Masterclass: Evan Hayes, Factors Group

A Take Friday Off Masterclass is a one-on-one with someone who has built the products, brands or supply chains the rest of the industry benchmarks against. This one was with Evan Hayes, Managing Director of Factors Group Australia, taken on the road between appointments. Evan was Technical Director at BioCeuticals and later ran sourcing and procurement at Blackmores; Factors Group Australia is the local arm of Canada's Natural Factors, covering research, development, manufacturing and distribution of nutritional supplements.

What follows is an edited recap of the conversation.

Vertical integration, from catch to batch

Factors grew from a family complementary-medicine business into one of North America's largest, and it did it by moving upstream: from distribution into manufacturing, then into raw-material sourcing and testing, then into farming and its own extraction facilities. Today it runs organic farms growing around seventy ingredients, makes its own ethanol for extraction and owns an MSC-certified fishery in Alaska. Evan calls it close to complete "catch to batch" control.

Does that dilute margins or add complexity? Factors can't grow everything, so it manages around 7,000 raw materials and pairs in-house production with disciplined external sourcing. The reason for keeping so much in-house is simple: outsourcing leaves a lingering doubt about whether a third party's checks are substantive. Customers, Evan says, now expect that level of assurance as the baseline.

B Corp

Factors Australia was the first company in its space in Australia, and the first in the group, to achieve B Corp certification. Building a new facility helped, because processes could be designed for transparency from day one. Evan sees external accountability as the natural next step after self-declared good practice.

Launching bespoke, novel formulations

In roughly two years Factors launched several bespoke brands across practitioner, grocery and health-food channels, with a weight-loss brand to follow. One health-food formula carried 97 ingredients, seventy of them from Factors' own farms, and every one had to be re-specified and retested to meet Australian GMP. A project planned at three months took about eighteen. The result is one of the most comprehensive formulas on the market; starting with the hardest possible product was, by Evan's own admission, a brave choice.

Hero ingredients versus "pixie dust"

Everyone on the call rejected products that lean on one headline ingredient with trivial amounts of everything else. Small doses are acceptable where there is a formulation rationale, but any claim has to be backed by evidence. Consumers, Evan argues, are more sophisticated than the industry assumes.

Price pressure and margins

The industry is often assumed to be high-margin. Doing it properly is expensive: natural ingredients have harvests and shelf lives, testing standards keep rising, and products need education and time on the market. Brands built on export volume or low doses tend not to last; the ones with longevity focus on Australian consumers and believe in what they sell. The squeeze lands on everyone in the supply chain, most of whom are in it out of passion as much as financial need.

Outsourcing product development

Product development needs many skills at once and very few people cover more than three. Outsourcing parts of the work is normal in other industries and, done well, produces better solutions at lower cost. Suppliers and manufacturers often contribute to formulation in this sector, and that is a feature, not a weakness.

First-mover advantage

Raw materials usually have no patent protection, so the advantage comes from being first and then using the lead well in your chosen channel. Being first is not always best, though: some of Evan's best work went on to succeed under other companies because his timing or marketing was wrong.

What keeps him up at night

Becoming irrelevant. Missing the next trend, ignoring practitioners and customers, or growing arrogant. Evan values open, collaborative idea-sharing over holding information tightly.

Advice for someone entering the industry

Get a bird's-eye view of the whole chain, from raw-material sourcing and manufacturing through testing, logistics, marketing and the feedback loop. Start from a health concern you actually care about, then study the ingredients and products that address it. There is a role for almost any interest: sourcing, compliance, clinical work, negotiation, people.

Innovation and probiotics

Evan credits long-running industry relationships for Factors' Scobiotic range, first to market in its form. He traced Australia's probiotic history through early work at Blackmores and BioCeuticals, including what he describes as the first gut-brain-axis clinical trial, and made the point that innovation comes from many sources: reading the research, spotting trends and revisiting ideas whose time has not yet come.

The conversation closed on a shared philosophy: build formulas from patient problems and clinical needs rather than chasing cheaper versions of existing products, with traceable, correctly sourced ingredients at doses that produce results.