Icy Hot maker Chattem feels the economic slump
CHATTANOOGA, Tenn. The economy is taking its toll on consumer-packaged goods manufacturers, as inventory cut-backs and retail and increased promotional spending prove to be a drag on earnings.
“While total revenues in the first quarter were lower than expected, we remain confident about the strength of our brands and our prospects for the balance of fiscal 2009,” stated Zan Guerry, Chattem chairman and CEO, in announcing the company’s first quarter results for the period ended Feb. 28. “Retail sales of our existing brands as measured by A.C. Nielsen and mass merchandiser point-of-sale data, excluding the discontinued Icy Hot Heat Therapy and Icy Hot Pro Therapy, increased by approximately 5% and 6% for the four and thirteen weeks ending March 21, 2009, respectively.”
Chattem reported that total revenues for the first quarter of fiscal 2009 were $116.1 million, representing a 3.9% decrease. The decrease in total revenues was due primarily to a $4.3 million reduction in international revenues, the company reported, but the balance of the decrease was related to lower sales of Icy Hot, Selsun, Bullfrog and Dexatrim, “caused in part by the timing of shipments, reduced retail inventory levels and two fewer shipping days in the first quarter of fiscal 2009,” the company stated.
The recall last year of the air-activated, self-heating Icy Hot Heat Therapy patch product was also a factor, Chattem noted.
Also adversely impacting Chattem total revenues was an increase in promotional programs that are recorded as a reduction of revenue rather than as advertising and promotion expense, the company added.
Advertising and promotion expense in the first quarter of fiscal 2009 decreased by $5.9 million to $28.6 million, or 24.6% as a percentage of total revenues as compared with 28.6% of total revenues in the prior year quarter. A&P expense was lower for the first quarter of fiscal 2009 due in part to an increase in promotion programs utilized by retailers that were recorded as a reduction of revenue rather than A&P expense and price efficiencies realized on certain media purchases.
Study finds specific probiotic strain safe for human consumption
CLEVELAND The results of a safety study to be published in the May issue of Food and Chemical Toxicology demonstrated that the probiotic strain bacillus coagulans GBI-30, 6086 is safe for human consumption, even in massive amounts.
Many experts recognize the health benefits of probiotics, but some have stressed that probiotic strains must first demonstrate safety before recommendations can be made about their widespread use.
“Some probiotics manufacturers want things both ways, suggesting, for example, that clinical studies done on their particular strains apply only to their probiotics, but then staking claim to safety studies conducted on different strains,” stated Andrew Lefkowitz, president and CEO of Ganeden Biotech, which sponsored the study. “It is our belief that both the benefits and the safety of probiotics are specific to individual strains and should be demonstrated by studies.”
Probiotics, also referred to as friendly bacteria, are becoming increasingly popular with consumers for several health benefits. However, safety studies do not exist for many strains of probiotics. Most food manufacturers require some evidence of safety for any ingredient they put into their products, but few probiotic manufacturers are able to cite safety testing on their particular probiotic strains and instead refer to the safe history of use of probiotic strains in general.
“While Bacillus coagulans has always intrigued me as a probiotic strain due to its ability to survive commercial conditions and gastric acidity, I didn’t know much about its safety and efficacy because there was little published data to review,” stated Gary Huffnagle, author of The Probiotics Revolution. “Now that the studies are being published, it will be much easier to recommend it to consumers and to food manufacturers looking to enhance their foods with probiotics.”
Study reveals babies born to smokers have increased risk of SIDS
VICTORIA, Australia Monash University researchers have found that babies born to a mother who smokes are more likely to be slower to wake or respond to stimulation – and this may explain their increased risk of Sudden Infant Death Syndrome, researchers reported last week.
Scientific director of the Ritchie Centre for Baby Health Research Rosemary Horne and researcher Heidi Richardson compared babies of mothers who smoked both during the pregnancy and after the baby was born, with babies who lived in a smoke-free environment.
Horne said the study suggested that maternal smoking can impair a baby’s ability to respond to external stimuli, which may explain their increased risk of SIDS.
“Those babies whose mothers smoked did not have as many arousals overall and the progression of the arousal response through the brain was also impaired,” Horne said. “Mothers who smoked while pregnant and continued to smoke afterward significantly increased their baby’s chances of succumbing to SIDS.”
The study involved 12 healthy, full-term infants born to mothers who smoked an average of 15 cigarettes per day. Their arousal responses during daytime sleep were monitored and compared with that of healthy infants who were born to non-smoking mothers.