By Sheldon Baker04.08.21
Lugo spent the first part of his career running the distribution arm of a life support chemical supply company, supporting the mining and diving industries. In 2015, he transitioned into a leadership role at Lugo Nutrition, a business started by his grandfather in 1974, where he has managed the sales team ever since. Lugo Nutrition, formerly known as The O.C. Lugo Co., was founded when Oscar Lugo began sourcing gelatin in the early 1970s. Over the years, Lugo Nutrition has increased its product portfolio to include carotenoids, flavor components and nutritional ingredients. In January 2012, Lugo Nutrition legally separated from its parent company, The O.C. Lugo Co., and expanded its resources to focus solely on the nutritional industry. Lugo is a graduate of the University of Delaware, where he studied business, English literature, and political science.
Health E-Insights (HEI): As the newly named president, what changes are you bringing to the business?
Lugo: I see my role far less as changing things and more as doubling down on our strengths and adding to the company in meaningful ways. We have been a family-run business for 40 years that has been relationship focused. That is how my grandfather did business and that is how my father grew the company into what it is today. The world is changing around us, with everything going more digital and the pace of business increasing every day, but that has not changed the importance of those relationships one bit.
I would argue it has made them even more important. When you build and invest in those relationships, both with customers and with suppliers, you build a foundation for sustainable mutual growth. That is where the magic starts to happen. I plan to bring a vision for growth in new and existing areas and to continue to grow our reputation as a solutions provider in the market.
We do not just sell ingredients, we bring technical solutions to our customers to solve their problems, whether that be cleaning up their label, improving their marketing message, improving functionality of their product, locking down stable supply, and a myriad of others. I have been blessed with a team of extremely talented and dedicated people around me, who have put their faith in me to lead them. Between this and the legacy of how my father and grandfather built and grew this business, I see my biggest role as confirming their faith in me to lead this company to the next level.
HEI: What does quality mean to you and why?
Lugo: On a practical level quality removes so many barriers when it comes to the sales process. When you have a product whose story and origin you can believe in, and not make excuses for, it massively raises the likelihood of success. When you can take a truly functional product and marry it with a great story you tend to see exponential success, and quality is a key component of that story. It gives our customers trust that our ingredients are sourced from trusted, sustainable sources. They can then leverage this into a far more effective marketing story for their consumers.
With the U.S. consumer becoming increasingly educated on what they put in their body, this is not just helpful, but vital to success. But for us, quality goes beyond that and becomes a part of your reputation as a company. Quality is foundational to the relationships we form and the reputation we have built. For a company that keeps the name of the founder on its front door the way we do, that reputation is everything. To our suppliers, it is the best way to do business and find success, but for us, it is the only way.
HEI: How does Lugo Nutrition work with its supplier clients to give them the tools they need to succeed?
Lugo: There are dozens of things big and small that we do to help equip our supply partners with the tools for success, but I think the biggest and most beneficial thing we bring is perspective. The U.S. market is unique in many ways—innovative, fast-paced, growing, high on both opportunity and competition. For these reasons, it remains one of the most attractive markets in the world to enter.
But often the companies we are working with are strong in their home territory, where they might be the biggest guy on the block. Coming to the U.S. with a new product, even with a “me-too” product, takes a tremendous amount of work and planning.
In the early days of a new project, we help review and assess the product and its marketing in its current form and help them identify areas that need to be worked on, expanded, or focused on. As we go through the process of launching a new ingredient, we become their eyes and ears on the ground here in North America. We pride ourselves on being very well connected and plugged into the market in both food and nutraceuticals, allowing us to quickly assess how successful a product is going to be and how the market is going to react to it. We also bring to the table our robust network of colleagues, consultants, and experts who can help us to formulate and execute on advanced marketing strategies.
HEI: From a marketing communications standpoint, what does a supplier need to do?
Lugo: Having a strong and streamlined message around the function of the ingredient and what separates them from the competition is vital. If trying to leverage science those studies need to be unique to your product and need to be in a readily available form for sharing with prospects. Preferable in two forms, the easily digestible version that anyone can understand and get hooked by the more detailed reports that R&D will lean on. The folks in R&D and new product development are often inundated with new product proposals. Making sure your offering is streamlined and easily digestible is vital.
Then you have the effect of COVID-19 on how we do business. We all hope that eventually tradeshows will come back, but what if they do not? Or what if they exist in a far different form from what we saw in 2019? The reality is some portion of how we do business will not go back to “normal.” Zoom is here to stay and so are virtual trade shows, especially for niche industries. So how do you prospect when you cannot have that low-pressure 3-minute chat on the show floor that ends with exchanging business cards? To me, the biggest thing is investing in video. Short-form video is such an effective communication tool, and it is completely zero pressure. You allow someone to engage with your information on their terms, understand it and absorb it, and then come back to you with questions. Beyond the immediate need, the content produced becomes evergreen and can be used over and over throughout the launch. It is the perfect complement to any sales strategy in 2021.
HEI: Share your thoughts about the importance of product differentiation?
Lugo: We are operating in an incredibly crowded and fast-paced market where new discoveries, applications, and product forms are coming out constantly. In this type of atmosphere, finding a way to stand out from the pack is important and to me, and you can only do that in one of two ways: go big or go small. When you go big, I really mean going broad. Finding products that fit a wide array of needs for the market, that fit into multiple niches. Doing this is going to generate a lot of leads, especially early on, because you are going to be speaking the language that each of these segments thinks in.
But my feeling on these types of products has long been that they have a lot of flash and not a lot of substance and that once you drill down on these products you may find the usability in any given market segment is much more limited than you would like. The alternative is to go small, or rather to go focused. Our preference is for products that have a clean and strong application for one, possibly two segments. This allows us to focus our efforts and our marketing strategy for these segments. It also allows us to immerse ourselves in the market, the various players from big brands to CMOs to the current distributor network and competitive landscape.
HEI: Product education is another important key area that ingredients suppliers must consider.
Lugo: Absolutely. The supplier is the expert on the product and always will be. What makes this so vital is that my team, in trying to represent the supplier, has to go out and educate our customers. Have you ever tried to explain a news article to someone that you only skimmed? Or a two-hour podcast that you only listened to once? Even if you think you have grasped everything the moment you open your mouth the holes start to appear. Making sure that we have the tools, the understanding, and the repetitive experience of discussing the products is important.
This is also one of the best ways the supplier can get involved in the sales process alongside us. Some of the best successes we have had, especially early, is when we can bring the scientific and R&D resources of our suppliers to bear for our customers. It shows a level of cooperation and transparency that customers value, and it guarantees them the best possible service and support on a technical level. It also further contributes to increasing our expertise on the product, because to me there is no better way to learn about a product than to listen to an expert discuss it with a customer. You learn the questions that are going to be asked, you learn the pain points and the points of emphasis. You start to see what features or selling points do not land as well as expected, and which peak interest in areas we had not thought to explore.
HEI: Managing expectations is also an important element.
Lugo: I think sometimes companies come into the U.S. market with dollar signs in their eyes, but a lack of understanding of the time, effort, and investment it takes to break in. It is never an overnight process. When companies come to the U.S., they need to understand that every ounce of work they can do beforehand from a marketing and regulatory standpoint will cut the time it takes for us to launch their product in the U.S., but it will never take that time down to zero. For us, we have a process we follow, and over the years it had been an incredibly successful one that has led to multiple relationships lasting a decade-plus.
HEI: Do you see any ingredient trends coming into focus?
Lugo: I think the most interesting areas coming up are the CBD/THC space as we see increased legalization in the U.S. States like New Jersey are getting involved where there are so many fantastic pharma, flavor, and supplement companies operating excites me with the potential innovations we could see. I also think personalized nutrition is going to be the way of the future, as we start to understand that different people absorb and react to supplements and molecules differently. I am really curious to see how that effects things and if it will bring growth as people who thought supplements just do not work for me maybe try again with better results from a personalized product.
We all know immunity is not going away, but it has never been clearer that different systems in the body are intermixed. Sleep and stress affect immune health. Gut affects brain health, which affects stress, which affects sleep and immunity. And consumers know it too. These additional segments, especially sleep and stress, are going to be extremely exciting to watch.
Sheldon Baker is a senior member of Baker Dillon Group LLC and has created numerous nutraceutical brand marketing communications and public relations campaigns for many well-known supplement and food industry companies. For Health E-Insights interview consideration or brand marketing consulting, contact him at SBaker@BakerDillon.com.
Health E-Insights (HEI): As the newly named president, what changes are you bringing to the business?
Lugo: I see my role far less as changing things and more as doubling down on our strengths and adding to the company in meaningful ways. We have been a family-run business for 40 years that has been relationship focused. That is how my grandfather did business and that is how my father grew the company into what it is today. The world is changing around us, with everything going more digital and the pace of business increasing every day, but that has not changed the importance of those relationships one bit.
I would argue it has made them even more important. When you build and invest in those relationships, both with customers and with suppliers, you build a foundation for sustainable mutual growth. That is where the magic starts to happen. I plan to bring a vision for growth in new and existing areas and to continue to grow our reputation as a solutions provider in the market.
We do not just sell ingredients, we bring technical solutions to our customers to solve their problems, whether that be cleaning up their label, improving their marketing message, improving functionality of their product, locking down stable supply, and a myriad of others. I have been blessed with a team of extremely talented and dedicated people around me, who have put their faith in me to lead them. Between this and the legacy of how my father and grandfather built and grew this business, I see my biggest role as confirming their faith in me to lead this company to the next level.
HEI: What does quality mean to you and why?
Lugo: On a practical level quality removes so many barriers when it comes to the sales process. When you have a product whose story and origin you can believe in, and not make excuses for, it massively raises the likelihood of success. When you can take a truly functional product and marry it with a great story you tend to see exponential success, and quality is a key component of that story. It gives our customers trust that our ingredients are sourced from trusted, sustainable sources. They can then leverage this into a far more effective marketing story for their consumers.
With the U.S. consumer becoming increasingly educated on what they put in their body, this is not just helpful, but vital to success. But for us, quality goes beyond that and becomes a part of your reputation as a company. Quality is foundational to the relationships we form and the reputation we have built. For a company that keeps the name of the founder on its front door the way we do, that reputation is everything. To our suppliers, it is the best way to do business and find success, but for us, it is the only way.
HEI: How does Lugo Nutrition work with its supplier clients to give them the tools they need to succeed?
Lugo: There are dozens of things big and small that we do to help equip our supply partners with the tools for success, but I think the biggest and most beneficial thing we bring is perspective. The U.S. market is unique in many ways—innovative, fast-paced, growing, high on both opportunity and competition. For these reasons, it remains one of the most attractive markets in the world to enter.
But often the companies we are working with are strong in their home territory, where they might be the biggest guy on the block. Coming to the U.S. with a new product, even with a “me-too” product, takes a tremendous amount of work and planning.
In the early days of a new project, we help review and assess the product and its marketing in its current form and help them identify areas that need to be worked on, expanded, or focused on. As we go through the process of launching a new ingredient, we become their eyes and ears on the ground here in North America. We pride ourselves on being very well connected and plugged into the market in both food and nutraceuticals, allowing us to quickly assess how successful a product is going to be and how the market is going to react to it. We also bring to the table our robust network of colleagues, consultants, and experts who can help us to formulate and execute on advanced marketing strategies.
HEI: From a marketing communications standpoint, what does a supplier need to do?
Lugo: Having a strong and streamlined message around the function of the ingredient and what separates them from the competition is vital. If trying to leverage science those studies need to be unique to your product and need to be in a readily available form for sharing with prospects. Preferable in two forms, the easily digestible version that anyone can understand and get hooked by the more detailed reports that R&D will lean on. The folks in R&D and new product development are often inundated with new product proposals. Making sure your offering is streamlined and easily digestible is vital.
Then you have the effect of COVID-19 on how we do business. We all hope that eventually tradeshows will come back, but what if they do not? Or what if they exist in a far different form from what we saw in 2019? The reality is some portion of how we do business will not go back to “normal.” Zoom is here to stay and so are virtual trade shows, especially for niche industries. So how do you prospect when you cannot have that low-pressure 3-minute chat on the show floor that ends with exchanging business cards? To me, the biggest thing is investing in video. Short-form video is such an effective communication tool, and it is completely zero pressure. You allow someone to engage with your information on their terms, understand it and absorb it, and then come back to you with questions. Beyond the immediate need, the content produced becomes evergreen and can be used over and over throughout the launch. It is the perfect complement to any sales strategy in 2021.
HEI: Share your thoughts about the importance of product differentiation?
Lugo: We are operating in an incredibly crowded and fast-paced market where new discoveries, applications, and product forms are coming out constantly. In this type of atmosphere, finding a way to stand out from the pack is important and to me, and you can only do that in one of two ways: go big or go small. When you go big, I really mean going broad. Finding products that fit a wide array of needs for the market, that fit into multiple niches. Doing this is going to generate a lot of leads, especially early on, because you are going to be speaking the language that each of these segments thinks in.
But my feeling on these types of products has long been that they have a lot of flash and not a lot of substance and that once you drill down on these products you may find the usability in any given market segment is much more limited than you would like. The alternative is to go small, or rather to go focused. Our preference is for products that have a clean and strong application for one, possibly two segments. This allows us to focus our efforts and our marketing strategy for these segments. It also allows us to immerse ourselves in the market, the various players from big brands to CMOs to the current distributor network and competitive landscape.
HEI: Product education is another important key area that ingredients suppliers must consider.
Lugo: Absolutely. The supplier is the expert on the product and always will be. What makes this so vital is that my team, in trying to represent the supplier, has to go out and educate our customers. Have you ever tried to explain a news article to someone that you only skimmed? Or a two-hour podcast that you only listened to once? Even if you think you have grasped everything the moment you open your mouth the holes start to appear. Making sure that we have the tools, the understanding, and the repetitive experience of discussing the products is important.
This is also one of the best ways the supplier can get involved in the sales process alongside us. Some of the best successes we have had, especially early, is when we can bring the scientific and R&D resources of our suppliers to bear for our customers. It shows a level of cooperation and transparency that customers value, and it guarantees them the best possible service and support on a technical level. It also further contributes to increasing our expertise on the product, because to me there is no better way to learn about a product than to listen to an expert discuss it with a customer. You learn the questions that are going to be asked, you learn the pain points and the points of emphasis. You start to see what features or selling points do not land as well as expected, and which peak interest in areas we had not thought to explore.
HEI: Managing expectations is also an important element.
Lugo: I think sometimes companies come into the U.S. market with dollar signs in their eyes, but a lack of understanding of the time, effort, and investment it takes to break in. It is never an overnight process. When companies come to the U.S., they need to understand that every ounce of work they can do beforehand from a marketing and regulatory standpoint will cut the time it takes for us to launch their product in the U.S., but it will never take that time down to zero. For us, we have a process we follow, and over the years it had been an incredibly successful one that has led to multiple relationships lasting a decade-plus.
HEI: Do you see any ingredient trends coming into focus?
Lugo: I think the most interesting areas coming up are the CBD/THC space as we see increased legalization in the U.S. States like New Jersey are getting involved where there are so many fantastic pharma, flavor, and supplement companies operating excites me with the potential innovations we could see. I also think personalized nutrition is going to be the way of the future, as we start to understand that different people absorb and react to supplements and molecules differently. I am really curious to see how that effects things and if it will bring growth as people who thought supplements just do not work for me maybe try again with better results from a personalized product.
We all know immunity is not going away, but it has never been clearer that different systems in the body are intermixed. Sleep and stress affect immune health. Gut affects brain health, which affects stress, which affects sleep and immunity. And consumers know it too. These additional segments, especially sleep and stress, are going to be extremely exciting to watch.
Sheldon Baker is a senior member of Baker Dillon Group LLC and has created numerous nutraceutical brand marketing communications and public relations campaigns for many well-known supplement and food industry companies. For Health E-Insights interview consideration or brand marketing consulting, contact him at SBaker@BakerDillon.com.
