Meet the $30m supplements giant

Luke McNally in competition mode.Luke McNally’s story reads like Redfern-meets-Rocky.

It is your classic tale of the scrawny kid who beats the odds and becomes a world champion.

The founder of vitamin and mineral/supplements business Mass Nutrition began trading from his lounge room in Sydney’s inner-west suburbs in 2006, driven to inspire enthusiasts “who wanted to deepen their understanding of health, nutrition and build a sustainable formula that’s right for their independent needs”.

His mission was timely.

In 2013-14 his company turned over $30 million and has 42 licensed outlets in every state and territory bar Tasmania.

A year ago, that turnover figure was about $8 million, McNally says.

He is matter-of-fact about his expectation the group will grow to 100-strong by 2016.

“We are absolutely not at our peak. We get 15 queries a week from people wanting to join us.

“But it is very important we work with people who display a sense of loyalty and understand teamwork, as sound knowledge of supplements is actually lower down our list of priorities because that can be taught.”

Crowned Mr Australia in 2012 and a top-10 finalist of Mr Universe the same year, McNally is still physically imposing.

Almost 30 – his birthday is July 23 – it is difficult to imagine him a 56-kilogram 17-year-old in 2001, able to see his own ribcage through his chest.

The indigenous businessman and body-builder describes his childhood as “difficult at times”.

“I was at times frightened of my father and my mother was away with work more often than she was home,” he recounts.

His parents’ separation led to years of drugs and alcohol abuse.

But he knew he needed to “break the cycle” and with a burning desire to qualify as a fire-fighter, one day he cut his hair, pulled out his piercings and the next morning arrived at his high school gym.

He tripled his daily food consumption “of peanut butter and Vegemite sandwiches, milkshakes and chocolate bars” and religiously trained to add bulk to his frame.

Aged 20, in 2004, he was accepted to the NSW fire-fighter program, which he credits with anchoring his life: “It’s taught me diligence, strength of body and mind.”

And it was around this time he met other men who regularly took dietary supplements.

“I didn’t have the money to get the supplements these other guys could buy so I made it my aim to set up as a price leader, to be able to get the supplements for people like myself.”

By 2006 McNally had started importing and trading his products, which he marketed and sold online.

But the e-commerce world was not for him as he really wanted to use his growing knowledge of nutrition and health to educate others.

So he opened his brand’s first bricks and mortar shop – in Tweed Heads in NSW’s far north – in 2008, took on a business partner (an old school friend) and before long one outlet became two, then three.

“We started wondering how to expand ourselves further as all our cash was reinvested in the business and it was very challenging trying to manage cash-flow to facilitate growth.”

The answer came in 2012 when Mass Nutrition partnered with a local legal company, which drew up licensing documentation.

It was the obvious way to grow reach without stumping up big capital.

“When we hit the ground in 2013 we were ready to go and that’s what we did; we almost quadrupled in reach last financial year.”

Australians reportedly cannot get enough of what Mass Nutrition sells.

Stores’ revenue grew by 3.9 per cent a year between 2009 and 2013, reports industry data provider IBISWorld.

Last year, Aussies spent almost half a billion dollars ($458.4 million) at 768 vitamin and supplement stores.

Nature’s Own, which turns 40 next year, was the biggest trader.

Online vitamin and supplement stores – while numbering only 43 in 2013 – generated $78 million revenue.

More tellingly, the e-traders grew by 8.4 per cent annually over the past five years.

Asked how he sees his company shaping-up against an onslaught of e-rivals, McNally seems unfazed.

He says he has three solid relationships with overseas supplement manufacturers and expects to more-than-double his brand’s network within 18 months.

“It is very cool for someone to get in touch with a supplier, set up a web site and start selling supplements just now”, he says. But his business knows its own focus, which is “female-specific, holistic and wellness products and education”.

“The biggest problem is all the online competition as almost every day someone new pops up and that’s got to stop somewhere.

“It’s not so much a concern to us as we place great focus on our brand and our reputation but it is a concern on a human level.

“These products can attract vulnerable market groups – young people and females who come to you wanting to lose weight at all costs – and this makes them vulnerable to the charlatans looking for quick returns online.”

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