Health Products Company Overcomes Industry Challenges, Founder’s Vaccine Comments | Business Observer
Steve Rye grew up on a dairy farm in South Dakota, where he loved unpasteurized milk and cheese. He says he can’t stand the taste of store-bought milk.
Yet Rye, when living in Chicago in the late 1990s and early 2000s, working in software development, struggled to find his favorite dairy. Mainly because it was illegal to sell unpasteurized milk.
Rye eventually found a source in a parking lot of a family medical practice run by Dr. Joseph Mercola outside of Chicago in Schaumburg, Illinois. Mercola would go on to become a health product entrepreneur with national notoriety — and scrutiny — for some of its anti-vaccination viewpoints, articles and books, especially in the age of COVID-19.
But it was there, in that parking lot, Rye says, where some Amish farmers across the border from Wisconsin came to town — secretly — to sell a variety of unpasteurized produce. The farmers met in Mercola’s parking lot, at a kind of raw farmers’ market, which Mercola, Rye says, set up to help its patients have easy access to natural dairy products.
An osteopathic doctor, Mercola ran a successful clinic, with about fifty employees who saw hundreds of patients. Mercola also sold health foods and natural products online, a much smaller operation at the time, at the start of the dot-com boom. More raw milk. “That was my introduction to Dr. Mercola,” Rye says. “He needed help with some (tech) work and one thing led to another.”
Rye started working for Mercola, on the health products website side, in 2004. The doctor started the company in 1997, and when Rye arrived, it was just a tiny fraction of what she would become. “Those first two months,” Rye says, “we had meetings around an eight-foot table.”
Today, Cape Coral-based Mercola, where she moved from Illinois in 2017, finds herself at an unusual crossroads as she prepares to celebrate her 25th birthday in August.
On the one hand, it’s a thriving multimillion-dollar holistic medicine and natural health business, with 150 employees in Lee County, 70 in the Philippines, and another 60 across three distribution centers. Mercola.com, a company spokeswoman said, provides health information in a dozen languages to 10 million readers worldwide. Rye is now CEO, a position he was appointed to in 2008.
The company has also significantly increased its presence in Cape Coral. It opened its first-ever retail store, the Mercola Market & Café, in April 2021 on the ground floor of its headquarters. Additionally, between its roof and carport, the Mercola campus houses more than 950 solar panels that produce nearly 400 kilowatts of energy. Switching to solar power, a $1.3 million project, meets most of the company’s renewable energy needs, the spokeswoman said.
On the other side, according to several national media publications and medical and health industry websites, Mercola itself is tarring the company. His books and statements over the decades lean heavily against vaccinations and giant pharmaceutical corporations – something he readily admits. The New York Times, in a widely shared October 2021 story, called Mercola “the most influential spreader of coronavirus misinformation online.” The article’s caption states, “Researchers and Regulators Say Osteopathic Physician Joseph Mercola Creates and Profits from Misleading Claims About COVID-19 Vaccines.”
The Times story centered on Mercola’s ranking No. 1 on a list of “misinformation dozen” published by a British and American non-profit organization, the Center Countering Digital Hate. In a 40-page report published in March 2021, the CCHR claims that these 12 people were responsible for sharing 65% of all anti-vaccine messages on social media.
In addition to newspaper articles, Mercola’s COVID-19 vaccine videos have been blocked and removed from YouTube and Twitter. Mercola, in a written response to Business Observer, says the attacks on him are meant to stifle debate. Additionally, in interviews Ryan Boland, chief commercial officer of Rye and Mercola, points out that much of what Mercola has said about vaccines, particularly regarding the failure to generally slow the spread of COVID-19 , turned out to be true.
“People on all sides have realized that there is a coordinated attempt to suppress free speech,” Mercola says. “The Center for Countering Digital Hate is just another black money funded front group – another tool in the elitists’ shed. Debates were once encouraged and conducted with respect, but now groups are created to polarize and program the masses, to the point that they are ready to sacrifice freedom of expression more than ever.
Mercola also faced backlash from the federal government before the pandemic. He has received at least three warning letters from the FDA dating back to 2005 for selling unapproved health products. And in 2016, the Federal Trade Commission refunded $2.59 million to customers who purchased Mercola-branded tanning beds after Mercola claimed the tanning beds would not cause skin cancer.
Mercola disputes the FTC’s findings. Mercola’s spokeswoman, in a separate statement, said “the phototherapy light systems it sells provide UVB light to boost vitamin D levels. These systems are typically provided in dermatology offices, and the acting US surgeon general at the time was a dermatologist who lobbied the agency to act. Mercola offered to reimburse customers as there was no other recourse.
Mercola maintains an office at Mercola headquarters, but spends most of his time where he lives, outside of Daytona, the spokeswoman said.
The City of Cape Coral, meanwhile, awarded Mercola $132,000 in performance-based incentives for new jobs in 2019, retroactive to 2018.
At the height of the Mercola-vaccine controversy, some Cape Coral city officials talked about removing the company’s name from the webpage where the city promotes the local headquarters. Councilman Tom Hayden says no action has been taken on the chatter, and he doesn’t expect it to happen again. “He said things that were controversial,” Hayden said in a July 14 interview with the Business Observer“but as far as I’m concerned, that’s his opinion.”
Hayden hasn’t heard any negative comments from voters or other board members in recent months about Mercola. And he notes that with its payroll of 150 people, its community involvement and its local events, the Mercola company is a solid corporate citizen. It acquired its current 60,000 square foot facility for $3.7 million in 2016 and has since spent about $2 million on renovations and amenities, including solar panels.
While quick Google searches may lead to one side of Mercola’s career, the less visible side is what Rye and Boland oversee. They have a dual purpose: to navigate the business through periods of high inflation and recession while making progress in growing the biodynamic food side of the business.
According to the company, biodynamic food, also known as regenerative agriculture, is a “mindful, holistic, soil-focused approach that naturally pulls carbon out of the atmosphere and stores it in the soil.”
Boland spent part of July on the road, meeting with farmers in Iowa, Nebraska and other states about forming regenerative farming partnerships. “We’re looking to work vertically with farmers, and regenerative agriculture is something new,” Boland says.
“Biodynamic foods – it’s the hot trend in food markets,” Rye adds. “Regenerative agriculture has really caught people’s attention.
Rye says focusing on regenerative agriculture also aligns with a core company goal: improving people’s health. “If you look at the health of the United States,” Rye says, “there’s a lot of room for improvement.”
The business side of regenerative agriculture also makes sense for Mercola. Rye says most of the company’s revenue growth comes from new products and categories. The company currently has a multitude of product lines and sub-brands, including supplements; pet food and supplements; organic skin care and personal care; sports nutrition; and biodynamic cotton textiles.
“Everything we create should set a precedent in terms of superior quality and a unique offering that matches customer demand,” says Rye. “That’s what we’re looking for.”
Mercola has grown revenue by about 10% to 15% a year, Rye says, which he calls aggressive but “generally manageable.” He refuses to provide specific figures. “We’re looking for consistency and manageable growth more than anything else,” he says. “If you’re trying to catch the flashy, that’s where you get in trouble sometimes.”
Rye envisions two major current challenges. One is the consolidation of the food industry and the impact on vendors, suppliers and customers when one or two giant players own much of the industry. He cites Nestlé, which owns dozens of global brands and has acquired others. “What tends to happen,” says Rye, “is that kind of influence is really detrimental to anyone trying to start a business or run a growing small business.”
No surprise, the other looming challenge is inflation and a looming recession, something, Rye says, “you have to take seriously.” The company is considering price hikes on certain products and recently changed its shipping strategy to encourage customers to buy more products but less frequently – the anti-Amazon Prime approach. The company will pay shipping costs when a customer reaches a certain price threshold.
Overall, Rye thinks the company’s focus on health and wellness will be an ally in the months and years to come. “People taking care of themselves will always be a priority, even in times of inflation or recession or a combination of both,” he says. “I’m confident we’ll do well, but you need to make some changes.”