REAL IS RARE

REAL IS RARE EP 6 - Richard Wang and Ken Montes with NuLiv Science

• Simpson Labs • Season 1 • Episode 6

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0:00 | 49:06

Richard and Ken Montes from NuLiv Science join the show to peel back the curtain on the real business of supplements — from the show floor at LA Fit Expo to the factory floor and all the chaos in between. The crew breaks down how brands actually break through, why transparency in manufacturing is becoming a competitive weapon, and how the old “secret sauce” era is dying fast. This episode gets into everything from rising protein and creatine prices, tariffs wrecking supply chains, and why brands are being forced to rethink formulations, to how patented ingredients, research, and long-term partnerships separate innovators from imitators.

Thank you Richard and Ken for coming through to the pop-up podcast at the Ritz! Always a pleasure chatting with you guys. Keep crushing it out there! 

Intro

Keep it good, got to keep it real dog. Keep it turned up, got to keep it real dark.

Don Grace

Well, thank you guys for coming out here today. We really appreciate it.

Ken Montes

Of course.

Don Grace

It's always good to see you guys.

Ken Montes

Yeah. Always good to be in home turf, right?

Don Grace

Yeah, this is this to me is kind of. I look back like 12, 13 years ago, and I think of um, what was it, the perfect bar. And they had the whole family at the booth. And it was when they just started. And it's before they had major distribution and all that. I think they just got into Whole Foods. And that's the type of show this is to be. It's the type of show where you have that one particular brand or multiple particular brands trying to get into the marketplace. And they kind of like make that splash here at the beginning of the year, and they kind of forge their way through. And you kind of have that every year here. And this year I look at this show and I look at like Ferrell, for example, and it's like that's that brand, you know? And I get tingles when I think about it because I've known Jeff for a long time, and great guy. Couldn't happen to a better group of people over there between him and the uh brothers.

Ken Montes

Well, it's funny you say that because I feel a lot of people start neglecting the LA market. And I don't know if if obviously Farrell's not from here, so they're willing to go across country and set up, and then you know so many brands that are local and they're not tapping into this local market. And I don't know if it's now because everyone just lives on the internet and no one thinks like, hey, own your own market, you know.

Richard Wang

But LA LA fit kicks off, you know, the whole cycle of shows for our industry, right? Absolutely. I mean it's January 10, I think, right now. And uh, you know, it you it's based on foot traffic, it's pretty busy, right? Yeah, I mean, it's obviously not the Arnold, it's not Olympia, but not the biggest show on terms. But in terms of consumer fitness shows, easily top five in the US, right?

Ken Montes

Yeah, I would think so. I've been going to it since I was in high school. And for real, for real. We're used to be like 15, 16. It was the funnest weekend we thought. But before the brands used to give you so much stuff, so you came here with bags, and you're like, all right, I know I don't need any supplements till March because someone's gonna give me so many samples, and I'm gonna try this Endo Explode, I'm gonna try this freaking red line, all these different stuff, and then you try it and you're like, All right, they gave me so many samples, I'm good for a month, and then you try other samples, and then you found brands you liked, and you go, Oh, I would have never tried this flavor. But it seems like no one wants to give anything away now. And is it just that expensive to make samples and no one wants to give that away?

Eric Simpson

Things are a lot more expensive nowadays, so people just don't want to, you know, have to cough up the extra funds. I mean, doing these shows, the the booth alone costs more and more every single year. So I can't really say I blame them, but you know, there's still some of the brands out there that are dishing out, you know, free goods for the consumers to try.

Don Grace

So it's yeah, it seems to come with like a line.

Eric Simpson

Yeah, I missed the red line though. I I missed the original red line. It's funny you bring that up. DPX is back when the you know ingredients were you know legitimate, those those were good.

Ken Montes

I remember uh the the first time it was like uh 2013 was the first time I did LA Fitx before New Lib. I remember pitching red line, and I was like, Oh, I have this astrogen. He's like, What's that gonna do? Grow my ass? And this is like right, yeah. I'm pitching, I'm just like, no? What if someone wants booty games? So I was like, No? And he was like, All right, all right, just give me your card. He was just busting your Yeah, totally, but I just didn't know if it was like, is he being serious or not?

Eric Simpson

Dude, the first time I ever tried a red line, I remember like it was yesterday, I bought it at a mobile station and I downed it. And I remember calling or texting Don, and I said, Man, I just had a red line. And he said, Don't drink the whole thing. And I started freaking out because my bottle is empty and I'm seeing the beads of sweat coming down my face in the mirror. And let me tell you, that was the first time I actually thought I was gonna die after having a freaking energy drink. I mean, they just they don't make them like that anymore.

Ken Montes

Does anyone ever come to you guys with an old product and say I want to make it like it's old form?

Eric Simpson

Yeah, like we do get that before. Yeah, we do get that. And obviously, there's no replacements for some of those older and what about uh drain, what is it, geranium oil?

Richard Wang

Do you guys get pitches for that? Like, hey, can you make my product with that?

Don Grace

No, no, uh, I mean, unless you see some of that, I don't see any of that.

Eric Simpson

No, no, I I I yeah, it still comes across the table. Like, I actually had uh a gentleman that hit me up on our info line, which I review a lot of our inf info emails to see if it's worth our time, and then either I'll take it on or you know, I'll dish it to some of our sales managers to see if they want to take it on. But one of them I looked at and I I went on their link on their website, just about anything and everything that's banned in the world was on this website. I'm like, yeah, sorry, we can't help you out there. So yeah, it had all the uh old school stuff on there, which is crazy that some of the stuff is still out there selling.

Richard Wang

It's wild. For L for LA Fit, would you say you guys have a lot of clients here, like a a good amount of the booths were uh Simpson Lab clients?

Don Grace

Yeah, yeah. It's nice to see a lot of these um newer brands out in the marketplace. Like earlier, there was one of the brands that we work with that you don't know, and now you have that kind of connection, you have that kind of conversation where they might be at a certain place with their brand and might be real okay, how do we make the most cost-effective product here? Which is great. And then as you get the product going, it becomes bigger and bigger. People start saying, How do we make this product a lot better than the competition? And that's obviously where I feel like that conversation comes in with you guys. We can use the estrogen, we can use those patented trademark ingredients that you guys have to elevate that particular brand.

Ken Montes

As you guys have been expanding your media, do you feel um like when I first started working with you guys? Not every brand wants to say where they manufacture, right? Yeah, yeah. But it's just that now they want to hide that, right? But now it's you said people want to kind of say, I manufacture with you guys, because you guys are building your own stage and showing, hey, this is top-notch manufacturing. Are more brands or your newer customers open to sharing I manufacture a system?

Eric Simpson

Yeah, they are. And and you're not wrong, in the beginning, yeah, when we first started 10 years ago, it was like that. Nobody really wanted to, you know, know where people were manufacturing their stuff. And you know, I would get the same thing, well, oh, this guy's my competitor, this guy's my competitor, and I don't want them knowing that we're working together. Look, at the end of the fucking day, everybody is a competitor with one another, so it doesn't really matter. But as time progressed, and and you know, we were you know blessed to be able to grow the way we have organically over the last decade, you know, we we started getting you know more entwined and more connected and more you know personal relationships with a lot of these brands that we're working with. And they most of them are open to you know doing content and showing where the product's being manufactured, which you know it's it's definitely very humbling that you know our brands would want to let the world know where their stuff's being manufactured. But to go back to what you're saying, you know, in this day and age where everything is so transparent, yeah, it's almost like, well, why don't you want to tell me where your products should be manufacturing? What are you hiding? You know, people want to know that their products should be made in a you know certified quality manufacturing company like ours. We open up our doors. I tell our customers all the time, even if they don't want to post about us, if they don't want to mention to their you know consumers who they're manufacturing worth, that's fine. But I still want them to come to the shop, meet the team, do the tour, look at the facility, because we want them to leave warm and fuzzy when they leave, knowing that their products being manufactured, you know, in a nice clean establishment.

Richard Wang

And get a Rams game in.

Eric Simpson

Rams, Chargers, you know, Dodgers, Lakers, Kings, you know. We we we try to have fun with it all.

Richard Wang

But uh, you hit a good point. I I remember for a longest time, people they pretended like they it was some kind of secret sauce. Or it was their own lab, they're really. One of the first contract manufacturers was like, okay, here's our line, here's the customer walking through our line, putting it out there. Uh, nothing to hide, right?

Ken Montes

Nothing to that's what it is, nothing to hide, yeah.

Richard Wang

And then now you're seeing Brands like, yeah, we manufacture this coal man, we manufacture Simpson. Like, it's something it's more of like an asset now versus something like that was hidden as a secret before. Yeah. Yeah. I think that's part maybe of what you guys are doing, and hopefully also part of the transparency. In that age of information, everyone kind of knows a little bit of everything.

Ken Montes

Well, in other countries, it goes even further. Like, if you pick up a legit product in Mexico, it has to stay in the back where it's manufactured. So as a sales guy that's selling ingredients, I could turn everything around and go, oh wow, I know exactly who to contact to sell my ingredients to. Right? It's not like I could turn around a product, oh man, it has Eric and Eric's email. But like in other countries, it has the email and uh has the lab that made it, besides the brand that's selling it. So I think it it just seems more and more transparent, and uh it's more uh confidence for the consumer to say, okay, this is gonna work for me. Uh I look at it as in like the the feel protein you guys make, right? Like to me, when someone asks me, do you give that to your kids? I'm like, dude, I know who the fuck makes this. Like, I go, I could probably ask him, like, hey, who worked on this batch? Yeah, like how you know you can't say that about most things you give your kids.

Richard Wang

Absolutely. When you feel as in Panda feel, right? Yeah, there you go.

Eric Simpson

Shout out, Murp. Yeah, they're they're a great group to work with. Yeah, yeah. Yeah, Mirbah, Jeff, those, or Tom, excuse me, those those guys are um super amazing. But yeah, uh back to what you're saying. Uh back in the day, you used to have to put who was a manufacturer, and then it changed to, well, now you just have to put the city and state in zip code, and that was mandatory. And now I think all of that is just out the door. Well, it seems just like the wonderful.

Ken Montes

Yeah. Like, hey, if you want to get a hold of those PO box here, you know, existing nowhere.

Eric Simpson

But now, and in this day and age, though, it's kind of hard to hide everything because you know, if if you're using just generic materials, you know, whatever, but if you're using patent ingredients, everyone's got to sign TMLAs, yeah. Right. Which means that whole company knows, oh, well, this guy's making this guy, and then this guy's gonna talk to this guy, and eventually people can start asking questions and asking around, you know, in our industry. It's a small industry, but a big industry at the same time.

Ken Montes

They'll find out who's what that's one of the reasons I bugged him so much about doing media that I was like, man, there's media channels out there that are hey, look at this new brand thing, but dude, we've known about that product for a year before it hits the shelf because they had to sign the trademark, right? But we don't have a media channel to say, as soon as this hits the shelf, let's put out a video. And that was our plan. We're like, hey man, all these media channels are so late to the game, and then they think they're huge influencers in the game, so it's like, why not let's talk about what we know? And obviously, we can't say disclose what a customer doesn't want us to disclose, right? But now we're able to kind of time it more where all right, this brand is gonna launch something and it has our ingredients, so we're able to talk even more about the product and launch with them, right?

Don Grace

And I think our relationship, the relationship we have together, it all coincides with that. So if you have Alpha Lion in town, maybe he comes to our manufacturing plant for a day, does a tour and stuff like that. We're talking good about you, you're talking good about us. Next thing you know, he's at your facility, yeah, right? He's on your podcast, he's doing the podcast. I feel like it all kind of connects, it's like a whole ecosystem now, and I love it. I actually love it because the transparency and people being able to like see it now, it's it's it separates you in the marketplace. And it's like, okay, we want to work with those guys because those guys are making the best products, dude.

Richard Wang

Uh so Joe Rogan's uh clip recently with uh Bradley Cooper, they're talking about comedians in the 90s, right? It was cutthroat competition. Everyone's backstabbing each other, right? Because everyone's trying to get that one sitcom deal or that one tonight show host, right? Where is uh comedi uh comedy these days is about like, okay, if he's funny, he comes on my podcast, I go on his podcast, everyone work together. Your competition now is in some ways you're also your assets, right? Like everyone could could grow together, right? Alright, like when you said our industry is big but so small at the same time, right? So, like someone in another brand might go to another brand, uh, you know, you know, there's little there's some musical cheers going on in our industry, right? So you never know who's where that person's gonna end up. So long as you're smart about it, you take a long view of things, uh, you'd be a generally a decent human being, a decent business person, like it's gonna work out in the end, you know. Yeah. I I like that part of it.

Don Grace

I don't like the musical trolls. And the musical trolls are the people who watch this and you know who you are right now, and I am talking about you. Long story short, when they watch the podcast, they're all of a sudden trying to quote our clients' products. Oh and it's just like like you're that lazy. Yeah. So you mean go out, go out, go out and actually work for it. You know what I mean? Like go out and work for it. It's all good, it's all good.

Ken Montes

I mean, it's all you're saying, brand ABC, right? And and I'm another manufacturer and I saw brand ABC on your podcast. But they just start quoting it. And I didn't even know the owner before.

Don Grace

They start quoting them at prices that aren't even realistic.

Eric Simpson

So it's like just a game. Wow, it's a game. People, you know, they'll get you in the door, you know, after the city. So there's the good, right?

Don Grace

And there's the ugly or the indifferent. That's something that we need. So that's I never thought about that. That's something where like we were actually just talking about it before you guys came on here, and I'm like, wow. I mean, that guy's as he's that lazy.

Ken Montes

As you're building, you're kind of exposing, hey, this is the main contact of this brand. Yeah, and now that lazy sales rep is like, well, I'm just gonna contact that guy that I saw on the podcast, right? Oh, paper ripping this. I saw a supply side. I told Richard, I was like, whoa, real is fair, boys.

Don Grace

Keeping it real right here. Keeping it real guy.

Ken Montes

Real is rare. I saw a lot of brands using our playbook from 2023, 2024. And I was like, okay, well, at least pay us something, or or watch what we do, and it's gonna be you're gonna be doing it in 2027.

Don Grace

But it's it's it's it's it's you know, it's it's a compliment, right? Yeah, yeah. At the same time, too. Um, I look at my team, I look at who we have working for us, and we can check every box and every department. They're not gonna be able to compete. Yeah, and I love competing. And I think that's that that's where you win, is in the marketplace. Who's gonna win in the marketplace? Yeah, at the end of the day, when you have a team of people around us like Eric does and myself, I can promise you we're gonna eventually beat you. Like you were saying earlier, right? Yeah. About the whole Chinese philosophy. Go ahead and share it with the room.

Richard Wang

Yeah, well, you know, we were in the uh, first of all, I I do have to fully disclose we are in the rich freaking Carleton. So my first time ever stepped into Rich Carlton Lounge, I didn't even know there was such a lounge, and it's free alcohol. And it's free orders. I'm like, holy crap, right? So, but we we were talking a little bit there, and it was like to go on a slight tangent here, you know, right now we're in a kind of in a in the middle of a trade war, right? So to speak. But when you look at certain cultures and certain institutions, uh they don't follow our election cycle. So they're not they're not beholding to a two-year, four-year, or even eight-year term. Yeah. And when you also look at certain cultures, uh, you know, they're willing to take a very, very long view on things to win, even if it means 20, 30 years to win. Because the culture has been around for, you know, 10,000 plus years, you know. So it's something that running a business as you guys run your business, right? Instead of taking a short view of how you you uh treat customers, how you treat your team. Uh likewise for a new life, I'm like, I don't we don't need to extract uh we don't need to extract everything, and we don't need to pursue maximal shareholder wealth. Uh I think enough is there's enough to spread, especially as the tide is rising, right? And there's all ships. So I think taking again, taking a long view, like long game. Uh you know, give a good example. There's a brand that we've known forever now, for going back to 11 years. I think just now we sent them a sample, you know. Long game, huh? 11 years of talking to this person, right? Finally took he he took a sample finally, right? So um, and we just see like if we're gonna be in this space for a while, hope hopefully, God willing, for a long, long time, then I mean we may work together six months from now, we may work together. Me, we may work together six years from now, we all know, right?

Don Grace

Yeah, so yeah, but also the long game too is like we're not looking for any strategic investors, you're not looking for any strategic investors. We're in a place right now we we've worked our whole life to get to this point in business. And I I think everybody's been you know successful independently in this room. Uh but doing it with a freaking team of people and and and you know, being the best for quality, being the best for regulatory, being the best at sales, being the best at fulfillment, it's it's just it's awesome. And when winning with a team like that to me, that's the ultimate in business. And that's like to me the long game is like the long game is yeah, like we're at a point right now with the business where it's like you've worked your whole life to get here, you've worked your whole life to get here, and we're having the best time we've ever had in our career. Yeah, and it's like I the investors and stuff like that, yeah, I have no interest.

Richard Wang

I think I think when we're at events, I see Jesse, I'm like, whoa. It's rare to see like a uh operational person hanging out at a client facing an event, you know. I love that. So for you guys to just be able to extend that, I think that's pretty cool.

Eric Simpson

Yeah, no, Jesse's great. You know, we we worked together at the first company we were at, you know, years ago, 15 years ago, and he started off in shipping and receiving. So to see where he's grown from that position to now being, you know, vice president of operations, it's you know, kudos to him. He's worked his ass for that. He's a VP title, he's got a VP title. Yeah, so yeah, we we've been bringing up to all the shows for years, you know, meeting with the clients, you know, just kind of understanding, you know, more outside the operation, but what it takes to get the customer from beginning to end from everything. So yeah. Uh when we first opened Simpson Labs 10 years ago, you know, obviously Jesse was one of the first hires. It was just him and I at our first Expo West trip in Anaheim. And it was just him and I. It was it.

Don Grace

And full suit, by the way. He had a full suit on. No, I'm serious. Have you ever seen this dude in a suit at all? Never.

Eric Simpson

I got a picture somewhere, I'll dig it up, but it's it's rare. Overlay. Yeah. But uh once I got that first. It had to be one of the suits, too.

Ken Montes

The zoo suits.

Don Grace

I mean, nobody can believe this, but I had to get it out there. Eric, back to what you were saying. I'm sorry.

Eric Simpson

But yeah, it was it was pouring fucking rain. And Jesse and I spent so much time. Back then there was only 10 of us. There's only 10 employees, so we had to do it all pre-way, blend, fill, pack, whatever it was. Him and I came with boxes and boxes of samples of packets of proteins and pre-workouts and aminos, and they were all labeled. And we sat through and passed it out to as many people as we possibly could at this show. I mean, we're just drenched soaking wet from the rain. We're passing out samples left and right, and it got to the point where like nobody wanted to talk to us, nobody gave two shits who we were, and it was just it was tough. But we powered through it and we we we did the whole weekend with it. And then as time progressed, you know, things changed and we started getting our names out there a little bit more, and now people started wanting to work with us, and now the attention was kind of you know on the opposite side, which was super humbling. But I I say that going back, you know, Jesse he saw what it took from the very beginning just trying to get samples out and what we had to do to get our name out there in the end. Industry, and luckily it ended up working out. And he's been coming to you know majority of all the shows with us, you know, since day one. So it's it's been great. But yeah, he actually goes to more shows than I do. He does. It's rare that I exit California to go to any type of show, but you know, Jesse's always down to go to all of them. So I'll rip the upside.

Richard Wang

Yes. I mean, Ken came on in 2012 from a Craigslist ad. Yeah, tell us more about that. So about the Craigslist? Seriously? Yeah.

Don Grace

I think you're a part of the team. Because honestly, before I met you, I thought Ken was the owner of the company.

Richard Wang

He looked like that.

Don Grace

He was at every single trade show and he was everywhere and so on and so forth.

Richard Wang

So I put a Kriegsless out. Yeah. Because we couldn't even afford Monster.com back in the day. Because it was like five bucks to put an ad out. We hired three people. One person literally could not put a shoe together. I remember the shoes are mismatching. That was crazy.

Ken Montes

He had like a round shoe and a like square shoe. And a box shoe.

Richard Wang

So Ken won that battle. This is 2012. Ken's working the doors, right? Because we were selling, we were trying to sell the um practitioners at the time.

Ken Montes

Yeah. Oh yeah, I was going to chiropractors and acupunctures trying to sell them cordyceps.

Richard Wang

Yeah, because we took cordyceps, we put in little capsules, right? And after like doing like six months, he's like, man, this job effing sucks. Like, put me on something else, right? So we started doing ingredients, and then him and I ran like our social in like 2013, 2014, right? So I mean in 2013, we're doing athlete uh uh outreach influencer outreach, right? We and like we going back to what you said, like it's just like building block after building block. There's no growth without discomfort, right? Um so I think when when you guys talk to your brands, right? When other people go, oh man, Eric Dying, dude, you guys are at the risk, well, like, bro, it took me 25 years to get here, right? It wasn't like overnight, you know.

Ken Montes

Yeah.

Richard Wang

So I think there is there really I I say this all the time, like if it's if it's hard, it's probably good. But if it's easy, then anyone else in the world can do it, and then it's not good anymore. Cause so I I always I always preach this team. If it's if it's hard, man, you're probably onto something, you know. But so just keep at it, you know. But we again we have to have that long view of like grinding, grinding, grinding smartly, but eventually we'll get there, right? Yeah, and look at you guys now, everybody knows who you guys are in this industry.

Ken Montes

Yeah, we're trying to. I I always do think that at least in sports nutrition, we have the the people that care about their products covered. If they don't care, like I mean, it's not that we don't care, but it's like, all right, man, if you don't care to have astrogen in there, that means your customers doesn't care. And it's not gonna hurt us, it's it's eventually. Well, that's the way we look at it, eventually.

Richard Wang

Uh Donnie brought this up in the uh fancy lounge. There's brands that start out and as they grow, after they prove the as as you I think you said you can say it better than I can.

Don Grace

Well, as they get to a certain point, it's like, okay, I want to work with this raw material company because they are working with all the premium players in the marketplace, and I want to work with this manufacturer because they are working with all the premium players in the marketplace. And that's going back to what we were saying earlier with the transparency and everybody being able to see who you're working with on these collaborative projects. Um, I will say one of the best projects we did this past year was with um with the C Bomb and the Raw team and Ike and all them over there. That was uh that was an amazing project. It I mean, that was the best man we ever got on social media, right? I want to say that was a lot of the hits. Yeah, yeah.

Ken Montes

Ike was my first customer. Same same thing. That's right. LA Fit Expo. I came up to him and there was uh they had just split up and become uh pro subs. And I was like, hey man, I'm brand new. I just got started. He goes, Let me see. And he's like reading the business card. He goes, uh, we're we're brand new too, man. I'll give you a call. He calls me the following week. He's I'm gonna make this product. It was an NO drive three, it was astrogen and synactive, yeah, capsules. And one of my first sales was like proceps. I was like, it was so cool. I was like, Whoa, it worked. I talked to them, he gave me his card, I sent info, some samples, and it ordered.

Richard Wang

Yeah, I got you started. Yes. Oh, you owe him one. I know.

Ken Montes

I I can TJ. That's why that's why I always like always uh love seeing what he's up to, yeah.

Don Grace

Yeah, he's doing great. I mean, they're doing big things over there. That that whole uh company is on a whole nother level. Yeah. When I look at like as far as brands and as far as brands that have kind of separated themselves in the marketplace, yeah, they've they've you know them and they've kind of crossed over to that first form status now. They're like that's like the pillars and the major those those two Jocko, those three would be like three of the bigger pillars, I think, right now. Yeah. What do you guys think? Bucked up's huge. I know that's the one when you guys do a lot of bucked up's doing really good.

Richard Wang

I think in the powder business, you got ghosts still, yeah. Bucked up obviously, yeah. Bucked up, um, course raw, first form. I mean, who else would you put up there? I mean, Alpha Line's coming on the D D to C side.

Don Grace

Yeah.

Richard Wang

Uh I mean animal's been animal for 20 plus years.

Don Grace

Yeah, EHP's been EHP. They've made a huge splash.

Ken Montes

That's true.

Richard Wang

I'm sure there's a few. I mean, gorilla mine went like this, and then they kind of leveled off a little bit. I mean, who else would you throw up in there?

Ken Montes

I don't know, it's it's hard because it seems like as supplements get more popular, it's almost like clothes where you're gonna go to your demographic. Right. Right? And um, and it's so personal. I don't know. I I always think supplements it's really funny because it's the person that owns a supplement brand, it's almost like, I'm so fit. I need you need to take what I take, you know. So it it it it becomes so weird because it's like a go off on a spot. Oh yeah.

Don Grace

Well, it's not relatable for us. Yeah, because it's that you want to buy from somebody who has four kids or two.

Ken Montes

Not not necessarily God, it's more of a of what I've never understood, and it's the blessing in the industry that one brand gets to a certain point, and sometimes there's someone working within that brand that says, No, I have a better idea. Like we all know brands that are huge today that just spun off another brand. Right. Right. And my what I've always seen is that man, it's the what I tell our sales guys, you gotta sell to the ego. You tell them, hey man, you use astrogen, you use an active, and now it's just marketing versus marketing. And every person goes, yeah, and then my marketing is the best. So I just gotta manufacture a Simpsons, so manufacturing is even, you know, use the same ingredients, so now we're even, and now it's just marketing versus marketing, and then they go at it like a Nike and Reebok, like a Nike and Under Armour. And I feel like that's where supplements get to, where they get to a place where all right, manufacturing is at an even kill, ingredients even kill. Now it's just marketing versus marketing.

Richard Wang

There's another huge brand flying really low right now, transparent labs. Oh, yeah. Yeah, they've they're they've they're I'll say top five in the powder biz. Yeah. Um it's hard, right? Because nobody's a lot of them are privately held where uh investment held. Uh but we're talking about brands and you know, at the was it nine figures or above level game, excluding drinks, you know. Rise is up there, but I don't know what their powder is, you know.

Don Grace

Yeah, that that's also they made a huge splash rise. Yeah. I feel like you know, a lot of people start on the supplement side, and this is the interesting part when you think about it. If you look at all the biggest beverage brands out there right now, the majority of them all started on the supplement side. There were supplement brands first, and then they became you know beverages second. And then once they got into the beverage space, everybody knows this. You need a strategic in the beverage space, otherwise, you're gonna get destroyed. And all the ones that I know of have found good strategics, and it's allowed both businesses to grow the right way. Yeah. Now, when you don't have that, you have the supplement company just getting drained from the beverage company. Yeah. Because it's just it's a war, the beverage space. It's not, it's not easy to make it in the beverage space unless you're in with Anheuser Busch or some of the the AGO, some of these larger alcohol distributors. It's very, very difficult to make it in that space.

Richard Wang

I remember when we were talking to Dan when he came to us and he had a uh idea. He's like, he's launching his energy drink. And then he said, Don't worry, because we're like, man, energy drinks are hard, right? Yeah, we we don't know anything about food and beverage. And he's like, Don't worry, I have a marquee uh uh partner, distribution partner. We're like, I'm like, what is I had a Google like what does marquee mean? You know, like oh but then like oh, you know, like that's great. Six months later, like, oh okay, it's ABM dev, like, okay, yeah. Like it it's kind of it's kind of hard to go wrong when you already have access to that many uh C stores and locations.

Don Grace

So they they had that relationship though, and they kind of they backed off on it, right? So they had that relationship at first.

Richard Wang

Now it's KDP, right? Right.

Don Grace

So they basically went away from the A B A relationship, right? And they went to KDP. Which that's that's that's pretty powerful. I mean, he basically told Anheuser Bush to go punt.

Richard Wang

Well, well, you like when you say you need us you need a really big strategic to hang back, right? Especially strategic, as he said, uh specializing in cold, right?

Ken Montes

So I I would I think the sodas companies just have more distribution at the end of the day than an alcohol.

Richard Wang

Yeah. It's January 10th, 2026. What do you guys see happening this year?

Eric Simpson

You know, more efficiencies, you know, more build-outs, more analytical testing, uh, more podcast. Yeah.

Ken Montes

With protein, is is uh way going to outperform clear? Is clear here to stay?

Don Grace

Is uh it's it's all about how much they could actually make, yeah, right? So supply and demand right now, there's just not enough supply and the demand's to the roof. Like we got a we got an email yesterday. Oh, guess what? You know, I'm not gonna say the manufacturer of the actual raw material. Oh, they got the Starbucks deal, so all your isolate proteins going up. Like it's just wait, really? Oh, yeah, absolutely. We got the email yesterday.

Ken Montes

So is Starbucks getting a deal with everyone?

Don Grace

Starbucks supposedly consuming a lot of the isolate in the marketplace, therefore people's prices are going to go up.

Eric Simpson

WPI 90? Yeah. Yeah, but a lot of WPI 90 also is being used to make clear. So a lot of the clear beverage, you know, companies are part of the reasons why there's such shortages and why the cost is up there. Not to and then on the concentrate side, concentrate, WPC, you know, all the functional foods now, you know, your cookies, your brownies, you know, all those different aspects. The the bars, it's just consuming so much of the allocations, and these protein manufacturers, they just can't keep up with supply and demand. So price just keeps up. It's only going up.

Don Grace

Yeah, so we're we're doing a lot with other ingredients now, like the beef proteins and things of that nature. Um, it's the milk proteins. Like we're trying to find alternatives for our customers. So we have a lot of good things done in RD already with alternatives. Um, and then obviously putting some collagen in there as well too helps maybe do a 50-50 blend or 75-25 blend. But yeah, it's not, I mean, protein pricing is gonna continue to go up from what we can see, and it's not coming down anytime soon, unfortunately.

Richard Wang

Because it would you say it's tripled in the last five years? WPC 80. Oh my god, definitely. Oh yeah, definitely, but protein prices haven't tripled to the consumer. I was thinking about Target like two pounds.

Eric Simpson

Everyone's taking haircuts, like us as a manufacturer treating our margins. You know, it was already tight as it was to get from the get-go, now it's even tighter. And then, you know, you got the actual brand owners that are making less margins, you know. It just it all trickles down. And yeah, the consumer is getting hit with some of the additional costs, but not as much as you think that they're probably getting. So it's just you know, it's just a balancing act. I mean, some some of these brands are not budging on their pricing and they're just trying to just wait it out, which I don't think is a smart move this year because as you know, Don was saying, the price is going to continue to go up throughout the year. So you mean they're not budging like on their website price? Yeah. Oh but I was actually shopping around a vitamin shop the other day, just grabbing some you know, samples to uh work on or get some of our drinks, and you know, I act like an idiot when I'm at vitamin shop. You know, they just talk to me. You know, they don't know who I am. They don't know how to do that. Yeah, they have no idea, they have no idea. And these guys they'll try and sell me stuff and this and that, and I'm like, first off, you have no idea what you're talking about. But second off, I just was asking them like, hey, have you seen any protein prices go up? They're like, oh my god, yeah, like all these proteins are going up. We got this five-pound tub over here, it's going up $25 a unit. And I'm like, oh my goodness. So it's definitely trickling down to the stores as well. But you know, how much? I it's hard to say.

Richard Wang

So if you're a brand and you guys are seeing that it's not going down anytime soon, you're gonna have to start, I guess, making strategic compromises?

Eric Simpson

Yeah, we're just we're we're alternative proteins. That's what Don was saying, yeah. Alternative proteins, different combinations, you know, trying to keep with the same elemental, but most importantly, making sure that the taste is there, the effectiveness, you know, the dissolvability. There's there's a lot of different parameters that you know have to take place in order for it to meet the criteria.

Richard Wang

So remember we were talking to Kyle, it was the perfect day? They had like a different protein. Yeah. So he was saying that uh as WPI keeps going up, uh their pr their proteins sort of make it into the supply chain because it mimics WPI 90 in terms in terms of what non-dairy way. Yeah. Yeah.

Don Grace

I mean everybody wants a non-dairy way, right? Yeah. So it's kind of like a dream come true.

Richard Wang

It's kind of like a Ferrari at a Honda price.

Don Grace

Right, right, right, right. We've actually fortunately the RD team here, we got some really good mixability and taste on that product. So yeah, that's something that is very similar to the way, like the mixability and taste.

Eric Simpson

So yeah, we've used it before a few times on a couple projects with Kyle. Um, yeah, good product. Good product. So I think he's sold out for like two years though. Yeah.

Don Grace

Right? Yeah, like they're committed for like two years. That's crazy.

Richard Wang

So are you guys allocating your customers on protein production?

Eric Simpson

You know, it's it's it's tough. Yeah. Uh, you know, a couple months ago, all of a sudden it's like WPC skyrocketed overnight. It just happened at a left field and everyone's scrambling and freaking out. And meanwhile, all these protein suppliers are sitting there waiting to see, okay, well, who's gonna put the benchmark? Who's gonna set the price so all the rest of the guys can follow and make sure that they're you know being competitive with the market with everybody? So it was about four weeks before the industry found out how much WPC was actually going to go up. It just kept trickling, you know, a quarter, 50 cents. No, it's gonna be a dollar. And all of our my customers, you know, are sitting here like, oh, we need updated quotes. I'm like, I can't give you updated quotes because we can't even confirm what the price is gonna be at yet. So it was real dark for about four to six weeks until we were able to finalize the pricing, get a bunch of trucks locked up for Q1 and Q2, and then we could start reissuing, you know, updated quotes to everybody. And man, jaws were dropping, people were crying, I was crying. I mean, it was you know, a big cry fest and it sucked, but you know, all we can you know do is try to, you know, work with each other the best we can to keep the pricing, you know, as low as possible and you know, still maintain that top-tier quality. So it's uh yeah, proteins are gonna be tough in 2020.

Ken Montes

Didn't creatine have a similar problem like a year or two ago?

Eric Simpson

Yeah, the pandemic, yeah. I mean, I I think one of the one of the major one of the two major uh creatine manufacturers that were out in China shut down during COVID, and then when they were trying to bring back the staff, most of them either worked somewhere else, or I don't remember how it went down, but I think that factory ended up closing. So now the whole world was shortage on their creatine aspect, and it it was really tough. I mean, we went from paying four bucks a kilo for like ever since I could fucking remember. I mean, the shit went all the way up to nearly like thirty dollars a kilo for creatine on a hydrate, creating, yeah. It was nuts. We were prepaying containers, like a half a million dollars. Yeah, it was insane. It was insane. Meanwhile, it's normalized now, right? Yeah, everything's stable now, but I keep telling my staff, my procurement team, keep stocking up. I want hundreds of thousands of freaking pounds on order at all times. Because had I known then what was gonna happen, I would have put every dime in the world that I had to my name and bought as much creatine as possible.

Richard Wang

We're seeing creatine uh go from like a bodybuilding supplement into like everything. Like my wife takes creatine from that.

Eric Simpson

All sorts of studies now, you know, from hydration health, you know, um cognitive functions. There's there's just so much studies.

Don Grace

Booty building, we have a client that puts it in an actual mold for a butt. Oh, yeah.

Eric Simpson

Oh, I'm serious. Um the booty jars. Yeah, it's it's uh one of the studies, and now they're you know, it's going from five grams, and some are doing claims down 10 grams, 20 grams, so you know the material's gonna, you know, consistently still have high allocation.

Richard Wang

How do you guys balance uh supply chain forecasting? Because if I was in your shoes, I'm like, okay, I need to buy as much protein as humanly possible, but you can't commit all your capital to just it's a science and an art form. Yeah.

Don Grace

It really is. It's it's hard to do.

Eric Simpson

We we've done good decisions and we've had bad decisions. Yes. More good than bad. But you know, we've learned year after year after year, quarter after quarter after quarter. So, you know, you just gotta hed your bet when you feel the time is right. So it's it's it's not an easy decision by any means.

Richard Wang

So in 2026, protein prices will continue to climb. In 2026, protein prices will continue to climb. Yeah. Creatine prices should remain stable.

Eric Simpson

I I think they're gonna stay stable, yeah. And you have other other, you know, brand uh manufacturers out there that are now coming out with their own patent creatines, which I I think is gonna be good for the marketplace. But um, yeah, I don't really see creatine going uh crazy.

Richard Wang

Is there any other things in the supply chain you see like all you guys should pay attention to this this year?

Don Grace

Uh I mean we're we're trying to pay attention to everything, to be honest with you, you know. Um on your end, is there anything that you guys see with your ingredients that might be going up in price? Anything fluctuating?

Ken Montes

Uh I mean with with tariffs, hopefully they're figured out, but I think that's what threw a curveball to us the most last year was tariffs. And then trying to Richard did a really good job at absorbing the the cost as much as possible. Right. Until they're like we used to they go, wait, wait, are you are they gonna stop with these tariffs? They kept going and going.

Richard Wang

Yeah, I think everyone had a uh short-term outlook uh that oh this might be gone in you know a month and it it didn't go away. We're like, wait, this is here to stay, you know. Yeah. And once the government's getting money, like how once any entity is getting money, how you can't turn off that uh spigot belt? Like, why we stop getting money? It doesn't make sense, right? Yeah. So I think it's a permanent part of our uh landscape. Well, supply chain.

Eric Simpson

You know, we're quoting products and ordering products that are you know, let's say five, six hundred dollars a kilo for some of these patent ingredients, and then that's what we're quoting. We get the POs, we send them to the to the raw material supplier. Oh, well, there's a 40% tariff, you have to update this to you know eight hundred dollars a kilo or seven hundred dollars a kilo. I'm like, what the fuck? Wait, have you actually seen that? This happens increase every week. Every week. Wow. Yeah. And half of it's probably fucking bullshit. We don't know the truth. We don't know. Oh, is this accurate? Like, how do we know you're actually being charged all these tariffs? There's no way to actually know. So we're Gotta roll with the punches. Now we gotta go back to our customers. I'm sorry we have to update your you know original sales order because we're getting hit with tariffs. We have to pass a buck along. So it's just been a complete shit show with all those tariffs the last year or so. Who knows? I mean, that's definitely been extremely challenging. Keep safe on our toes. Yeah. Yeah.

Ken Montes

Yeah.

Eric Simpson

I hope Newley doesn't call me and say we got some tariff price.

Ken Montes

Just maybe let just one price increase, one big price increase.

Don Grace

So so as far as like ingredients go, I feel like you guys are always on the forefront of innovation. So a good question to ask is like, what do you see for innovative ingredients and trends for these uh next year or two? What would you say the industry's leaning towards?

Eric Simpson

Hmm. Anything new and exciting that you guys are working on?

Ken Montes

I don't know to me, it seems that uh I I I question how a lot of the companies have teams, and I'd like to be a fly in the wall and hear like, do some companies just uh we use that, just wait for another company to set the market and then just copy them? Or is there a strategy going on? Because sometimes it seems like an idea comes out of the blue from a brand and then everyone else kind of follows suit. And I don't know if it's just to try to grab it to that market share just because it's easy. Um, but for us, it seems like every category it's developing, and then once it develops, it starts getting then more precise, as in let's say um uh weight loss. You go, all right. Well, yeah, we have an ingredient for weight loss, but for for on for us, InnoSlim was kind of like, well, we might have to shelf InnoSlim for a little bit because all the GLPs, right? And with GLPs, how are you gonna tell someone I'll take this capsule instead of the shot? So, what we saw with like let's say with GLPs that that category went down for a little bit for maybe about a year and a half, and then started picking back up because then everyone was saying, okay, all I have to do is put GLP on my capsules. So then they started going, okay, instead of ketosis, the word is GLP. You know, instead of low carb is GLP. So then it feels like each category has to develop its own marketing, be established, and then becomes specialized. And that's where we come in to be like, all right, we have an ingredient for this particular market. Like if you really want to see collagen synthesis, we have this. If you really want to see sleep, we have this, you know.

Don Grace

So for like GLP1, for example, is there anything on the ingredient side that you guys would lean on for ingredients that would support that? Like with us, obviously, it's increased with all the protein sales. And there's certain you know, products that we make that we feel like the ingredients might have a good impact for the GLP one. Is there anything that you guys see on your end that's yeah, we are studying in a GLP one for GLP one this year?

Ken Montes

Uh uh, we're studying the is glucagon, it's uh like the glucagon uh receptor that that's what we're gonna be studying. The our our labs just sent over what they're gonna be researching in 2026. So, what we're trying to do is obviously we look at then pharma and you try to time your research with theirs and ride that wave because the consumer may want the GOP, but maybe they're not gonna go through the process getting the doctor's appointment doing that, but they'll go online and be like, oh, a GOP. Like one of the brands, I don't know if you guys ever seen this brand of by Halle Berry. It's called Pendulum. It's a really cool brand. I don't know how involved she is with it, but it's just basically a GOP brand. We can quote it tomorrow, no problem. Oh, it's a great brand. Holly, big fan, big fan pendulum.

Richard Wang

I mean, what so when I joined Neilith like full time, full time in 2010, there weren't there were maybe a hundred, two hundred ingredient specialty ingredient companies. Now everyone has an ingredient, right? A branded ingredient. And one thing, like regarding the research side, right? Like, we've had to discontinue ingredients in the past because just the research over time didn't pan out. So like research is a total crapshoot, right? Like, we're luckily we're lucky that our industry is not held to pharmaceutical standards. Because I don't know how many ingredients of the thousands out there now will make muster like a phase three uh clearance from the FDA, right? So, you know, when going back to ingredients research, I do see other companies investing in their actual own research versus using you know borrow literature. I do see companies hopefully taking some safety considerations, right? Uh as they expand, because if you want to go into Australia or Europe, you're gonna need this like toxic, you're gonna need the safety and toxicological data, right? So I think I and it's good because I think it levels up the ingredient playing field overall for everyone. Same time said, there's gonna be a lot of people with just they slap a name behind a plant. Like, I have a Rhodiola extract, I'm gonna call it real Rhodiola Super Plus, right? But like when you like, okay, where's the data? Where's all the docs? Like, so I just want to say research is really hard. Research real is rare, right? Like, uh, we've had so many strikeouts there. Um, we used to have a really cool immune product for angiogen uh genesis, right? Like literally like stopping uh blood vessels growing to feed uh cancer, tumor cells, right? And then we worked in cell data, we worked in animal data, but once we got to humans, we couldn't show anything, right? So like you just don't know until you and the crappy thing is like we're investing all this money into our research into building out the safety, and we don't know if it's gonna work till like year truly work till like year four or five. Some clients will jump on with us earlier than that, think uh, thankfully. And then you have other brands or other ingredient companies coming out there and they're like, hey, we have the same thing, or we have a similar ingredient. Uh, but like you didn't improve it along the way, you know. So it's to me it's uh it's like what you say earlier with the uh people watching you and quoting something. Right. Yeah.

Don Grace

Well, there's there's you're innovators and then there's the imitators, right? To some degree, yeah. If you're truly innovating, you're spending the time, you're spending the money, and then you have the other people who come out and they're like, okay, that market's out, the the market's there, the product's out there. Let me just change it a little bit and throw it into the marketplace.

Richard Wang

So it yeah, and it takes time and you don't know. And uh so when you do get there though, you know, is is that ingredient safe, right? Is it is it gonna be effective, right? Is that is the dosing always the same? The quality are the actors always the same? Let's so going back to uh specialty ingredients, brand ingredients per se, at least if you're dealing with a decent ingredient supplier, and there's plenty out there, right? Yeah. Um, you know, like at least it's consistently bashed and standardized. It's always gonna give you the same actors, right? Um, safe, whatever is standardized to. So it goes into your product, so you know your supplement should work as intended, you know. For at least brand owners and uh companies that care about that, right? And I think as you level up and you grow and grow, uh the audience is not dumb anymore. At least not everyone, right? They have chat GPT too, they could quickly go, hey, what's this formula like? Is it effective for what my needs are, you know? Yeah.

Eric Simpson

So oh, I can't stand when people send me fucking quotes that are done by Chat GPT. I'll look at it and do they at least change the font? No. Like, at least try. At least try to fucking hide it. At least put two spaces after the period. I mean, I could filter right through that shit, and I'm just looking at it and I'm like, okay, so you got an 18 gram serving size of all this shit for a pre-workout, and it says 25 milligrams of stevia. That shit ain't gonna work with 25 milligrams of stevia to show you the chat GPT doesn't know everything. But yeah, they they they sit there and they send me all sorts of crazy stuff, and it's then there's just page after page after page of you know the reasons why this dose is and what it should be interacted with, and I'm just like, man, this is just none of it makes sense. So we'll I'll sit there and try to, you know, reverse engineer and try to put in my my two cents and you know, rebuild it to where it's gonna actually be better and yeah, what it was originally sent. But yeah, a chat GPT, man, I swear. I had this one customer that wanted to change something on one of our machines, and I'm like, well, you know, it's a very expensive part, it's probably gonna cost like thirty or forty thousand dollars to make it look the way you want. Uh-uh. Chat GPT said it's only a hundred dollars. I'm like, what the seriously? And the machine itself only costs a hundred grand. I'm like, oh my god, where where do these people get this information from?

Ken Montes

You should tell me to print uh then print it.

Eric Simpson

Yeah, print it, print that formula, print that formula, 3D print it. Oh my god, yeah, chat GPT, man. It helps in some ways and hurts in others, dude.

Richard Wang

Yeah, but yeah. Thanks for having us, guys. Yeah, we're always a pleasure.

Don Grace

We appreciate you guys coming on, and I know you guys have places to be. Thank you. Well, thank you guys.

Eric Simpson

Appreciate the partnership being remote. Absolutely. It's always a pleasure with you guys.

Richard Wang

Appreciate you. Thank you.