and how much.
My products are currently manufactured at ———– and we do stability, assay, heavy metal, micro, and contaminant testing and they source the ingredients.
I wasn’t sure how much things change if you want to buy the ingredients yourself and what your own priors about the process were. It doesn’t sound like it’s as far off as I originally thought.
The next steps were getting the ingredients sourced, navigating the bumps of the manufacturing process, and marketing the product before its sale.