Chromax enters retail marketplace
make its first appearance on retail shelves, following the receipt
of a purchase order from Rite Aid.
The Rite Aid chain is made up of more than 3,400 stores throughout the US, all of which will stock the product. Nutrition 21 has signaled that it is aiming to receive purchase orders from other major food, drug and mass retailers.
In August the FDA approved a qualified health claim for chromium picolinate on the grounds of one study that indicates it may reduce the risk of insulin resistance and type-2 diabetes. Although the precise wording was weighted towards the negative ("the existence of a relationship…is highly uncertain"), it was well received by then president and CEO Gail Montgomery, who said it was an "important milestone in [the company's] effort to communicate the health benefits of [its] products".
COO Paul Intlekofer equated chromium picolinate's end-benefit destination on the shelf to calcium for bone health, and highlighted the media attention that has been paid to its insulin-related benefits recently. For example, Newsweek magazine listed it as one of its five 'Super Nutrients'.
It has also been heavily involved in a program of clinical trials to investigate the safety and efficacy of Chromax and Diachrome, a patented combination of chromium picolinate and biotin). Until now, the company's business model has been based on wholesale distribution.
Intlekofer said that the order from Rite Aid is a significant step in the transition to also being a supplier of branded finished goods.
"We think that our shift in business model should positively impact the company's financial results by the second half of 2006," he said.
For the fiscal year ended June 30 2005, Nutrition 21 reported total revenues of $10.7 million, compared to $10.2 million the previous year, but net loss increased from $5.9 million or $0.16 per diluted share to $0.19 per diluted share.
At the time, Montgomery cited Nutrition Business Journal's report that chromium supplements saw double-digit growth at retail in 2004, for the third year running.
