<
>

Supplement company was natural fit

When Tony Gonzalez overhauled his eating habits in 2007, he didn't intend to leverage his newfound appreciation for healthy food into building a $22 million (and counting) all-natural supplement company. Yet that is precisely the path he eventually took by co-founding All-Pro Science Inc., which offers 12 all-natural supplements ranging from Superfood, a powder containing 15 organic fruits and vegetables, to a daily multivitamin.

APS is well-positioned to take advantage of a growing consumer appetite for healthy dietary supplements with projected 2011 sales of $5 million, increasing momentum toward gaining its 20,000th customer by December, and current and future distribution deals set up with Whole Foods, Lifetime Fitness and Vitamin Shoppe.

A five-time All-Pro tight end for the Kansas City Chiefs and Atlanta Falcons, Gonzalez altered his diet to improve his ability to recover from fatigue and injuries. He was ensconced in his refashioned diet -- organic produce, vegetable protein, wild fish and non-processed food -- in 2009 when he met the man who would become the catalyst toward APS's origin.

While on a vacation with his wife and kids at Red Rock Casino Resort and Spa in Las Vegas in August 2009, Gonzalez was catching up with his friend, R.J. Demman, who was a casino host at Red Rock. Demman was familiar with Gonzalez's eating regimen, which inspired him to introduce Gonzalez to Paul Edalat, owner of Scilabs Nutraceuticals, an FDA-certified nutritional science manufacturer in Irvine, Calif.

Gonzalez told Edalat about the complicated process he undertook to make his own protein powder -- buying expensive brown rice, hemp and pea protein, grinding flaxseeds and mixing it all together. Edalat proclaimed he could simplify that process, implying that Scilabs could manufacture the desired protein powder. Then he surprised Gonzalez by asking him if he had considered producing and marketing a line of dietary supplements similar to what he was making for himself.

"I said, 'No, not at all. Why would I think of something like that?' " Gonzalez recalled sarcastically.

That conversation prompted them to discuss going into business together. Gonzalez, who expressed that he and Edalat had both suffered through sour business partnerships in the past, spoke more with Edalat as each measured the others' commitment toward a supplement line. At Edalat's behest, they visited a natural food show at the Anaheim Convention Center. The experience was enlightening for Gonzalez.

"It was a little intimidating but it gave me the perspective that this isn't just something where you make a product and slap your name on it," Gonzalez said by phone before the NFL lockout ended. "It's gonna take hard work and there's a lot of competition out there."

The competition is real. (Nutrition Business Journal estimated in a Jan. 7 article that U.S. consumer dietary supplement sales in 2010 were $28.7 billion, a 7 percent increase from 2009.) Despite a gargantuan consumer base, the dietary supplement industry lacked an identifiable all-natural sports supplement line at the time Gonzalez and Edalat met. That encouraged them to form APS in December 2009 with a 50-50 initial financial investment -- $200,000 apiece.

To make the partnership more convenient, APS moved into an office adjacent to the Scilabs facility, where APS products are now manufactured.

The APS line began with one product -- Complete Veggie Protein, an evolution on the item Gonzalez had originally made for himself. That was followed within a month by Complete 100% Grass-Fed Whey Protein, which is sourced from grass-fed cows in New Zealand. Other products are sourced in equally healthy ways. Fish oil capsules used for Complete Omega 3 are derived from wild salmon; APS's fruit and vegetable products come from organic farms in California.

Gabriel Flores, chief marketing officer for APS, is also a product formulator who's working on Mass Gainer, which is one of four upcoming products from APS. He said that while he can complete a product's formulation in 60-90 days if he so desired, the process at APS takes six to nine months in order to ensure it meets customers' expectations. And those expectations draw back to APS's first days.

There was significant customer interest in APS from the beginning, which satisfied the company's initial conservatism. Gonzalez said he and Edalat wanted to test the market with a limited product line to gauge customer response. Once Gonzalez's 2009-10 NFL season ended, he began pulling long days in the office to get APS off the ground -- 7:30 in the morning until 6:30 at night with him offering input on product formulation, financial strategy and marketing endeavors, among other areas.

Twitter accounts for APS and for Gonzalez were set up prior to the company's official launch. A Facebook page and a YouTube channel were later added. (The APS website and Facebook page are planned to receive a facelift by mid-September.) Gonzalez also began calling companies, including Nike and EA Sports, to see what partnerships APS could form. The talks went nowhere but Gonzalez chalked it up to learning what awareness APS had in the marketplace.

His national TV and radio appearances to promote the brand, as well as an advertisement spot on Jim Rome's nationally syndicated radio show, helped put APS on the map. The momentum gained from that led to distribution deals.

A full distribution agreement with Lifetime Fitness and their 90 locations throughout the United States has been in place for several months, which Flores described as a successful relationship. Already available in 22 Whole Foods stores in North Carolina, South Carolina, Tennessee and Georgia, APS is finalizing an agreement for its products to appear at 44 Whole Foods locations in California, Oregon, Nevada and Arizona. Also on deck is a 400-chain distribution agreement with Vitamin Shoppe, which Flores said should commence in October.

The litany of distribution deals might appear to contradict the calculated growth that Gonzalez and others at APS emphasize they want. Yet Flores said APS could expand far more than it has.

"I could quadruple our growth very easily if that's all I wanted to," Flores said in a phone interview. "We've been able to control it and to nurture along our consumer base."

Flores and Gonzalez speak of keeping a brand loyalty that's been built since APS's inception. Gonzalez speaks with customers regularly through Twitter, he calls those who purchase their products from APS's website and he's taken to writing letters to customers who he can't reach by phone.

"I came up with the idea to make it more personal, other than a phone call, to write a letter thanking them for their business and then I autograph the backside of it," Gonzalez said. "It's just to let them know how much I appreciate it."

Flores proudly noted that the company's first customer still buys products. Gonzalez emphasized the impact of APS's second customer -- Colorado Rockies shortstop Troy Tulowitzki.

More than 50 athletes endorse APS, including Tulowitzki, who told Gonzalez he wanted to be an endorser as soon as he tried Complete Veggie Protein. Houston Texans linebacker Brian Cushing, who was suspended four games in 2010 for testing positive for a non-steroidal banned substance, will likely become APS's next athlete endorser after discovering the product line's health benefits, Gonzalez said.

The brand exposure Tulowitzki, Cushing and other athletes can bring APS could help soften the blow of their products' prices, which are expensive by industry standards. For example, Complete 100% Grass-Fed Whey Protein costs $59.99 for 1.44 pounds; EAS charges $59.99 for a 4.38-pound tub of its whey protein.

Gonzalez said APS's prices have always been higher for two reasons -- the ingredients sourced for the formulations are costly to buy, and APS initially priced their items to account for the inevitability that they would be sold in retail stores, which take a percentage of each item sold. Yet Gonzalez is optimistic product costs won't hold back APS's growth. He wants APS to hold a 20 percent share in the dietary supplement market within five years.

"I want this to be a $100 million company," Gonzalez added. "That's the goal for the next five to seven years."

While those are goals that could bring some skepticism, APS has exposed the demand for all-natural dietary supplements. For Gonzalez, in particular, a passion to eat healthy in order to extend his NFL career has created a bridge for him to cross into a second career whenever his playing days end.

Kyle Stack is a freelance writer in New York City who also contributes to ESPN The Magazine.