DNP International: Putting Its Eggs into More than One Basket

David Ji, president, DNP International, Irvine, CA, set out on a mission in 1994 to take advantage of opportunities on the raw materials side of the nutraceuticals business. According to Mike Smith, vice president, Mr. Ji, felt he could add value to the market by sourcing his raw materials from outside the U.S. More specifically, he said, “Mr. Ji was really a pioneer when it came to importing from China. He really believed it was possible to outsource a quality product at a reasonable price. What is commonplace today was actually quite rare 10 years ago.”

Since 1994 DNP has grown substantially, establishing operations in multiple locations around the globe and employing nearly 80 people. In addition, the company has grown its offerings from a handful of products to over 500 raw materials, and it has the ability to source another 2000 ingredients.

In addition to raw materials, DNP also decided to branch out to the finished products side of the business. “This was a natural progression,” said Mr. Smith. “This side of the business was formed in late 1991 because we felt if we had control over our own raw materials that it would be a smart move to get involved in manufacturing our own finished products” This way, Mr. Smith said, the company could provide better quality and offer a better price because it would be eliminating the middle man. Well, it worked. Today Dynamic Nutritional Products (the finished products arm of DNP International) is a formidable competitor in the nutritional supplements business, having launched scores of supplements and experiencing double-digit growth since its inception. In fact, the company most recently expanded its product range last month with the introduction of MicroLactin, an important breakthrough in supplemental support for healthy joint function.

Dynamic Nutritional Products, Inc. concentrates on filtering its products through the natural health food store channel of distribution. On the raw materials side, however, Mr. Smith says DNP focuses on six different markets. “We started very heavily in the nutraceutical segment, which remains a focus for our business, but we have also moved on to serve the food, animal feed, beverage, cosmetic and pharmaceutical markets as well,” he said.

In a slight departure from its daily activities, the company recently introduced its own magazine called Ingredient Times. “We are trying to take a different approach from some of the other industry magazines,” Mr. Smith said. “Ingredient Times is less ‘newsy’ and more informational on the raw materials front. The magazine also dissects regulatory and intellectual property issues.” Ingredient Times will be mailed to decision makers at more than 10,000 manufacturers and serve as an advertising vehicle as well.

Commenting on raw material competition, Mr. Smith said, “The business is so fierce that margins have become very slim. This is forcing companies in the direction of patented products as a way to protect themselves in the market. This allows companies to insulate themselves so they are not as susceptible to supply and demand like some of the more commodity-type products. Prices have gone about as low as they can on raw materials.”

DNP has already survived a great deal of consolidation and up­heaval within the in­dustry, while some of the other companies in the industry seem to have disappeared or have been acquired. Mr. Smith says this is because DNP has always been extremely aggressive in marketing itself. Further, he said, “We always keep a very close eye on the pulse of the industry, especially when it comes to demand and pricing. For the future, we will continue to diversify and expand into other markets. I think five to 10 years from now DNP will be a significant force in this business.”—R.W.


DNP International
420 Exchange
Suite 200
Irvine, CA 92602
Telephone: 949-428-8660
Fax: 949-428-8670
E-mail: imauras@dnpint.com
Website: www.dnpint.com