Two Up, One Down in a 2009 Supplement Firm Earnings Roundup

Increased distribution and steadily improving consumer demand helped two supplement firms grow their bottom lines during the latter half of 2009, while a direct-selling specialist saw its sales be eaten away by shrinking order sizes. 


Atrium Innovations, a Canada-based firm and owner of multiple global dietary supplement subsidiaries, increased its total 2009 revenues 17.1% to $319.7 million. The $46.8 million increase over 2008 was due primarily to Atrium’s 2009 acquisitions of Nutri-Health Supplements and natural & specialty retail-focused Garden of Life. The company’s ongoing organic growth coupled with the successful performance of its acquired companies has positioned Atrium well for future expansion. “We have the financial flexibility to pursue our acquisition program,” said Chief Financial Officer Marion Paradis. “This program has established Atrium’s industry leadership on two continents, and further acquisitions promise to strengthen and extend the position of our brands in the marketplace.”

Blackmores Ltd., the leading supplement company in Australia, reported $108.8 million in sales on growth of 14% for the last six months of 2009. The 14% growth is approximately double that of the Australian supplement industry, according to CEO Christine Holgate. The company is expanding its presence in “traditional sales channels” and reported a 250 point increase in distribution for the period. Holgate is cautiously optimistic regarding company growth in the coming months when consumer spending is expected to dip in Australia due to rising interest rates.

Direct-selling supplement specialist Reliv International Inc., reported a 6.5% sales decline during the fourth quarter of 2009 and a 12.1% loss for the full year in its February 25 earnings release. “The recession continued to negatively affect our distributors and customers in the fourth quarter, but the impact wasn't as dramatic as in the first three quarters of the year,” said Robert L. Montgomery, Reliv International’s chairman, President and CEO. The company finished the year with $85.4 million in sales, which is down from $98.2 million in 2008. Still, Montgomery is optimistic that the company’s increased distributor base—Reliv had approximately 67,940 distributors as of December 31, 2009, up an estimated 1% from December 31, 2008—will offset a Q4 decline in average consumer order size.

NBJ Bottom Line 

Top-selling supplement firms, including NBTY in the U.S. market and Blackmores in the Australia market, outpaced respective 2009 industry growth and much of the competition by using their abilities to leverage supply and distribution partners, which ensures the best prices and healthy profit margins. Essentially, the companies use size to their advantage. Atrium expanded its reach across the industry in 2009, and judging by the quote above from CFO Marion Paradis, it will continue to roll-up more companies in 2010 as the company leverages its assets and capitalizes on an expanding supplement market. Network-marketing companies such as Reliv International have been forced by the recession to expand their distributor pools in an attempt to offset smaller consumer orders. Still, the companies are hampered by a weakened U.S. dollar and an increasingly price-competitive market.

Related NBJ links:
M&A Activity Helps Drive Industry Growth in 2009; More Expected in 2010
Global Nutrition Sales Expand 8% in 2008 Despite Economic Storm
Atrium Solidifies Standing in Natural and Specialty Retail with Garden of Life Acquisition

Related NPI Center links:
Atrium Innovations Announces Fourth Quarter and Annual Financial Results of 2009

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