Schiff Q2 results show units moving but profits flatter
SALT LAKE CITY Heavy national brand promotion may be moving units of joint care supplement products off of shelves, but dollar sales growth is harder to come by, commented Bruce Wood, president and chief executive officer, Schiff Nutritional, during a conference call concerning that company’s second-quarter results last week.
“For perspective, in the food, drug, mass market arena, as measured by IRI, this data excludes Wal-Mart and club stores, the joint care category was up almost 9 percent in unit volume but only 2 percent in retail dollars for the 12 week period ended Nov. 18,” Wood noted. “At the same time, private label joint care declined in the mid-single digits in both dollars and unit volume as its still-dominant share was eroded by heavy branded promotion activity.”
To help combat that heavy branded promotion, Wood announced that Schiff will begin shipping Move Free Advanced products featuring smaller tablet sizes beginning next month. “We are introducing our same proprietary … advanced formula in tablets that are now 26 percent and 14 percent smaller, respectively, on our two leading SKUs,” he said, citing consumer research, especially among baby boomers, for the small-tablet impetus. “We believe this internally-developed innovation will yield improved consumer acceptance now that we have the smallest joint care tablets on the market.”
Schiff will also be extending its Move Free Advanced line with a third SKU formulated with MSM and vitamin D. “These two additional ingredients, which have proven clinical benefits in joint care, will drive new consumers to try the Move Free brand,” Wood said. In addition, Schiff is test marketing a new omega-3 supplement at Costco called Schiff MegaRed Krill Oil. “Schiff MegaRed Krill Oil is priced at a significant premium to ordinary fish oil which is why we are market testing this product with one major customer,” Wood said. Although Wood did not identify the retailer, an online search for the product netted Costco.com, where three-months worth of 300 mg tablets of krill oil was selling for $18.99. The test market, Wood said, is expected to guage “consumer acceptance of the price premium in this virtually unbranded category.”
Schiff Nutrition’s net sales for the second quarter endedNov. 30 were $39.5 million, compared to $38.8 million for the same period in fiscal 2007.
Reckitt Benckiser makes $2.3 billion offer for Adams
CHESTER, N.J. Reckitt Benckiser Group on Friday commenced its previously announced cash tender offer for all of the outstanding shares of Adams Respiratory Therapeutics in a deal that would be worth $2.3 billion, first announced Dec. 10.
The deal will expire if not approved by Adams’ shareholders by Jan. 23.
The offer is being made through Twickenham, a wholly-owned subsidiary of Reckitt Benckiser. Adams’ board has unanimously determined that the offer is fair to and in the best interests of Adams’ stockholders and recommended that holders of Adams common stock accept the offer and tender their shares in the offer.
NAD finds in favor of Relaxane’s ad claims
NEW YORK The National Advertising Division of the Council of Better Business Bureaus has determined that advertising claims for Relaxane, a dietary supplement advertised by Indegene Pharmaceuticals to relieve the symptoms of stress, are supported by the evidence provided by the advertiser.
NAD examined labeling claims and Internet claims that included:
- “For the first time—a clinically tested non-addictive product that relieves the symptoms of everyday stress.”
- “Relaxane is effective in managing everyday stress, it alleviates multiple symptoms of everyday stress—frustration, irritability, restlessness, stress-related gastrointestinal discomforts (fullness, bloating, cramps) and stress-related minor muscle pain.”
- “Relaxane is designed to provide stress relief and address multiple symptoms of stress.”
- “Relaxane is an innovative stress reducer, clinically tested, optimized plant-derived Natural molecular composition of valeriana officinalis, melissa officinalis, passiflora incarnata and petasites hybridus that work on the multiple symptoms of stress.”
The advertiser presented as evidence three studies performed on the product.
Following its review of the evidence, NAD was satisfied that the challenged advertising clearly conveys that Relaxane is for, and has been tested for, relief and alleviation of the symptoms associated with stress. NAD determined as well that the advertiser provided a reasonable basis for a claim that Relaxane, when taken as directed, is non-addictive.
Indigene Pharmaceuticals, in its advertiser’s statement, said the company is pleased that NAD has found that claims for Relaxane are substantiated. “In particular,” the company stated, “Indigene Pharmaceuticals, is pleased that NAD has found that clinical testing on a Relaxane product itself is the gold standard for supporting advertising claims.”
NAD, the advertising industry’s self-regulatory forum, has expanded its review of dietary-supplement advertising, pursuant to a series of grants made by the Council for Responsible Nutrition.