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Regulatory concerns dominate NBJ Summit State of the Industry session

2010 will not be remembered as a year of champagne toasts for the natural products industry, said Patrick Rea, publisher and editorial director of Nutrition Business Journal and co-chair of the NBJ Summit, in his State of the Industry panel presention on July 20. The 14th Annual NBJ Summit, a four-day executive-level conference in Dana Point., Calif., concludes tomorrow.

Sales grew 6 percent for the nutrition industry in 2010, to the tune of $117 billion. "To date, 2011 appears to be trending about the same as 2010," Rea said. "At this point we don't see any big positive or negative bursts."

Patrick Rea at the NBJ SummitBut numbers weren't the only thing on Rea's mind—he was thinking about the current political and regulatory climate, and he wasn't alone. Each panelist mentioned the importance to the industry's future of such regulatory issues as New Dietary Ingredients and Good Manufacturing Practices.

Rea urged the audience of nutrition executives to get involved. "Next year, I want to see each attendee here be a member of an industry association—they do a tremendous amount of work for our industry and its more important now to support them than ever before."

The view of the nutritional category from Wall Street is quite good, according to session panelist Scott Van Winkle, CFA, managing director, Canaccord Adams. "The industry has grown up, and the healthy living index is outperforming any other industry and is up 12 percent," he said.

Investors are interested in non-discretionary spending, and that's what the natural products industry is serving up. "Even in a down economy consumers will keep taking their vitamins and eating healthy foods—that's non-discretionary spending."

In regard to the regulatory issues, Van Winkle points to the history of the stock market as a predictor of economic downturns. "Currently, the stock market is not predicting any downturn from a supplement regulatory issue," he said.

Steven Mister, president and chief executive officer, Council for Responsible Nutrition, began his presentation by reminding the audience that the NDI legislation is a guidance document. "It's not like when the GMPs came out, and it was the law of the land. There will be opportunities to challenge it and poke holes in it," he said. That said, he reiterated that CRN does not think that the legislation is good for the industry for many reasons, including the fact that it ignores the burden of proof allocation for safety between FDA and industry as set forth by the Dietary Supplement Health and Education Act (DSHEA).

Session moderator Tom Aarts, co-founder of NBJ and principal, Nutrition Capital Network, addressed industry conflicts and challenges as discussed at Tuesday's third annual NBJ Summit CEO dinner:

  • GMPs: With a 75 percent failure rate, the industry needs to address this issue immediately, Aarts said.
  • Dietary Supplement Labeling Act: This is not an immediate threat, but something the industry needs to pay attention to, according to Aarts.
  • NDIs: The industry needs to "sing from the same songbook when comments are presented," and to move the emphasis of the legislation from products to ingredients, he said.
  • Senator Hatch: Hatch has been a strong friend of the industry since 1990, and he might not get reelected next year. The industry must support his reelection, according to Aarts.


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