Editorial: The Week In Review - High's And Low's

By Len Monheit
[email protected]

This Week in Review

From a quick glance at industry related headlines, and from the communication we’ve received both on-line and offline, it’s apparent that by the time fall tradeshows such as Expo East and SupplySide West arrive, priorities will change from the current survival-first mode, to a more strategic re-evaluation of emerging opportunities. We see evidence of this in many areas, as first movers (particularly those with larger resources) continue their educational efforts along the entire industry value chain, but also as surprisingly strong numbers are reported by many companies in the sector.

One would expect upcoming events such as IFT (Institute of Food Technologists), the Newport Summit and even NNFA Marketplace 2003 to be bell weathers of industry confidence and opportunity and successful events will do much to restore shaken faith in both the industry and the economy. A buzz and vibrancy here, (and we’re seeing some preliminary signs), can in fact become a self-fulfilling prophecy that bodes well for the upcoming year. And I’ve personally spoken with many people who have avoided Marketplace in recent years, but have decided that now is the time to participate again. These actions can and will help.

Speaking about NNFA’s Marketplace event from June 27-29, one of the sessions particularly promises to be invaluable - the DSEA seminar and PR panel discussion on handling negative publicity.

Two dominant themes emerged in industry news over the past week, unless of course you also count the long-speculated sale of GNC which now appears imminent.

Solae, the company formed earlier in 2003 through an alliance between Bunge Limited and Dupont, issued several releases and announcements, including appointing a new President & CEO, (Tony Arnold) a patent infringement suit against ADM and Amerifit, and the introduction of new concentrated soy isoflavones for supplement products. The company claims the introduction marks increased participation in the industry – a very positive sign.

Not surprisingly, media coverage continues to be bleak and still dominated by the fallout of ephedra related issues. While we, as an industry, may be becoming tired of this coverage (especially the companies no longer in this business, or even those who have never participated), the effect of current coverage and court activity will have an impact. This impact will be manifest in insurance, consumer perception, government enforcement activity, as well as in the science behind claims and testimonials.

So to summarize recent developments:
With last Friday’s San Diego ruling against Cytodyne Technologies and penalty of $12.5 million in restitution, a new chapter began in the ephedra debate. Cytodyne is appealing the decision, specifically the scientific basis of its claims and advertising, but the decision and other recent events, has triggered new activity including the family of Baltimore Orioles pitcher Belcher initiating a suit, Westchester County in New York, which had earlier prohibited the sale of ephedra to minors, voted to abolish the sale of ephedra containing products entirely. And in Illinois, where the state banned ephedra last week, lawsuits are pending and calls are accumulating for a nationwide ban, as well as a recall and compensation program.

That concludes our recap of the highlights. There’s a lot more we could comment on, and will in future issues. If you have a comment or observation you want to add, send it to us.

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