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NBJ Business Achievement Awards Continued...
HBP/NBJ Deals of the Year Awards for
2005
Nutrition Business Journal and Health Business Partners have cooperatively tracked
merger & acquisition activity in the nutrition industry since 1996, but
2005 is the first year in which we singled out deals for commendation. It was
indeed a busy year for M&A and financing activity. In a very competitive
Dietary Supplements category the gold medal goes to Summit
Partners for its investment in Airborne, marketers of the popular effervescent
cold and flu prevention supplement. Silver goes to Hong Kong based CK
Life Sciences for its $40-million acquisition of Sante
Naturelle a Canadian supplement brand with $44 million in sales, followed
by bronze for a new move into the sector by a mainstream healthcare investor,
Polaris Ventures,
which acquired multi-channel supplement company Botanical
Laboratories.
In Natural & Organic Foods, PepsiCo’s
acquisition of the $90-million Stacy’s
Pita Chip Company in the natural snacks category received top recognition
for a strategic move that is a solid statement about Pepsi improving the nutritional
profile of its portfolio. Runners up were Cadbury
Schweppes for purchasing the $40-million Green
& Black’s in a $40-million transaction that brought both category
validation and a large global player into the organic chocolate business. Also
credited in this category was frequent contender Hain
Celestial Group, this time for its $33-million acquisition of the $50-million
organic oils and supplements company Spectrum
Organic Products.
In the busy Natural Personal Care segment, a gold medal goes to Harvest
Partners and the management team at Natural Products Group LLC
(formerly Levlad and Arbonne). Through two 2005 recapitalizations they have
have already turned a $93-million investment in December 2004 into $200 million
returned to the investors. Silver goes to L’Oreal’s acquisition of
Skinceuticals,
a maker of antioxidant skin care products. Bronze is awarded for the $408-million
recapitalization of MD
Beauty Inc. (Bare Escentuals) in October by Berkshire
Partners and JH
Partners. It was MD Beauty’s third recapitalization in the last
two years, and both firms returned to their investors an additional approximately
145% of the equity capital invested in an earlier transaction, bringing the
total capital returned to approximately 245% of capital invested.
In the somewhat quieter supply chain segment, the gold medal goes to Cargill
for its synergistic $660-million acquisition of the Degussa
Food Ingredients business that included the bioactives unit. Silver goes to
French botanical supplier Naturex
for its $37-million purchase of the North American botanical supplier Pure
World, which had sales of around $30 million. The $2-billion distributor
United Natural Foods Inc.
earns bronze for buying $20-million Roots
and Fruits, which will operate under wholly owned subsidiary Albert’s
Organics Inc. Roots and Fruits is a Minnesota-based organic wholesale distributor
of fresh produce to approximately 500 customers in the upper Midwest region.
In the cross-cutting category of best roll-up, Atrium
Biotechnologies receives a gold medal for its $90-million acquisition
of HVL/Douglas Laboratories
in December 2005. This strongly reinforced Atrium’s bid to take a dominant
position in the practitioner sales channel for supplements (Atrium also owns
Pure Encapsulations). The Atrium deal only narrowly beat two very strong deals
led by private equity firm Charterhouse
Group, which bought the Amerifit
(Estroven) platform in April 2005, followed by the $45-million add-on
acquisition of $17-million manufacturer Polymedica
in October, starting the company’s transition from a supplements
foundation into the broader consumer healthcare segment. Also of note was Charterhouse’s
bread and bakery roll-up of Vermont
Bread, Adams Bakery and Rudi’s
Organic Bakery to create a leader in natural & organic baked goods.
Investment in Science & Research
Dietary Supplement
Education Alliance (DSEA) for commissioning its second study on health
cost savings from dietary supplementation. The
Lewin Group Inc. looked at omega-3 fatty acids and lutein with zeaxanthin,
reporting savings of $3.1 billion and $2.5 billion respectively over five years
(2006-2010) as a result of reduced hospitalizations, physicians’ visits,
and avoided transitions to dependency. A 2004 DSEA study examined five supplements–calcium
+D, folic acid, omega 3 fatty acids, glucosamine and saw palmetto. Estimated
savings from calcium supplementation were $13.9 billion over five years and
$1.3 billion from folic acid.
Sabinsa for research
on ForsLean, its patented extract of Coleus forskohlii root. A
study in the August 2005 Journal of Obesity Research entitled "Body
Composition and Hormonal Adaptations Associated with Forskolin Consumption in
Overweight and Obese Men" confirmed that ForsLean significantly
increased lean body mass and decreased body fat percentages. Results revealed
an 8.77 lb. total increase in lean body mass in the ForsLean receiving
group and a decrease in body fat by 9.96 lb. or 11.2% compared to the baseline.
Another study, "Effects of Coleus forskohlii extract supplementation
on body composition and markers of health in sedentary overweight females,"
was slated for publication in the Journal of the International Society of
Sports Nutrition.
Jarrow Formulas
for a double blind, placebo controlled, randomized clinical investigation of
Q-absorb, a highly bioavailable CoQ10 supplement. The Q-absorb
trial showed a 300% increase in plasma CoQ10 over baseline and produced interesting
results regarding the effect of combined exercise/supplementation on cardiovascular
health in patients suffering chronic heart failure. Other trials sponsored by
Jarrow in 2005 included an exploratory pre-clinical study looking at the effect
of various forms of selenium, including Methylselenocysteine, on an estrogen-negative
human breast cancer line. The study looked at an active cancer treatment model,
unlike the traditional prevention formats of other selenium studies. Study results
led to a second phase looking at hepatoma, neuroblastoma and colon carcinoma
cell lines. Jarrow said it is preparing its findings with a view to publication.
Capsugel for completing
expansion of its Licaps manufacturing facility and opening a Liquid Formulation
Center to support the development of new dietary supplement formulas. The expansion
and new state-of-the-art laboratories entailed an investment of more than $3
million. The formulation center will use pharma-based scientific development
protocols to formulate dietary supplements into liquid dosage form. The laboratory
is housed at SC Bio,
a biotech incubator in Greenwood, S.C. "We are committed to helping to
advance dietary supplements as a part of a credible, science-based industry,"
said Deborah L. Morrison, director of Liquids, America. Scientific protocols
have been transferred from the company’s formulation center in Colmar,
France.
Efforts on Behalf of the Industry
David Seckman, executive director and CEO of the National
Nutritional Foods Assn., for transforming NNFA into one of the most
relevant and effective groups in the nutrition industry during his five-plus
years of service. He also formed the Coalition to Preserve DSHEA and the Natural
Products Foundation. "Because of his political savvy, he has quietly rescued
the industry from countless amendments, which would have had results ranging
from problematic to disastrous," stated his nomination. "David Seckman
works nights and weekends, travels tirelessly, never seeks recognition or credit,
and juggles the jobs of five people–all the time with humor and grace."
AIBMR Life Sciences for
garnering high-level legislative visibility for the industry by founding the
American Preventive Medical Assn. and Citizens For Health–non-profit organizations
that were cited by lawmakers in connection with the success of DSHEA legislation.
AIBMR has also supported scientific integrity in the industry through its involvement
with numerous health organizations, including the National Institutes of Health
Office of Alternative Medicine Advisory Council (AMPAC); the Ad Hoc Developmental
Planning Committee of the NIH Office of Dietary Supplements (ODS); and the U.S.
Pharmacopoeia Convention (USP). AIBMR provides research and regulatory guidance
to the nutrition industry.
Personal Achievement
Sam Wright IV, CEO and president of The
Wright Group, for assisting in relief efforts after Hurricane Katrina.
In September he was awarded the Civilian Medal of Honor for Service and Duty
by General Russell Honore, the commanding officer overseeing recovery efforts
in New Orleans. In addition, despite massive logistical problems on the Gulf
Coast created by hurricanes Katrina and Rita, under Wright’s leadership
The Wright Group stayed focused on making its transition from a domestic supplier
of commodity oriented vitamin premixes into a global, value-added ingredient
supplier to the functional food, beverage and supplement industries.
Bonnie Minsky, MPH, LDN, CNS, for going the extra mile for her patients
and for her efforts in nutritional education. Minsky has authored two books,
"Nutrition In a Nutshell" and "Our Children’s Health: America’s
Kids in Nutritional Crisis and What We Can Do to Help." She co-authored
the bill that would license nutritionists in Illinois in 1990, the second of
its kind proposed in the United States. Bonnie was honored as the first Licensed
Nutrition Counselor in the state. Similar bills have now been passed in most
states. Bonnie has appeared on numerous radio and television programs and given
hundreds of lectures discussing natural menopause, anti-aging, weight loss and
other aspects of nutrition. She currently serves as President and Wellness Director
of Nutritional
Concepts where she privately counsels.
Environment & Sustainability
Choice Organic
Teas/Granum Inc. for dedication to minimizing its environmental footprint.
Achievements in 2005 included replacing the company car (averaging 25 miles
per gallon) with a model that runs on 100% biodiesel (42 miles per gallon).
It also purchased sustainable furniture made with material derived from sunflower
husks, and replaced its remaining conventional toilets with low-flow models.
Choice Organic Teas recycles an estimated 71% of its total administrative and
production waste. This year it won a BEST (Businesses for an Environmentally
Sustainable Tomorrow) award for Waste Prevention & Recycling from Resource
Venture, a partner of the City of Seattle’s Public Utilities and the Greater
Seattle Chamber of Commerce.
ForesTrade,
an organic supplier of sustainably grown organic tropical spices, vanilla beans,
essential oils and Fair Trade coffee, for organizing the wild harvest of certified
organic ramon nuts in the Maya Biosphere Reserve in Guatemala. Ramon nuts were
a staple food of the ancient Maya civilization and are high in protein, including
essential amino acids in addition to vitamins and minerals. The harvest helps
preserve the 120-ft tall ramon tree, an essential part of the rainforest canopy.
ForesTrade has introduced ramon nuts to several U.S. natural food manufacturers,
including Traditional Medicinals, Teeccino Caffé, and Guayaki. ForesTrade
is seeking GRAS status for ramon nuts.
Organic India,
for leadership in the global movement to promote organic farming and improve
the economic and social outlook for small family farmers and their communities.
Organic India’s "Market Driven Conservation" business model goes
beyond basic Fair Trade practices. Family farmers and herb wildcrafters receive
financial support, education and agricultural training and are paid up to four
times the market value for their crops. Part of the company’s mission is
to introduce organic products to North America, like its herbal Original
Tulsi Tea Collection. In recognition of its ethical practices, Organic India
was honored with the 2005 Socially Responsible Business Award at the Natural
Products Expo East.
Social Responsibility
Vitamin Angel Alliance
for organizing vitamin shipments in what turned out to be a very busy Fall 2005.
In October Vitamin Angel organized children’s and adult multivitamin shipments
to help the Pakistan Earthquake Relief effort. Also by October, the alliance
had collected over 18 million vitamin supplements to supply the nutritional
component of Katrina Relief. In the same month Vitamin Angel responded to massive
flooding in Guatemala, and in September began shipping supplements to Niger
to help children affected by famine. Vitamin Angel Alliance is a non-profit,
non-sectarian organization dedicated to providing basic nutrition and fighting
vitamin A deficiency childhood blindness around the world since 1994.
Organics Unlimited,
a San Diego based distributor of organic tropical fruits from Mexico and South
America, for setting up The
GROW Foundation (Giving Resources and Opportunities to Workers), an
international outreach initiative with a mission of ensuring that field workers
who grow organic produce sold through the company receive fair wages and better
living standards. Started with funding from Organics Unlimited and its owners,
the program will be sustained through a small per-box surcharge on product marked
with the GROW label. Through a partnership with The International Community
Foundation monies go to programs where Organics Unlimited works with the growers
and buys its organic tropical fruits.
Customer Service and Education
Pharmavite,
the manufacturer of Nature Made, Nature’s Resource and OLAY Vitamins,
for updating its online site, NatureMade.com, thereby yielding sharper
insights into consumer and marketing trends. This category management tool allows
Pharmavite to gather immediate consumer feedback on product development efforts,
health trends and retailer activities–business intelligence used to support
retailer programs. The survey database can be analyzed by age, gender, geographic
region and retail stores, identifying prospective targets for a new product.
(A recent online survey showed consumers 55 years and older account for approximately
53% of VMS sales.) Pharmavite’s category management insights help to enhance
retailer support and contribute to increased sales, the company said. For example,
in 2005 while category sales declined by 1.2%, Pharmavite brand sales saw a
slight increase of 0.4%.
Great Earth Companies
(GEC) for developing a training and education program to teach retailers
about dietary supplement science and Great Earth products. The program
is designed to help retailers understand how to use dietary supplements appropriately,
the type of customers who might benefit from them, and the legal framework for
presenting products to consumers. The program is delivered primarily via distance
learning and has been approved by the International Assn. for Continuing Education
and Training in Washington D.C., so GEC can award Continuing Education Units
to those who successfully complete the program. Graduates receive a diploma
as a Certified Dietary Supplement Specialist (CDSS) and may also pursue advanced
and master level CDSS diplomas by pursing additional study offered by GEC.
Pom Wonderful
for blazing a new market based on the intrinsic healthiness of pomegranate and
for inspiring research into the newly popular fruit. The first randomized, double-blind,
placebo-controlled trial showing that pomegranate juice may affect the progress
of coronary heart disease was published in September 2005 in the American
Journal of Cardiology. The non-profit Preventive Medicine Research at U.C.
San Francisco and the California Pacific Medical Center used Pom juice
in the study. Sales are running north of $60 million for the Pom brand
of pomegranate juice, according to published market research.
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