In a little over a week, nutrition industry executives from all over the world will be gathering in Anaheim, California, for the 2010 Nutracon Conference and Natural Products Expo West tradeshow. The Nutrition Business Journal team will be there to meet with industry participants, peruse the massive tradeshow floor, and bone up on the latest issues and trends shaping the global nutrition industry during the Nutracon and Expo West education sessions. We’ll also be presenting our annual NBJ State of the Industry session, during which we will share some of NBJ’s proprietary market data and get down to the “nitty gritty” with a panel of experts about some of the key strategic issues affecting dietary supplements, natural & organic products, and functional foods and beverages. Details about the session are below. We hope to see you there!

NBJ State of the Industry

10:30 a.m. – 12:00 p.m., Friday, March 12, Room 204AB

We’re changing things up a bit for this year’s NBJ State of the Industry presentation, which has become a must-attend education session for many industry executives at Expo West. NBJ Publisher and Editorial Director Patrick Rea will open the presentation with an analysis of how sales of dietary supplements, natural & organic products, and functional foods and beverages fared in 2009 and what we are expecting for 2010. Then, I and Nancy Coulter-Parker, editor in chief of Delicious Living magazine, will interview a panel of industry experts about key issues affecting supplements, natural & organic, and functional products.

On the panel will be:

• Julie Smolyansky, CEO of Lifeway Foods

• Todd Norton, chief operating officer at A.M. Todd Botanical Therapeutics

• Laura Batcha, chief of policy and external relations at the Organic Trade Association

• Mark Fergusson, CEO and chief financial officer at Down to Earth, Hawaii’s only vegetarian natural & organic food store chain

The questions we will be posing to our panelists (and the audience) include:

• Since the election of Barack Obama, the FDA and FTC have stepped up their enforcement of the label claims being used by food and beverage companies. Is this ultimately a good thing for the functional food and beverage industry? What are you expecting in 2010?

• If passed, what ramifications would McCain’s Dietary Supplement Safety Act of 2010 bring about for the industry and consumers? Would the bill do what is needed to weed out the bad players?

• In a statement defending his bill, McCain Dietary Supplement has said that, despite what opponents of his proposed legislation are claiming, “If you take a vitamin now, this bill will in no way restrict your ability to take that vitamin.” Is this true?

• McCain’s bill would require retailers to obtain written evidence from supplement manufacturers documenting that products are registered and adhere to all new FDA requirements. Would such a rule affect a retailer’s ability to offer a wide variety of legitimate supplements?

• The functional food and beverage industry continues to grow at a healthy pace, with new food and beverage products being launched every week. The problem is, however, that some companies will put just a small amount of a functional ingredient into a product just so that they can charge a price premium and promote the ingredient on the product’s packaging and label. How big of a problem is this for the functional food and beverage industry? Is “pixie dust” dosing a common practice? What are the ramifications for the functional food and beverage industry? What’s the solution?

• What really happened to organic during the recession? How did organic sales fare compared to natural sales in 2009, and what is expected for 2010? In what ways were consumers able to save money and still buy organic?

• In 2009, several organic companies introduced a “natural” product or dropped their organic content all together. Do you believe there was a large scale shift from organic to natural, or were these isolated examples?

• Even if only a few companies moved from organic to natural, how do these actions impact consumer perception of the value of organic compared to natural? Some organic companies I’ve spoken with have said consumers are so confused that they believe, in some instances, that natural is actually superior to organic. What are your thoughts on this?

• Does having multiple standards and certifications for natural & organic personal care result in too much consumer confusion?

Is there a question or issue you would like to hear NBJ and our panel of experts address during the State of the Industry presentation? If so, e-mail the question to cmast@nutritionbusiness.com.

Related NBJ links:

Global Supplement & Nutrition Industry Report 2010

February 2010: Functional Food and Beverage Issue

Organic Is Not Immune to Recessionary Woes

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?

I have some very interesting news.

Daniel Fabricant, Interim Executive Director of the Natural Products Foundation, has agreed to join the NBJ Sports Nutrition & Weight-Loss webinar and present an expert review of the September 29 Senate Subcommittee hearing on steroid products being marketed as supplements, the FDA’s recent raid on Bodybuilding.com, the Hydroxycut recall and other regulatory-related events pertinent to dietary supplements, particularly sports and weight-loss products.

Our goal is to provide webinar attendees with an intelligent and realistic view into the current regulatory situation for supplements in the U.S. and Daniel is one of the most informed, if not the most informed, regulatory expert on this situation

To accommodate for Daniel’s schedule, we will be moving the webinar to 3pm ET/1pm MT/12pm PT on October 27th.

We hope you are as excited about Daniel’s involvement as we are.

To register for this event, please go to http://nutritionbusinessjournal.com/supplements/web-seminars/9-15-sports-weight-loss-seminar-nbj-supplement/

The U.S. dietary supplement industry is bracing for another flood of negative media attention following today’s Senate Subcommittee hearing on the topic of sports supplements and steroids. Titled, “Body Building Products and Hidden Steroids: Enforcement Barriers,” the hearing by the Senate Judiciary Subcommittee on Crime and Drugs is expected to feature testimony that paints an extremely grim picture of a rogue sports supplement industry that is putting millions of people—including young and professional athletes—at risk.

Testifying before the Senate Subcommittee will be Michael Levy, director of the division of new drugs and labeling compliance at the U.S. Food and Drug Administration (FDA); Joseph Rannazzisi, deputy assistant administrator of the Office of Diversion Control at the Drug Enforcement Administration (DEA); Travis Tygart, CEO of the United States Anti-Doping Agency (USADA); Daniel Fabricant, interim executive director and CEO of the Natural Products Association (NPA); and Richard Kingman, a partner in the law firm Covington & Burling LLP.

Tygart, who is expected to call for new supplement legislation during today’s hearing, told the New York Daily News that greater consumer protection is needed in the area of sports supplements. “Consumers need to know that there are real people out there who are injured by steroids masquerading as legitimate supplements,” Tygart said. “People need to see what an unfortunate thing it is when someone takes a product that’s supposed to be helping them with their workouts and a few weeks after using the product they’re in the hospital.”

But, as Kingham told USA Today, the solution to the problem of steroid-tainted supplement does not lie in creating new legislation, the solution lies in the FDA fully enforcing the legislation that already exists. “This is a law enforcement issue,” said Kingham, who pointed to last week’s raid of supplement dealer Bodybuilding.com as an example of FDA’s enforcement power.

FDA has reportedly been investigating Bodybuilding.com since 2007. According to an FDA search warrant that was unsealed when the agency searched Bodybuilding.com’s Boise, Idaho-based headquarters on September 24, 23 of 31 supplements purchased over the last two years by FDA investigators from Bodybuilding.com contained anabolic steroids. Bodybuilding.com spokesperson Amanda Cheslock told USA Today that her company does not manufacture the products and is cooperating with the investigation.

Sen. Arlen Specter, a Pennsylvania Democrat, convened today’s hearing after becoming interested in the issue of steroid-spiked dietary supplements following the 50-game suspension of Philadelphia Phillies pitcher J.C. Romero for testing positive for the androstenedione. Romero blamed the supplement product 6-OXO Extreme for the traces of the banned substance found in his urine in August 2008. “We’re looking at whether there’s adequate protection for consumers from getting these supplements which have steroids or steroid-like substances,” Specter told the Associated Press. “These tainted products can cause life-threatening injuries, such as kidney failure and liver injury.”

The products being targeted by Congress represent a fraction of the sports supplement market, which itself is a small piece of the overall $25 billion dietary supplement market. Still, the entire dietary supplement industry is expected to be affected by today’s hearing. While many in the industry are rightly nervous about the fallout and ramifactions following the hearing, others see a potential silver lining to Congress’s actions. As NPA’s Fabricant told USA Today, the end result could ultimately benefit responsible industry. “We’re glad the Congress is looking into this, because anything we can do to separate the legal, safe and healthy dietary supplement industry from the seedy, fly-by-night and unsafe world of illegal steroids is worthwhile,” Fabricant said.

Nutrition Business Journal’s September issue is devoted to the $20.8 billion U.S. sports nutrition & weight-loss market and explores the sales impact recent negative news could have on this sector of the U.S. nutrition industry. To order a copy of the issue, subscribe to NBJ or download a free 32-page sample issue go to NBJ’s subscription page. NBJ will also host a Web seminar on the U.S. sports nutrition & weight-loss industry on October 27, 2009. Learn more or register for the Webinar via the NBJ Website.

Related NBJ articles:

SNWL Sales Suffer Blow from Recession and Flurry of Negative News Events

Elite Athletes Eschew Dietary Supplements Over Fears of Contamination

NSF, HFL and Others Help Firms Prove Their Sports Products Are Safe for Athletes

NBJ’s 2009 Sports Nutrition & Weight-Loss Web Seminar

Say a product will provide an energy boost and put it into a simple 2- or 3-ounce format, and consumers are likely to buy it. At least that’s the premise behind the flood of energy shot products that have hit the U.S. market over the last year. Alacer Corp., makers of the popular Emergen-C powdered fizzy drink supplements, is the latest company to jump into the energy shot market, which Nutrition Business Journal estimates rung up $560 million in sales last year. “We have a healthy respect for the remarkable sales volume achieved by the market’s energy shot players,” said Alacer Corp. President and CEO Ron Fugate. “That’s why we have worked to bring something very special, a real breakthrough, to the energy shots and dietary supplement segments.”

Alacer began shipping three Emergen-C brand shot products to Wal-Mart, CVS, Rite Aid and other mass market retailers in July. Full distribution to all Emergen-C retailers will be completed in October. Two of Alacer’s Emergen-C shots are targeted to energy-seekers: Emergen-C Health & Energy Booster and Emergen-C Alert Energy & Focus Booster. But unlike some of the other energy shots on the market, Alacer’s offerings were not designed with teenage or college-age consumers in mind. “Our shots are targeted, not to people who want to have energy to party all night, but rather to those who want the energy to focus on the task at hand,” said Ken Vargha, Alacer vice president of sales and marketing. Alacer’s Emergen-C Alert shot contains green tea extract and vitamin B-12.

Known for its immune-support powdered offerings, Alacer also introduced an immunity shot called Emergen-C immune System Booster. This product provides 1,000 mg of vitamin C, zince and a blend of prebiotics. The formula taps into what NBJ sees as an emerging trend within the shot market: products that provide an efficacious dose of a condition-specific remedy. Healthy Brand Builders, the company run by beverage industry expert James Tonkin, is also releasing an immune-support shot product under the brand Coremune later this year. This product will feature the natural branded ingredient Wellmune.

Through a distribution partnership with Convenience Valet, Alacer Corp. is following the lead of the super-selling 5-Hour Energy by moving its shot products into convenience stores and gas stations. To date, the convenience channel has generated a large portion of energy shot sales, but the growing number of shot products moving into this channel is forcing some convenience retailers to cut down on how many shot brands they will carry. “Cash raps and small displays are not enough to hold the category,” said James Tonkin, principal of Healthy Brand Builders. “Eventually retailers may have to develop additional space to sell shots in the store.”

Alacer’s shot products will retail for $2.99 for a single shot or $4.99 for a double shot pack, making them competitively priced with other energy shot products on the market. Vargha said initial retailer enthusiasm for the Emergen-C shot products surpassed the company’s expectations. “We were surprised by the demand, which exceeded our initial capacity,” he added. “We are now back on track to supply everyone with as much product as they want.” Alacer will launch a national ad campaign for its new shot offerings in October.

NBJ’s Sports Nutrition & Weight Loss issue, which publishes this month, includes an in-depth look at the energy shot market that features interviews with 5-Hour Energy, 6-Hour Power, Red Bull and other brands operating in the category. To order the issue, subscribe to NBJ or download a free 32-page sample issue, go to NBJ’s subscriber page.

Related NBJ links:

$560 Million Energy Shot Market Pumps Up Flattening Energy Drink Sales

Powdered, Effervescent Delivery Modes Grab Growing Market Share

2009 Supplement Business Report

Related Natural Foods Merchandiser links:

Be a Sport