Getting to know the Bloomingdale company that bought naming rights for the Hoffman Estates arena
The thought occurred to Dan Richard as he was driving east on Interstate 90 from Rockford and passing what then was known as the Sears Centre.
Sears was having financial problems, Richard knew, and eventually might not be able to afford to keep its name on the 11,800-seat multipurpose arena owned by the Village of Hoffman Estates.
"It's going to be someone else before too long," Richard thought to himself. "So the light kind of goes off, and I said, Oh, I guess that could be us, couldn't it?"
It is now. Or rather, it is NOW.
Hoffman Estates and NOW Health Group, owned by the extended Richard family, signed a 15-year, $11.25-million naming rights deal in June that went into effect Sept. 1.
It hasn't worked out exactly as Richard hoped; because of the COVID-19 pandemic NOW Arena hasn't hosted any events.
And with fewer people flying during the pandemic, there aren't as many airplanes overhead for passengers to look out the window and see the company logo painted on the arena's roof.
"Looking back in time we probably would have negotiated for a lower price this year, because as you know there's not a lot of value in an empty building," said Richard, who nevertheless already is looking ahead to an extension to this deal in 15 years. "But I think we have a fair deal. It's long term, and for us it's all about getting our brand out."
Despite the pandemic the company has seen some benefits from the deal. Through word-of-mouth the Bloomingdale-based company seems to have improved awareness of its brand in the Chicago area.
NOW has measured its consumer awareness nationally at 16%, but it's working to move the needle higher.
"We're not Coke or Nike, obviously, but we would like to be. We'd like to be much more significant. So this to us is a big step," Richard said.
Once suburbanites can congregate in large groups again, NOW sees all sorts of ways to take advantage of the deal.
With more than 1,000 employees in Illinois, NOW has a place where it can do company events. It can host industry events there. And NOW, which often works with the charitable organization Feed My Starving Children, can open the arena for large-scale charitable events, such as allowing the organization to bring in large numbers of volunteers over a weekend to pack food bags.
"It's just the right size for us. I think we're really a perfect fit, besides the local aspect," Richard said.
What is NOW?
NOW started in 1968 as a health foods company to support the Health House store run by company founder Elwood Richard, Dan's father. Health House became Fruitful Yield around 1980 when the elder Richard, who didn't incorporate the name properly, lost it to a former employee. NOW has 13 Fruitful Yield stores, all in the suburbs.
NOW produces nutritional supplements as well as foods, cosmetics, pure oils, cocoa butter and essential oils -- about 1,700 products across all brands. It even makes pet products.
The company takes its name from the slogan Natural, Organic and Wholesome, the goal for the company's products, many of which Elwood Richard, a biochemist who died in 2017, devised himself.
"My dad was kind of a super-creative personality. Sometimes they'd win, sometimes they wouldn't. So a lot of crazy ideas but enough good ones to make it work," Dan Richard said.
Dan Richard, NOW vice president of global sales and marketing, joined the company in 1985 after graduating from college. Back then the company had about a dozen employees.
"A whole bunch of my generation started working in the warehouse packaging stuff in the '70s," Richard said. "We were a really small company and we were losing our shirts. In those days the retail stores kept us afloat. We probably lost money, like, 15 years in a row."
The company took off when it took advantage of a national interest in fish oil.
"We've learned that our business runs and stops on these crazes," Richard said. "So when the media says, 'Oat bran cures cholesterol,' or something, then we sell a lot of oat bran. And that's true. It became our No. 1 seller."
NOW began selling the lowest-priced fish oil on the market, "and that just opened doors for us," he added. With access to more stores than ever, the company began to grow, with next big things such as melatonin and shark cartilage capsules selling like hot cakes.
Even as it has grown, NOW has remained a family-owned company. About 40 family members own shares.
Dan's mother, Betty, the family matriarch, has gifted many of her shares to her grandchildren, skipping a generation to limit the burden of estate taxes.
"We definitely have no plans to sell or to go public. My dad would definitely turn over in his grave. That would be a really bad thing," Richard said.
A growth company
The NOW Group that exists today has come a long way from the company Elwood Richard founded more than 50 years ago. For starters, it has more than 1,200 employees today led by CEO Jim Emme.
"And we're hiring left and right. We can't hire fast enough. We have a real hiring problem," Richard said.
The biggest needs are laboratory, manufacturing, shipping and quality inspection jobs. Applicants should expect a lengthy, overly thorough process, he said.
Possibly as much of a third of NOW's sales are overseas.
"And we see that as our future. So we're a large exporter, which is great for the local economy," Richard said. "There's a huge worldwide market that loves American-made products, especially supplements. So we rely on our quality and our honest labeling, and we've developed quite a business for that."
The Fruitful Yield stores are all in the Chicago area, and the company has a manufacturing facility in Roselle. It's also working to open a second manufacturing facility next door in Roselle, aiming for next year.
NOW has averaged low double-digit growth the last 10 years or so, Richard said, and management is very comfortable with that.
"If it was, say, 50%, that would be too fast growth," Richard said. "That would cause problems financially because you'd have to borrow just to buy the inventory. Our modest growth has worked out perfect. Our margins are enough to keep us going."
Still, revenues are up significantly in 2020, more than 20%, and probably will be again in 2021 because of the pandemic. It just makes sense. Many people are looking for supplements such as vitamin C, zinc, elderberry or echinacea to boost immunity against the coronavirus.
"When it goes away, we'll see what happens," Richard said of COVID-19. "I think we'll still have strong international demand that's pent up, and we're looking for international markets to establish other warehouses."
The next company warehouse likely will be in Europe. NOW also has facilities in Reno, Nevada, and in Canada.
Still, Richard said, "We're as local as you can get."
Principles based in faith
NOW carries zero debt. It's not just a business decision. It's also an expression of the family's Christian faith.
"That's one of our core values is to keep zero debt," Richard said. "So that's a biblical principle. It's not an MBA principle, that's for sure.
"When interest rates are under 2% you want to take on as much debt as you can. Well, that works until you have a pandemic and then all of a sudden things change and you find all these businesses going out of business because they were stretched too far. So our long-term commitment is to have as low debt as possible."
The family's faith shows as well in the company's commitment to charitable organizations such as Feed My Starving Children.
And faith also shows in the company's deep commitment to safety, both for its employees and its customers. The safety efforts are thorough and ongoing.
"We talk about it all the time," Richard said. "It's in all of the management metrics."
One more thing: The family hasn't only been good at business. It's been lucky too.
Or maybe it's more than just luck.
"Our think our timing's been divine," Richard said. "Literally providential. I feel like as a company we're smart and we're hardworking and we're honest, but we're not successful for those reasons.
"I really feel like we're a blessed business."