Nutrition Business Journal

The news for the U.S. dietary supplement industry was huge Wednesday: Sen. John McCain, R-Arizona, and Senator Byron Dorgan, D-North Dakota, unveiled a bill that would ramp up regulatory oversight of the entire $25 billion U.S. dietary supplement industry—from suppliers to manufacturers and marketers to retailers. Part of the impetus for the bill, named the Dietary Supplement Safety Act of 2010, are the numerous illegal steroids and drugs being sold as sports supplements. The bill is being championed by the U.S. Anti-Doping Agency (USADA) and sporting leagues, including Major League Baseball.

“Like many of you, I am looking forward to watching the Super Bowl this Sunday and the Winter Olympics later this month,” said McCain, who was surrounded by celebrity athletes from skiing, swimming, cycling, baseball and football during the press conference announcing the bill. “However, a little over a year ago the NFL suspended six players, including two players from one of the teams competing this Sunday, for violating the league’s anti-doping policy.”

Kimberly Lord Stewart, editorial director of Nutrition Business Journal’s sister publication Functional Ingredients, summarizes the proposed bill and the changes it would deliver to the Dietary Supplement Health and Education Act (DSHEA) of 1994 in a story posted on the magazine’s Website.

Immediately following the introduction of the bill, the Council for Responsible Nutrition (CRN), the Natural Products Association (NPA) and the American Herbal Products Association (AHPA) released statements.

“CRN looks forward to the opportunity to study the legislation and find common ground with the sponsors and supporters of this legislation,” said CRN President and CEO Steve Mister. “Where specific provisions are extensions of positions we have already supported and lobbied for, we applaud more voices joining with ours.”

“Our industry has long supported efforts to remove the relatively few bad actors who market adulterated products,” said John Gay, NPA executive director and CEO. “We have advocated for additional enforcement funds for regulators, and for giving regulators additional authority to act. What we cannot support is wholesale changes to a regulatory structure that is working, and could work better if the measures we have supported were adopted. A series of new laws for criminals to ignore is not the answer.”

“Though we have not yet examined this bill completely, it places new burdens on dietary supplements that are not required for any other class of food,” said AHPA President Michael McGuffin. “And at least in the case of the proposed policing responsibility for retailers, it appears to be more stringent than retailer requirements under current drug laws.”

NBJ will follow up in next week’s e-newsletter (which publishes on Tuesday) with an analysis of what such regulatory changes could mean for U.S. dietary supplement sales in the short and long-term. Sign up for our free weekly e-newsletter via the NBJ Website.

Functional Ingredients magazine will publish a podcast discussing the proposed bill with CRN on its Website later today.

Related NBJ links:

NFL Suspends 6 Players for Banned Substance, Balanced Health Products Recalls Supplements

2009 Supplement Business Report

Is USADA’s ‘Supplement Safety Now’ Campaign a Threat to the DSHEA?

A literature review article published February 1 in the Journal of the American College of Cardiology demonstrated once again how deep the misunderstandings over herbal supplements and how these products are regulated runs in the United States—and how important the work of industry trade groups, such as the Council for Responsible Nutrition (CRN), to refute such misunderstandings is today. The article, titled “Use of Herbal Products and Potential Interactions in Patients with Cardiovascular Disease,” warned that herbal supplements may be dangerous for people taking heart disease medication. It also argued that there is a general lack of science proving the safety and effectiveness of herbs.

CRN quickly responded to the review article, which triggered a round of negative mainstream news stories on the risk of herbal supplements. “This article represents a biased, poorly written and contrived attack on herbal supplements,” said Douglas MacKay, ND, vice president of scientific and regulatory affairs at CRN. “We question how a peer-reviewed publication would even accept an article such as this, given the fact that the authors make conclusions about ‘herbal remedies’ based on their own uninformed, inaccurate, and outdated interpretation of the law which covers dietary supplements, including herbal supplements. The article contains sweeping generalizations, often not backed by relevant citations, and copious factual errors, including a reference to products—some of which are not actually herbal supplements—that produce adverse effects on the cardiovascular system.”

CRN went on to point out how U.S. supplement regulations have been strengthened by the implementation of good manufacturing practices and the serious adverse event reporting law for all dietary supplements. “In the first full year that the law requiring manufacturers to report serious adverse events was in effect, FDA reported receiving 1,080 adverse event reports, only 672 of which were considered serious—for all dietary supplement products,” MacKay noted. “For the same year, FDA received over 526,000 adverse event reports related to drugs and biologic products, over 300,000 of which were considered serious, including close to 50,000 deaths.”

In a bit of good news for the industry, CRN’s communication efforts on this article reached reporters, many of whom included at least some of MacKay’s comments in their news pieces. It is this type of outreach that earned CRN a 2009 Education Award from Nutrition Business Journal. Media education was a key focus last year for CRN, which engaged with reporters and responded to inaccurate stories about the industry or the safety of supplements.

Such efforts help address a major concern for responsible supplement companies: protecting and enhancing consumer confidence, said Randi Neiner, director of market research for Shaklee Corp. “CRN has taken a responsible, fact-based approach to informing writers about the supplement industry and to correcting communications that misrepresent the industry,” Neiner told NBJ. “They continually correct the misunderstanding that our industry is not regulated and respond to misrepresentations of research results that are inconclusive or not representative of the totality of available data. They cite good science that supports responsible supplementation, while at the same time communicating our industry’s ongoing concern over questionable ingredients, studies and claims. This serves not only our industry but the consumer as well.”

Related NBJ links:

2009 Education Award: CRN

Fitzgibbon: Research Bar Being Raised for Supplements

Will JAMA Study Linking Folic Acid to Cancer Affect Consumer Sales?

Top 50 Herbs in the U.S.: 2000-2008 - Chart 83

Drum roll, please…

Nutrition Business Journal announced the recipients of its 2009 NBJ Business Achievement Awards this month, and the winners—and nominees—proved that positive things can be born amidst adversity. Whether they were expanding their sales by double digits, buying up new businesses that will better position them for the future, creating a product breakthrough, educating others on the benefits of the industry’s products, or donating their time and talents to help others in need, our 2009 winners represent companies and executives who bucked the downward trend last year and serve as beacons of hope for the coming decade.

Profiles of the winners are published in NBJ’s Awards and Executive Review issue. Winners will also be honored during an awards dinner, to be held at the 2010 NBJ Summit. This year’s Summit will take place July 20-23, at the St. Regis Monarch Beach Resort in Dana Point, California. We look forward to celebrating all of our 2009 award winners later this year at the NBJ Summit. We hope you can join us.

2009 NBJ Business Achievement Award Winners:

Efforts on Behalf of the Industry

Anthony Almada

National Animal Supplement Council

International Alliance of Dietary Supplement Associations

Product Merit

Cardiokinase by Pure Prescriptions

Soléo Organics by Skin Elements USA

Scientific Achievement

USANA

Fast-C by Scientific Food Solutions

Growth in Small Companies

Zevia

Azantis

Growth in Mid-Size Companies

Annie’s

Growth in Large Companies

Living Essentials (5-Hour Energy)

Europa Sports Products

Environment & Sustainability

United Natural Foods Inc. (UNFI)

Lotus Foods

Education

Pharmavite

Council for Responsible Nutrition

Investment in the Future

NOW Foods

Management Achievement

Fortitech

Philanthropic Activities

Michelle Goolsby

Organic Excellence

Kathleen Merrigan

Deals of the Year

Alticor-Metagenics

Atrium Innovations-Garden of Life

Vitamin Shoppe IPO

GF Capital-Airborne

Mead Johnson Nutritionals IPO

Coca-Cola Co.-ZICO; Pepsi-Amacoco

Nestlé Waters NA-Sweet Leaf

Herbalife-Micelle Laboratories

Naturex-Natraceutical Group

Vitacost.com IPO

Stock Performance

NBTY

Whole Foods Market

Nu Skin Enterprises

Lifetime Achievement

Announced at 2010 NBJ Summit

If you want the inside scoop on investment activity within the U.S. nutrition industry, turn to David Thibodeau. As a managing director in Canaccord Adams’ Investment Banking Group, Thibodeau focuses on mergers & acquisitions and public and private financings in Canaccord Adams’ Health, Wellness & Lifestyle franchise. Nutrition Business Journal recently sat down with Thibodeau to recap the significance of the big deals that transpired last year in the U.S. nutrition industry and discuss the general mood of investors as we move into 2010.

NBJ: How would you describe the overall mood in the financial/investment community right now?

David Thibodeau: We’re seeing investors start the year with guarded optimism. In the second half of 2009, we saw both the equity markets and the M&A markets come back to life. There were two very successful IPOs in the nutrition space last year: Vitamin Shoppe and Vitacost.com. In the fourth quarter of 2009, approximately 69 IPOs were filed with the SEC—this was a much more robust number than we saw during fourth quarter of 2008, when only seven companies filed to go public. The prevailing feeling is that the equity markets are open and will be open through at least the first half of 2010. We also saw renewed interest from private equity in the back half of 2009. Reasonable levels of leverage are creeping back into the market, and this is helping to support recent private-equity backed transactions.

NBJ: 2009 wasn’t a particularly active year for investment or M&A deals in the nutrition industry. Of the deals that did occur, what do you believe was most significant and why?

DT: 2009 was the year of the strategic deal. Any of the deals that were consummated could be considered significant: We saw a multi-level marketing company enter the healthcare practitioner space through the Alticor-Metagenics deal; big pharma re-entered the nutrition space through the Sanofi-Aventis purchase of Chattem; and an international supplement company predominantly focused on the healthcare practitioner channel, Atrium, entered the health food/specialty channel through its purchase of the supplement company Garden of Life. Taken as a whole, these transactions suggest a fundamental shift within the nutritional supplement playing field. These moves by large, well-financed acquirors point to a newfound acceptance of the health benefits and profit potential of the nutritional supplement space. I believe we will continue to see significant strategic moves in 2010.

NBJ Subscribers can read the full Q&A with Thibodeau in the upcoming Awards and Executive Review issue, which publishes later this month. Subscribe to NBJ or download a free sample issue via the NBJ Website.

Related NBJ links:

Atrium Solidifies Standing in Natural and Specialty Retail with Garden of Life Acquisition

Sanofi-Aventis Purchase of Chattem Puts Dexatrim, Garlique Brands in French Hands

M&A and Investment Activity Slows for U.S. Nutrition Industry

Metagenics CEO: We Need Alticor’s Backing to Make a Dent in Chronic Illness Epidemic

Two non-profit organizations that are near and dear to Nutrition Business Journal’s heart were featured in Nicholas Kristof’s New York Times op-ed column on January 3. Titled “World’s Healthiest Food,” the column lauded the work of Project Healthy Children (PHC) and Vitamin Angels to eradicate micronutrient malnutrition through food fortification and supplementation. Folic acid and other micronutrients—which are often tragically absent from the food supplies within developing countries such as Honduras and Rwanda—are “miracle” substances, Kristof wrote. “There’s scarcely a form of foreign aid more cost-effective than getting them into the food supply,” he added.

PHC, winner of NBJ’s 2008 Nutrition-Related Non-Profit award, works with governments and private industry to establish efficient and cost-effective food-fortification programs that improve the health of people around the globe—every time they eat a meal. “Our mission is to help develop and implement food-fortification strategies in seven countries over seven years covering 70 million people,” PHC Founder David Dodson told NBJ last year. “We go into a country with the intent of leaving as quickly as possible, but we don’t leave until the food is fortified. That is our commitment to the country, to our donors and to ourselves.”

Vitamin Angels, winner of a 2005 NBJ award, is well known (and supported) throughout the nutrition industry for its work to aggressively address the problem of global malnutrition—one vitamin at a time. “One of our tag lines at Vitamin Angels is: ‘Be an angel, save a life.’ This is not something that is hopeful. This is a literal reality,” Vitamin Angels Founder Howard Schiffer told NBJ last year. “We are saving lives every day. For this industry, that is a very powerful message and initiative to align yourself with. To be able to say, ‘We are working with Vitamin Angels. We are saving lives every day.’ That is very powerful.”

According to Kristof, adding iodine, iron, vitamin A, zinc and folic acid to food is pretty inexpensive—costing about 30 cents per person per year—but highly effective. “As the United States reorganizes its chaotic aid program,” Kristof wrote, “it might try promoting what just may be the world’s most luscious food: micronutrients.”

My hope is that such premium media coverage earns PHC, Vitamin Angels and other organizations working to eliminate malnutrition the support and funding they need to continue doing their good work in 2010 and beyond. If your company does not yet support one of these organizations, please consider getting involved this year.

On a different note, NBJ will announce its 2009 Award winners later this month. Once again, we are recognizing an impressive lineup of companies, executives and organizations within the global nutrition industry.

Related NBJ links:

Vitamin Angels: ‘We Are Saving Kids’ Lives, And We Can Prove It’

Project Healthy Children Takes on Micronutrient Malnutrition with Global Food-Fortification Efforts