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S2G Announces Our First Private Equity Deal Alongside Prairie Capital and Skyline Global Partners

The supplement market is booming. Health and wellness are increasingly becoming top priorities for consumers and as a result the industry grew by 7.08 billion in 2020, reflecting a 14.5 percent annual growth. By 2024 Nutrition Business Journal estimates that the US supplement market will be valued at $66.24 billion. But despite the growing market opportunity, supplement development can be extremely daunting, especially for smaller brands or companies new to the space.

Lief Labs is working to turn this complex process into a seamless experience. The company is a full-service dietary supplement manufacturer and product development innovator based in Valencia, California that produces products through unique partnership models with up-and-coming brands in the VMS (vitamins, minerals, supplements) and nutraceutical spaces.

Lief was founded over 10 years ago by Adel Villalobos, a seasoned industry executive with an extensive background in all aspects of nutraceutical manufacturing and a belief that he could better service nutraceutical marketers by partnering with them early and providing value-added end-to-end services and solutions which allow them to focus on brand building and sales and marketing. Today Lief is focused on producing sustainable exercise and wellness products and has formulated over 1,000 products to date.

Taking a Systems Perspective

As S2G’s first private equity deal, we are thrilled to announce our partnership with Lief Labs, alongside Prairie Capital and Skyline Global Partners, and to support the company as they continue to expand their capacity and harness their expertise to bring health and wellness products to market. We believe that a healthier food system is crucial for fixing the human health and environmental crises we currently face. Supplements can play an important role in advancing human health but for many new innovative brands there are numerous obstacles to bringing products to market.

At S2G we are guided by a systems investing approach which means we engage with many leverage points throughout a system with the goal of more comprehensively supporting the companies we work with as well as larger environmental and social objectives. One of our investment focus areas is novel ingredients that can support better health and environmental outcomes. Lief’s wealth of expertise in the industry as well as their sourcing methods and production capacity enable them to develop and market products that will resonate with consumers. They are also able to leverage their relationships with industry influencers to educate consumers on the value of new products. By partnering with Lief Labs we hope to help develop the infrastructure that will benefit these companies and the larger industry through more efficient and sustainable methods of supplement production and innovative marketing approaches.

The Rise of Supplements

According to a survey conducted by the Council for Responsible Nutrition, more than 75 percent of Americans, or about 170 million people, take at least one dietary supplement daily. While we ideally can meet our nutritional needs through a well-balanced diet, the reality is that 90 percent of people don’t get the recommended amount of important nutrients from food alone. Supplements can help provide nutrients a person can’t get from their diet, increase levels of nutrients for people with deficiencies, support overall and specific wellness goals as well as mental and sport-related performance, complement medical treatment plans, and offer alternative therapeutic options. Especially today with the ongoing COVID pandemic, consumers are looking for products that will support immune health as well as sleep, mood, and stress levels.

“I have seen the industry grow more than 10x since I joined. I believe it’s a testament to our industry’s increasing credibility and commitment to health and well-being.”

- Adel Villalobos, founder and CEO of Lief Labs.

"As we embrace and manage this continued growth and the future of Lief Labs and our industry, what particularly excites me about our new partners is that they also embody our vision to utilize technology and sustainability to continue to advance consumer health,” said Villalobos.

A Full-Service Solution

Supplement brands face numerous hurdles when developing and certifying new products. Sourcing raw materials and finding the right supplier who can provide the necessary quantity and quality standards is far from easy. Understanding how to formulate a natural product under the proper regulations and ensuring you can back up claims associated with labels is also a challenge. Additionally, there are high costs and extensive technical expertise associated with starting a manufacturing line. Lastly in a rapidly growing market, health and wellness brands have to figure out how to stand out from the crowd.

While there are a number of companies offering production capabilities, Lief Labs is unique because it functions more as a product development and ideation house with manufacturing being just one component of their services. In many cases Lief is involved from the earliest stages of product development and the process is defined by constant iteration with many opportunities for the client to provide feedback to ensure the product meets their needs.

Typically, the process begins with a client approaching Lief with a product in mind whether it is a fully formed idea or they are looking to create a product in a particular category. Lief helps with product ideation and utilizes customized pricing and formulation software to quickly formulate and price new products as opposed to the traditional 1-2 week quote time.

Once the client has decided on the product, the product development team will work on building out the formulation. When this is complete the sales rep will send this quote back to the client for tweaks and final approval. Once the client is ready to bring the product to life, Lief begins conducting R&D which entails a flavor formulation process for powders and tablets and fill tests for capsules to ensure the efficiency and flow of the powder. After the final formula is approved the client receives a final quote for approval and then gets onboarded (if they’re new) and places their PO. The sales and account management team then gets the formulation into the manufacturing queue. Lief Labs supports manufacturing at scale with over 25,000 kilograms of blending capacity for powders, and daily production capacity for 5 million capsules and one million tablets.

A Leader in Quality and Sustainability

In today’s market, supplement producers need to be able to cater to consumers who are demanding greater transparency and sustainability. To help their client meet these objectives, Lief will go over their goals for the project when it comes to price, quality, sustainability and innovation. Since there are numerous ways to make any given product, Lief’s innovative and creative approach enables the client to create their ideal product with minimal compromise. For example, if the client is trying to balance between price, efficacy and innovation Lief will create different formulations in the product development phase, offering them cost analysis per ingredient or alternate ingredients at different price points.

Additionally, to meet sustainability goals and help cater to different demographics, Lief offers clients the opportunity to source a variety of sustainable raw materials as well as utilize sustainable packaging. The company has earned and maintains a remarkable number of key dietary production and product certifications to support its customer base including certified kosher, certified Non-GMO, NSF, cGMP, USDA Organic, Gluten Free Certified, BSCG, Amazon Approved, Organic, and Halal. With this range of certifications, Lief can tailor products based on a client's target audience and their brand marketing strategy.

Anchoring the Lief Labs commitment to sustainability, quality, and unique product formulation is the company’s Lief Raws division. Lief Raws is a quality-driven and science-focused performance ingredient supplier, providing forward thinking ingredients to the continuously adapting market. Lief Raws enables the company to support their partners every step of the way through product formulation, scientific education, marketing, and ideation development.

Bolstered by Technology

A number of technological developments have enabled Lief to reach a new standard for product development in the industry. For example, the company uses 3D printing for some of their most common mechanical components which means they can seamlessly create them in-house based on computer generated 3D models. Additionally, vision systems that allow for precise quality checks are driving up the quality standard in the industry and the company has recently begun implementing hi-res vision cameras in their packaging lines to detect defects which would ordinarily be hard or time consuming for a person to verify.

Gearing up for Growth

Lief’s R&D capabilities, industry reputation and high-touch partnership model with its customers are responsible for the company’s incredible growth since its founding. S2G and co-investment partner Skyline Global Partners signed an LOI to recapitalize the company and brought in Prairie Capital as a co-investor.

Lief now plans to evolve and diversify beyond manufacturing and product development to a more technology and data driven model. Lief will focus its growth strategy on key areas, including technology innovation, raw materials and formulations, business expansion, supply chain management, human capital development, customer service resources, increased production capacity, and building out world class manufacturing operations and facilities.

We are excited by Lief Labs’ potential to create innovative, science-backed products in the supplement and wellness industry. We look forward to working with Lief Labs as they build out their supplement development and production capabilities and support health and wellness brands in their pursuit of more effective and sustainable products.

Supporting the Health and Wellness Sector through our Partnership with Lief Labs

Supporting the Health and Wellness Sector through our Partnership with Lief Labs


Sanjeev Krishnan

Chief Investment Officer and Senior Managing Director

Sanjeev Krishnan is passionate about the role of innovation, entrepreneurship, markets and system investing as a theory of change. He has nearly 20 years of experience in sourcing, executing, managing and exiting venture and private equity investments.


Josie Lane

Art Director

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