Supplement sales help Clorox tread water, but probiotics still lag behind

08-Aug-2019 - Last updated on 08-Aug-2019 at 16:15 GMT

Getty Images

The Clorox Company is yet another CPG giant that has found a salve for sore earnings in the nutritional products sector. Recent investments in the dietary supplment category provided bright spots in an otherwise flaccid year end report.

Investments paying off

The CPG giant acquired dietary supplement manufacturer Nutranext for a bit more than $700 million in 2018. The division’s contribution to full year earnings has proven to be a bright spot for the company, as it struggles in some of its main categories like charcoal and plastic bags (Clorox owns the Glad line of plastic bags and wraps).

“I continue to be pleased with the Nutranext acquisition, which delivered robust growth in the fourth quarter and contributed strongly to total company fiscal year sales behind an integration that remains on track,” said CEO Benno Dorer in an earlings call with analysts. The call was posted in transcript form on the site seekingalpha.com.

Lisah Burhan, director of investor relations, gave some more detail on just how important dietary supplement and personal care sales have become to the company.

“In our Lifestyle segment, sales for the quarter were flat, while sales for the full year were up 17%, primarily reflecting the benefit of Nutranext acquisition. Burt's Bees had a very strong quarter of sales growth behind a record quarterly shipment in lip care and face care and sales were up for the full year as well,” she said.

Problems with probiotics

But the news from another supplement category—probiotics—was not so rosy. Clorox acquired probiotic brand ReNew Life for $290 million in 2016. At the time of the acquisition the company said ReNew Life had generated sales of $115 million in 2015.

The brand has not prospered under Clorox ownership. Reflecting perhaps a soft spot in the sales of probiotics or a commoditization of the category globally, sales were down significantly year over year.

“Sales were down by double-digits for Q4 and for the year. As we mentioned last quarter, we remain focused on restoring growth in this business and have confidence in the probiotic category and in our ability to differentiate our brand from competition by emphasizing our product efficacy,” Burhan said.

Clorox’s overall 2019 revenue was $6.2 billion, up 1.4% from the year previously, but sales were down in the fourth quarter. Nutranext sales and the divestiture of another division contributed strongly to keeping the weak fourth quarter from hurting overall results more than it did, the company said.