In a May 18 Sports Illustrated cover feature titled “Supplements: The Dangerous Obsession with Improved Performance,” David Epstein and George Dohrmann do their best to deliver a knock-out punch to the sports supplement industry and the Dietary Supplement Health and Education Act (DSHEA), which the writers say is the basic reason the sports supplement industry has become “a Pandora’s Box of false claims, untested products and bogus science.”

The piece brings up numerous examples of professional players being punished for using supplements spiked with banned substances, delves into the recent Hydroxycut recall and rehashes the dark days of ephedra. It also features several sports supplement retailers and product developers who reap riches from selling and concocting stimulant-filled products that can be sold “with no proof of effectiveness or safety, and without approval from the FDA.” The story goes on to talk about about how GNC salespeople are paid commission by sports supplement manufacturers to push their products on “unsuspecting customers” who “are sometimes steered to a supplement that is inappropriate for their needs.” It ends with discussion of sports supplement companies manipulating the findings from clinical research or rigging the studies altogether. Taken as a whole, the articles paints a grim portrait of a rogue sports supplement industry that the writers say Nutrition Business Journal research estimates generated nearly $20 billion in U.S. sales in 2007.

The trouble is, the writers use carefully chosen examples to tell only one side of the story—and they misleadingly cite NBJ research to create a picture of an industry that appears much larger than it actually is. In 2007, U.S. sales of sports supplement products totaled $2.5 billion, while the entire U.S. sports nutrition & weight-loss (SNWL) sector—which includes sports supplements, weight-loss pills, meal-replacement supplements, low-carb foods, nutrition bars, and sports & energy drinks—generated just under $20 billion in sales in 2007. Yes, sales of sports supplements have been growing but they still constitute a relatively small piece of the overall SNWL market—and this certainly was not made clear in the way Sports Illustrated cited our research.

Exposés such as the Sports Illustrated article are, unfortunately, not new for the dietary supplement industry, and they will continue as long as there are examples of products containing banned substances, of researching being manipulated, of false or misleading claims, or of people becoming sick after using a supplement—even if these instances do not reflect the overall nature of the supplement industry at large.

The good news is that now the supplement industry has good manufacturing practices (GMPs) and the serious adverse event reporting (SAER) system to ensure supplement product quality and demonstrate the safety of dietary supplements. We also have organizations such as the Council for Responsible Nutrition, the Natural Products Association and NSF International to ably communicate the positive, responsible side of the supplement industry and help ensure the safety and quality of supplement products. But, in this day and age, the industry is likely to need more than that if it wants to protect its reputation and current regulatory structure. To weather the current media storm, all supplement companies are going to need to help defend the industry by strictly adhering to GMPs and DSHEA, by speaking out against potentially damaging products and companies, and by only doing business with those companies whose practices and ideals they support.

Related links:

How Worrisome is the Hydroxycut Recall for the Dietary Supplement Industry?

Industry Making Strides in Improving Tarnished Image of Weight-Loss Supplements

New Supplement Regulations Most Important for Industry Since Passage of DSHEA

When Barack Obama was asked by a licensed acupuncturist and massage therapist during an April 29 town hall meeting how complementary & alternative medicine will fit into his healthcare agenda, the president said he is an advocate for doing what works. “I think it is pretty well documented through scientific studies that acupuncture, for example, can be very helpful in relieving certain things like migraines and other ailments—or [be] at least as effective as more intrusive interventions,” Obama told gatherers at the meeting, which took place in Arnold, Missouri. “I will let the science guide me.”

The president went on to tout the appointment of former Kansas Governor Kathleen Sebelius as the new Secretary of Health and Human Services as a step in the right direction for building a healthcare system that is based on science, cost efficiencies and disease prevention. “One basic principal that we know is that the more we do on the prevention side, the more we can obtain serious savings down the road,” Obama said. “So giving children early checkups, making sure that they get immunized, making sure that they are diagnosed if they’ve got eyesight problems, making sure that they’re taught proper nutrition to avoid a life of obesity—those are all issues that we have some control over. And if we’re making those investments, we will save huge amounts of money in the long term.”

Although Obama’s comments certainly shine a ray of hope for complementary therapies, including dietary supplementation, they also further demonstrate the need for such therapies to be backed by solid, defensible research. Nutrition Business Journal will explore the state of supplement research in our Nutrition Industry Overview issue, which publishes in July. To order your copy of the issue, subscribe to NBJ or download a free 32-page sample issue, go to www.nutritionbusinessjournal.com.

NBJ’s 2009 Integrative Medicine report provides a detailed analysis of the $45 billion U.S. integrative medicine market.

Related links:

Briggs: Supplement Use Is Being Influenced by Science

Integrative Medicine Stakeholders Organize to Address Healthcare Crisis

Science: The Engine and the Driver of the Supplement Industry

The FDA is bracing for an onslaught of dietary supplements and other products making false or misleading claims for the H1N1, or swine flu, virus. A quick Internet search found that a number of U.S. companies are currently touting products they say can prevent or cure the H1N1 virus. In an effort to get out in front of what could be a public relations nightmare and provide fuel for tighter supplement regulation in the future, a coalition of supplement industry trade associations issued a statement today urging supplement manufacturers and retailers to “refuse to stock or sell any supplements that are presented as treating or curing swine flu” and to “refrain from promoting any dietary supplement as a cure or treatment for swine flu.”

The groups backing the statement are the American Herbal Products Association, the Consumer Healthcare Products Association, the Council for Responsible Nutrition and the Natural Products Association. In their statement, the groups also noted that “federal law does not allow dietary supplements to claim to treat any diseases, including swine flu” and that they are “unaware of any scientific data supporting the use of dietary supplements to treat swine flu.”

The statement did note that “there are dietary supplements that have much to offer in terms of enhancing general immune function. However, therapies for the treatment of swine flu should only be recommended by qualified healthcare professionals or public health authorities.”

Given mounting public anxiety in the United States and beyond over the fast-spreading H1N1 virus, the associations’ action is an important step in encouraging the supplement industry to act responsibly and legally in the face of a potential health crisis. Let’s just hope companies heed their warning rather than put the industry in jeopardy by attempting to milk profits from public fear.

Related links:

Natural Products Foundation Urges full Enforcement of the Law Regarding False Advertising for Dietary Supplements

Industry Making Strides in Improving Tarnished Image of Weight-Loss Supplements

Avian Flu: Consumer Scenarios and Responsible Marketing

NBJ had the opportunity to speak with GNC Chief Executive Officer Joe Fortunato on March 23 regarding the company’s impressive 2008 performance. GNC posted sales growth of 6.7% for the year, with same-store sales growth of 2.7%. Perhaps more impressive were the the revenue gains in the fourth quarter across all divisions, even in the midst of a severe consumer spending downturn. In our conversation, Fortunato talks about some of the factors that contributed to GNC’s success in 2008, as well as the the company’s outlook for 2009 and beyond.

NBJ: What were some of the main growth drivers in Q4, and for the entire year?

Joe Fortunato: We had a really strong vitamin business throughout the year and we had a reasonably strong sports business throughout the year. Our sports business really accelerated in our own brand. Our Pro Performance brand grew in strong double digits and it has started out this year extremely well. At one point [the Pro Performance product line] was more of a house brand. Today, we’ve accelerated the brand through science and innovation and new product introductions to be anywhere from an entry level brand to up to a premium brand. That brand equity and the innovation we’ve brought to the brand is really starting to pay off.

NBJ: Your manufacturing/wholesale division was up almost 14% in Q4, what led to that double digit growth?

JF: If you remember back to the [Royal Numico N.V.] days, we cut out almost all contract manufacturing. That was a Numico decision and that was a very, very bad decision on their part. At one point, without the Rexall business, we were as low as $14 million in contract manufacturing business. Today we’re doing over $125 million in contract manufacturing business. So that’s not only accelerating, but we’ve made a very pointed effort strategically to go after more contract manufacturing to get better absorption in our manufacturing facility. We’ve not only been able to get more contract manufacturing business since 2003-2004 and grow it steadily every year; we’ve also enhanced the margins coming out of that business.

NBJ: Why was it a bad decision by Numico to cut contract manufacturing?

There are two reasons. First of all, if you don’t make it, somebody else will make it for them. Second, if you have the capacity, you may as well try to absorb it. It helps control the costs of the GNC brand by absorbing that capacity.

NBJ: Same-store sales continued to improve despite a weakening economy, what factored into that growth? We’ve always heard that athletes are more brand/product loyal in their purchasing habits than many other market segments; do you think that’s true? How does that tie in with GNC’s 2008 performance?

JF: If you look back over history, we have developed tremendous brand loyalty at GNC. In the vitamin business, I think the brand loyalty is second to none. With Pro Performance developing the way it has, the brand loyalty in the sports business is continuing to accelerate. So the answer to that would be that the brand–the recognition of the brand, the loyalty from consumers and the integrity that the brand represents–has really really been the foothold that GNC has capitalized on over the past couple of years. We continue to differentiate our brand. Our mantra three to four years ago was to differentiate. The business was becoming too commoditized. I felt the way to win the game was to differentiate GNC from the rest of the field. Science and innovation is one of the ways we have done that.

NBJ: How have internet sales contributed to GNC’s business?

JF: Our web business grew about 28% in 2008. It’s growing very fast again in 2009. We plan to continue to accelerate the website and we are investing about $5 million over the next few years to redevelop the whole thing. The functionality will be redone. It will have an interactive feel to it. They’ll also be some social networking components within the next 12-18 months. Obviously we are looking at ways to get more aggressive on the web to be competitive with some of our major web competitors.

NBJ: What percentage of GNC’s business is done on the internet?

JF: Web sales are very small component, less than 3%. I think our web business in the next 3 years will be $125 million. We’ve just touched the surface there, it wasn’t a priority early on, but we’ve made it more of a priority.

NBJ: Has the economic recession helped GNC’s private label [Pro Performance brand]? NBJ has seen examples of consumers trading down to private label in the foods market to maximize value.

JF: Even with our entry level products, quality is always a strength of ours. We’ve been very conscientious of what’s going on in the economy, so what we’ve done is allowed for a good price point where people come in and they want to try things. Then, we’ve positioned the consumers into more complex premium formulations as they become acclimated with the use of supplements. The mentality of the consumer is that they always want the best. Once you get them involved in the business, that’s more price point oriented, after that it’s all about the brands and the trust and the integrity and offering the best products in the marketplace. That’s how we play our retail business.

NBJ: How has the recession impacted the company?

JF: I couldn’t sit here and say we haven’t been impacted. We’ve been conscious of the potential impact the economy could have on us. I think we’ve been more promotional because of that. We went into January and February with some very strong promotions. We are very sensitive to pricing with our consumers. We’ve absorbed raw material price increases rather than passing them along to our customers. To put a finger on how much we’ve been affected is hard to do; everybody has been affected a little bit. One thing that helps out is that this industry is less discretionary than a lot of other industries.

NBJ: What is your outlook for the rest of 2009 and 2010? You’ve weathered the economic storm pretty well; do you see more success down the road?

JF: First of all, I couldn’t be more pleased with how we performed during this economic downturn. The exciting part is that we still have tremendous opportunities ahead of us. We have more initiatives than we can handle. We are one of the few businesses that can be more selective about how we grow this business moving forward–what categories we’ll focus on more effectively, how we position our business more effectively, there are just numerous, numerous opportunities.

We’ve invested heavily in the business–we’ve put in new point of sale registry systems that have cost us somewhere in the range of $20 million. So we’ve got better training and selling tools in the stores. We have higher end sophistication in regards to technology, better communication with our employees, better cross-selling opportunities that are suggested on register systems–all things that can help advance interaction with employees and consumers. We also invested $5 million in the web business, we’ve invested a couple million dollars in WebMD for relationship over a two and a half year period, we’ve invested in a new creative advertising agency in addition to our normal marketing. That has paid off tremendously. The payoff on our advertising is the best in the 20 years I’ve been here.

The mindset here has been to over-deliver, maintain a strong performance during this downturned economy and think logically about how most effectively to do that. I think we’ve managed that very well. Then the other component has been to start investing in the business to give us upside potential for the future. We’ve been fortunate enough to do both; we’ve hit the performance numbers and beat them and we’ve invested in the business and we will continue to invest in 2009 to position ourselves in 2010, so I think we’re in a very good position right now.

Related Links:

CRN: Supplements Are Still a Priority for Consumers, Despite Slumping Economy

Health Clubs and Gyms Work to Bulk Up on Sports Supplement Sales

Web Pumps Up Sales of Sports Supplements

With President Obama in office and the United States hungry for improved health and wellness, the prospect of true healthcare reform seems more plausible than it has in decades. Advocates of better nutrition and creating a healthcare system that focuses on preventing disease before it takes hold believe the time could be right for finally building pragmatic, integrative solutions to some of the United States’ great healthcare challenges. Others, however, believe the winds are actually turning in favor of closing the door on government-funded research of complementary and integrative health modalities.

In fact, according to a March 17 Washington Post article, a move to defund the National Center for Complementary and Alternative Medicine (NCCAM) is picking up steam. Here’s an excerpt:

The impending national discussion about broadening access to health care, improving medical practice and saving money is giving a group of scientists an opening to make a once-unthinkable proposal: Shut down the National Center for Complementary and Alternative Medicine at the National Institutes of Health.

The notion that the world’s best-known medical research agency sponsors studies of homeopathy, acupuncture, therapeutic touch and herbal medicine has always rankled many scientists…

“With a new administration and President Obama’s stated goal of moving science to the forefront, now is the time for scientists to start speaking up about issues that concern us,” Steven Salzberg, a genome researcher and computational biologist at the University of Maryland, said last week. “One of our concerns is that the NIH is funding pseudoscience.”

Not surprisingly, after this article was published, the blogosphere lit up with people who both strongly oppose and favor the idea of defunding NCCAM. According to the Nature’s Answer to Cancer blog, which is written by Kim Dalzell, PhD, RD, “the idea for shutting down NCCAM, as reported in the Washington Post, came about because the Obama transition team felt that NIH was funding pseudoscience and there needed to be a redirection of funds for real science. The proposal generated 218 comments, most of them in favor, before the notice closed on Jan. 19.”

Just what this stepped-up push against NCCAM will ultimately mean remains a question. However, this movement stands in stark opposition to the growing acceptance of integrative medicine by the conventional medical community and the desire mounting for the creation of a healthcare system centered around promoting wellness and a patient’s whole health, as was seen during the Institute of Medicine’s Summit on Integrative Medicine and the Health of the Public, held February 25-27.

As Ralph Snyderman, MD, chancellor emeritus for health affairs at Duke University and chair of the Summit, told Nutrition Business Journal in late 2008, the need for such reform is dire. “Despite spending more than any other country on healthcare — $2.3 trillion a year — 47 million Americans are uninsured, and those who are insured often don’t have access to any type of coherent, coordinated way to maintain their health,” Snyderman said. “Even with individuals who are well insured, when an event occurs, they realize how uncoordinated and uncaring the system is. This is the American healthcare dilemma.”

“If we fail to seize this unique opportunity to adopt a pragmatic, integrative approach to healthcare it will constitute a failure and we must not fail,” Senator Tom Harkin, D-Iowa, told the more than 600 people attending the Summit on Integrative Medicine. “It is my intention to change our health system and to place integrative health care at the heart of the reform legislation we will pass this year.”

Want to immerse yourself in the world of integrative medicine and learn more about the opportunities and challenges facing integrative practitioners? Check out NBJ’s 2009 Integrative Medicine report, which features an in‐depth analysis of the U.S. integrative medicine market in a time where many consumers are looking for less‐expensive alternatives to conventional healthcare. This report focuses on nine primary alternative health service modalities—Chiropractic, Traditional Chinese Medicine, Acupuncture, Homeopathy, Massage Therapy, Naturopathy, Ayurveda, Osteopathy, and Nurses and MDs—and includes discussion of the key trends affecting each of these modalities and the integrative medicine industry as a whole. It also provides 12 years worth of data, including market size, growth, revenue estimates for therapies and services, and practitioner channel supplement sales. In addition, the report includes consumer healthcare spending estimates and an analysis of the condition‐specific supplement, OTC and prescription drug markets in 16 categories, ranging from joint health to gastrointestinal health.

Related links:

Integrative Medicine Stakeholders Organize to Address Healthcare Crisis

Briggs: Supplement Use is Being Influenced by Science

There’s a Time for Fish Oil, and There’s a Time for Bypass Surgery, Guarneri Says