Nutrition 21 results flat but places store by retail in 2007
year 2006 and increased losses, but believes it is on the cusp of
great things for the coming year as it fully implements its shift
from ingredients to finished products and chases new sales
channels.
The New York-based company chromium picolinate specialist was, until this year, focused on R&D and building science to support Chromax's use in supplements.
But it has recently opted for a change in direction and is investing heavily in promoting Chromax - with the ambitious aim of making it as closely associated with managing insulin levels as calcium is with bone health.In the US alone calcium supplements are worth $1bn at retail.
But according to president and CEO Paul Intlekofer "tremendous strides" have been taken towards reshaping the business model, laying the foundations to become a "formidable consumer health products company".
For the year ended June 30 Nutrition 21 reported net sales of $10.7m - the same figure as in 2005. Its net loss was $10.3m, compared to $7m last year.
Despite its retail ambitions, even in Q4 90 per cent of the $2.5m sales (up from $1.9m) came from ingredient sales.
But the big news for retail came at the very end of the year, with Chromax was on shelves at Wal-mart, Rite Aid, Albertsons, CVS/pharmacy, Kroger and Harmon by the end of June. Because of this timing, sales are likely to start making more of an impact from Q1 2007.
Retail distribution has since been expanded to Walgreens, Duane Reade and USA Drug at the end of August - and the full advertising and public relations campaign, aimed primarily at the lucrative baby boomer market - only gets underway this month.
Nutrition 21 has also putting structures in place to open up new avenues for its products. It recently acquired finished omega-3 supplement supplier Iceland Health, and plans to leverage that company's direct response expertise for its chromium supplements - as well as to take Iceland's range into retail.
Company CEO and president Paul Intlekofer also announced as part of the results communication that he is taking chromium picolinate into private label.
"To more fully leverage our patents covering all the known uses for supplementing with chromium picolinate, we are preparing to manufacture and distribute finished private label chromium picolinate for major food, drug and mass retailers," he said, adding that the first products should ship by the end of September.
Nutrition 21 also has grand ambitions for its Diachrome supplement, combining Chromium with biotin for diabetes management. Already on shelf at CVS/pharmacy, Walgreens and Duane Reade should follow by the end of October.
Marketing efforts are expected to receive a boost when a recent clinical study using Diachrome amongst 447 subjects is published in a journal this winter.
"We believe Diachrome will become an essential tool for healthcare professionals dealing with the growing epidemic for type 2 diabetes," said Intelkofer.
