Ad Claims, Q3 Results, Private Placement: Health & Wellness Industry News

NAD tips Balance of Nature claim to FTC; Vitamin Shoppe sales down 8.5%; ChromaDex gains $23m in private placement; and more health and wellness news in brief.

NAD tips Balance of Nature claim to FTC

Whole foods supplement marketer Balance of Nature Inc. might have to prove to the Federal Trade Commission that its products prevent cancer, one of the firm's claims the Council of Better Business Bureaus' investigative arm suggests FTC scrutinize. The Las Vegas firm did not response substantively to the National Advertising Division’s request to substantiate claims or participate in any way in the industry self-regulation process, NAD announced Nov. 6. As part of its routine monitoring program and in conjunction with its initiative supported by the Council for Responsible Nutrition to expand its reviews of supplement product ads, NAD requested substantiation for Balance of Nature's online claims including "health benefits in a serving of Balance of Nature are equivalent to 10 servings of real fruits and vegetables" and the brand "prevents cancer." CBBB investigative arms submit their concerns about consumer product advertising to FTC when firms fail to respond to requests for substantiation or to follow suggestions for changes in their ads following reviews. The referrals do not compel action by the commission, which expects that rather than potentially face the costs of responding to FTC enforcement, firms linked to the challenged advertising will reconsider and opt to participate in the industry self-regulation process.

Vitamin Shoppe sales down 8.5%

Growing competition and pricing pressures continued to affect nutritional, health and wellness product manufacturer and retailer [Vitamin Shoppe Inc.] in its fiscal 2017 third-quarter as net sales fell 8.5% to $288.2m. "We know that we're going to need to be appropriately price competitive but we believe over time we're going to be able to continue to do that while continuing to drive good margins on the business itself," said CEO Colin Watts on Nov. 8 during the Secaucus, N.J.-based firm's earnings briefing. It reported the sales dip was due to ongoing challenges with the sports nutrition division and comparing against a sales promotion that was not repeated during the July-September period this year; its reported net loss was $86.2m after reporting net income of $11.4m in the year-ago period. "What I think you're going to see us continue to do is make smart price adjustments so the customer sees from us the appropriate price value that they would expect from a retailer like the Vitamin Shoppe and put us in a position to run our fair share of customer trips across both bricks and mortar as well as online," Watts added.

Driving sales growth for Vitamin Shoppe is the Spark subscription auto-delivery program launched chain-wide during the quarter following a pilot in the previous quarter. The firm reported its test analytics show customers using Spark for three months were spending 50% more. Vitamin Shoppe also reported it is "stabilizing" its Nutri-Force manufacturing business during 2017 by reducing third-party customers 85% and reducing stock-keeping unit complexity 77%, creating almost $3m in annual labor savings. The reported operating loss at Nutri-Force during the quarter was $4.5m, including $3.5m charges from inventory management and turnaround charges. (Also see "Vitamin Shoppe Turnaround Tools Include Auto-Delivery, Price-Matching" - HBW Insight, 9 Aug, 2017.)

ChromaDex gains $23m in private placement

ChromaDex Corp. will to sell around $23m of common stock in a private placement led by venture capitalists and international strategic investors and expected to close around Nov. 17. The firm on Nov. 7 said it agreed to sell more than 5.41m shares at $4.10 per share and will use the net proceeds to fuel international expansion, enhance domestic initiative, drive clinical research and support general corporate purposes. The shares will not be registered as securities and may not be offered or sold in the US outside of the private placement.

The Irvine, Calif., firm developed Tru Niagen proprietary vitamin B3 for enhancing cellular energy production and Niagen Nicotinamide Riboside, the first commercially available, "nature-identical" form of NR that acts as a potent and bioavailable booster of nicotinamide adenine dinucleotide, vital to functions that ensure proper cellular and energy metabolism. “ChromaDex is the world’s authority on NAD+ precursors and we now have the assets in place to further our R&D around the anti-aging capabilities of Niagen and to accelerate our pipeline of additional NAD+ precursors,” said co-founder and CEO Frank Jaksch Jr. in ChromaDex's release.

Mannatech third-quarter sales off 12.8%

Health and wellness product direct seller [Mannatech Inc.] reports its third-quarter total sales slumped 12.8% to $42m on dips across its regions partly due to foreign currency exchange while net income was up slightly from the year-ago period to $1.4m, or 46 cents per diluted share. The Coppell, Texas-based firm on Nov. 8 said net sales in its Asia/Pacific region were off 4.3% to $24.4m, in the Americas plummeted 25.8% to $14.1m and in Europe, Middle East and Africa slipped 2.8%, to $3.5m. It said the decreases in each region were primarily due to drops in in revenue per active independent associate and preferred customer: 4.7% in Asia/Pacific, 21% in Americas and 13.5% in EMEA.

PLT's élantria gets non-GMO verification

PLT Health Solutions Inc. received non-GMO verification, covering raw materials, manufacturing processes and logistics, from the Non-GMO Project for its élantria Algal DHA line of ingredients. The Morristown, N.J., firm on Nov. 9 said the Non-GMO Project identified its ingredient it the first commercially available algal DHA available in the US to the project has verified as non-GMO. Available since June 2016, PLT says élantria Algal DHA up to 4 times more stable than conventionally stabilized algal DHA, extending shelf-life and improving taste and odor.

Multi Gold whole food supplements

NutriGold Inc. unveiled its Multi Gold plant-based whole food multivitamins that are certified organic and Non-GMO Verified. The company on Nov. 7 said the "ethically formulated" vitamins are sourced from real fruits, berries, vegetables and herbs and encapsulated in easy-to-swallow, certified vegan capsules. The line includes Prenatal, men's and women's in three formulations for different age groups and vitamin B complex. The Orem, Utah, firm said the products are subject to more than 140 third-party tests to verify purity and potency and provide 100% or higher daily value of more than 12 essential nutrients.

From the editors of the Tan Sheet. Our dietary supplement industry coverage now is published in the Rose Sheet, with articles emailed to readers daily and available on this page of the website.