In 1995, husband and wife Birgitte and Bo Nielsen did what many people have only fantasized: They packed six suitcases and left their native Denmark to live in the Caribbean.
“We sold everything,” chuckles Birgitte Nielsen, noting that one of the suitcases was stuffed with toys for her small children.
But the Danish couple didn't move to Tortola to lounge under the palm trees. They spent the next four years researching a nutritional-supplement business that would eventually become hugely successful in Europe.
The idea for Doctor's Natural had come to the couple when Bo Nielsen discovered he suffered from a genetic heart ailment at age 37. A successful orthopedic surgeon, Bo Nielsen conferred with experts in the U.S. who advised him to adopt a nutritional-supplement approach to his own treatment. More than 20 years ago, this approach was controversial in the traditional medical world.
But faced with the surgical alternative, Bo Nielsen began treating himself by taking nutritional supplements and changing his lifestyle to healthier habits. Surprised by his full recovery, he decided to give up his surgical career and began his research into the subject.
Over four years in the Caribbean starting in 1995, Nielsen and scientific collaborators pored through thousands of research studies on the effects of nutritional supplements and traveled to conferences on the subject around the world. “We built a database,” says Birgitte Nielsen, a physical therapist by training.
In 1999, the couple moved to Marbella, a balmy city on the Mediterranean coast. There, they started Doctor's Natural, selling nutritional supplements to Europeans via the nascent Internet and shipping by mail. Today, that company has 100,000 customers who pay an average of about $80 per month for supplements.
The Nielsens moved to Naples a couple of years ago. “We came to the U.S. because we wanted to expand the company,” she says. “We're making a copy of the European business.”
By 1999, the Nielsens had completed four years of research into nutritional supplements. After a few years of consulting on the subject they established the European Doctor's Natural company in 2003. Because they had lived in the Caribbean, they preferred the warm climate of Spain to their native Scandinavia.
From the beginning, the Nielsens were determined to create an Internet-based company. “We don't have retail stores,” says Birgitte Nielsen. The option to buy the supplements on a monthly recurring basis using a credit card allows the company to be efficient. Ten people run the European operation.
The Nielsens contracted with a manufacturer in Holland to make the supplements. “We got a small loan from private investors to make the product,” Birgitte explains. “The rest of it was brain knowledge.”
Together, the husband-and-wife team split the tasks of the company. Bo Nielsen stays current with the research, educates doctors through seminars and meetings and is the scientific expert on the subject. Birgitte Nielsen runs the business operations. She says the separation of tasks is how their 23-year marriage and work has survived.
In Europe, Doctor's Natural sells through a network of 500 doctors and 500 physical therapists who recommend the products to their patients. These medical specialists get a 10% commission on sales. While most of the physical therapists take the money, Nielsen says most doctors won't accept the commissions for ethical reasons.
Still, most patients pay for these supplements out of their own pockets because even European socialized medicine won't reimburse them. Customers pay about 60 euros (about $79) for a month's supply and can receive the supplements as part of a monthly subscription service.
Doctor's Natural sells few supplements individually. Instead, the company recommends packages of three bottles for various ailments, from allergies to high blood pressure and weight loss. New products come out every six months.
Doctor's Natural products cost more than some competitors. For example, a 30-day supply of vitamins can cost from $13 to $39. “We're not afraid of the competition because we have great products,” Birgitte Nielsen says.
Nielsen says many competitors' products contain insufficient active ingredients. “It's appalling how little is in there,” she says. “They're cheating the customer.”
Building U.S. presence
The Nielsens established their U.S. operations in Naples in part because Florida has a higher percentage of consumers of such products than most other states. They established an office in downtown Naples on tony Fifth Avenue South. “We're closer to our customers,” Birgitte Nielsen says.
The Nielsens started planning the company's expansion to the U.S. two years ago and launched Doctor's Natural on this continent in January. Birgitte Nielsen says she manages the business on both sides of the Atlantic using Skype and other Internet tools.
The Nielsens say it was a challenge to find a manufacturer in the U.S. that adhered to their quality standards. “We've seen all the Mickey Mouse places,” she chuckles. Nutriforce Nutrition in Miami manufactures the supplements to Doctor's Natural's specifications.
At least initially, the Nielsens plan to market Doctor's Natural products directly to the consumer in the U.S. instead of through doctors and physical therapists. That's because they say Americans are more proactive about their health than Europeans because Americans have to pay for a greater share of their medical care if they get sick. Socialized medicine in Europe doesn't give people a financial incentive to improve their health. “It's a disaster,” she says. “We had a good health system in the '60s.”
Birgitte Nielsen says in difficult economic times people turn to nutritional supplements and make a greater effort to live a healthy lifestyle because they can't afford to get sick. Besides, the medical community is slow to recognize the benefits of nutritional supplements, she says.
In addition to marketing on the Internet, Doctor's Natural will target prospective U.S. customers through health clubs, spas and cooking channels on television. Good press in health magazines will count, too.
While Birgitte Nielsen declines to disclose sales in Europe, she says she expects U.S. sales to hit $1.5 million this year. She and her husband estimate they'll invest about $800,000 to start the Naples-based U.S. company. Ultimately, she says, $10 million in annual sales in the U.S. with a 10-person staff is “not unrealistic.”