Weekly News Update

October 11, 2001

Groupe DANONE Acquires 40 percent of Stonyfield Farm

In a deal that was nearly two years in the making, Stonyfield Farm, located in Londonderry, N.H., has announced that Groupe DANONE (DA), of Paris, France, will be acquiring a 40 percent holding in the company. Stonyfield, a privately held firm, is the largest organic yogurt producer in the U.S. and for 18 years has been committed to the ""triple bottom line"" of profits, social justice and environmental responsibility. The company has averaged compound annual growth of 24 percent over the last 10 years and is the No. 1 yogurt nationally with a turnover of approximately $85 million. According to the Chicago Tribune DA purchased its share in Stonyfield for $50 million. DA will have the option to purchase up to 75 percent of the company in 2004.

Stonyfield President and CEO Gary Hirshberg said in a statement, ""I am especially pleased with DANONE's commitment to our ambitious organic, environmental and social mission. The Stonyfield/DANONE partnership is an excellent model for enabling emerging values-driven firms to gain in strength and stature while remaining loyal to the growing base of consumers who support organic and natural products."" Hirshberg will continue to run the company as CEO. The deal is subject to U.S. antitrust authorities' approval.

EXPO East Update

Despite recent setbacks because of the Sept. 11 terrorist attacks, New Hope Natural Media--which has chosen to go ahead with this week's Natural Products Expo East 2001 conference and trade show in Washington D.C.--announced that of a sampling of 480 of its 4582 registered retail attendees, 91 percent of the respondents confirmed they were still going to attend and an additional 72 registrations were received on October 8.

The company noted that 11 percent of exhibitors have either cancelled or downsized their space for the tradeshow, creating a need for an adjusted floor plan, which will be made available onsite. Companies such as Whole Foods Market Inc., Wild Oats Markets, Kroger, Tree of Life and United Natural Foods have all confirmed large numbers of people from their companies will be in attendance.

In memoriam of those who died in the terrorist attacks, a candlelight procession will be held on Thursday, Oct. 11, at 6:45 p.m., beginning on the steps of the National Museum for Women in the Arts, followed by an industry memorial gathering at the Renaissance Hotel.

House Passes Farm Bill Without Conservation Measures

The U.S. House of Representatives has passed the $73 billion Farm Security Act of 2001, which sets policy for the agriculture industry for the next 10 years. Grain, cotton and soybean growers were guaranteed $49 billion in subsidies, but the environmental component that many sustainable farmers were fighting for was not included. The bill now goes on to the Senate, where Agriculture Committee Chairman Tom Harkin, D-Iowa, is said to support ""green"" payments of up to $50,000 per year to farmers who are making conservation efforts part of daily life on the farm. Harkin could release his version of the bill as early as this week.

FDA Reopens Health Claim Comment Period

The Food and Drug Administration (FDA) has reopened for 45 days the comment period for the interim final rule authorizing a health claim on the association between plant sterol/stanol esters and reduced risk of coronary heart disease (CHD). For more information on how to submit comments visit http://www.accessdata.fda.gov/scripts/oc/ohrms/index.cfm.

Report Finds FDA Resources Inadequate

The White House Commission on Complementary and Alternative Medicine (WHCCAM) has issued its interim progress report on the Dietary Supplement Health and Education Act (DSHEA), noting that FDA's resources have not been commensurate with its responsibility to ensure product safety for food and dietary supplements. WHCCAM's final report, which will make legislative and administrative recommendations on how public policy can take advantage of complementary and alternative medicines, is due by March 7, 2002.

The Body Shop Talking to Potential Buyers

Following a sharp decline in product sales for the first half of FY01 attributed in part to the events of Sept. 11, the Body Shop International (BDSPY) has entered into preliminary discussions with potential buyers that may include private equity house Schroder Ventures, amongst others, according to U.K.-based newspaper The Evening Standard.

Hemp Products Manufacturers Facing Zero-THC Regulations

The Drug Enforcement Administration has published new rules and regulations on the Federal Register that ban hemp food products containing any THC. The rules also require hemp bodycare companies to file for exemptions with DEA to secure hemp oil imports. The Vote Hemp legal committee and the Hemp Industries Association are in the process of filing a temporary restraining order to stop the regulations from taking effect. To view the document, visit www.nara.gov/fedreg/ or www.votehemp.com/action.html

Stocks & Financial News:

Reliv International (RELV) has approved a stock-repurchasing program by which the company has the option to repurchase up to 500,000 shares of its common stock over time.

Natural Health Trends Inc. (NHTC) has announced that its newly launched subsidiary, New Zealand-based Lexxus Southwest Pacific, has reported revenues of over $1 million in its first two months of operation.

HealthCentral (HCEN), a healthcare e-commerce company, and its wholly-owned subsidiaries HealthCentralRx.com Inc., HealthCentral Enterprise Web Services Inc., WebRx.com Inc., HCEN Acquisition Corp., HealthCentral.ca, Vitamins.com Inc., Vitamins.com LLC, L&H Vitamins Inc. and J&M Direct Corp. has announced it has filed voluntary petitions for protection under Chapter 11 of the U.S. Bankruptcy Code.

Weider Nutrition International Inc. (WNI) posted a 1Q02 net loss of $352,000 or $.01/diluted share vs. net income of $1.97 million or $.07/diluted share for the same period a year ago.

Briefs:

Hauser Inc. (HAUS) has announced an exclusive supply agreement with Pharmanex, a division of Nu Skin Enterprises (NUS). Hauser will be supplying its cardiovascular product, Policor, to Pharmanex in exchange for use of Cholestin, Pharmanex's cholesterol-maintenance supplement.

Bon Coeur Inc. (BOCU) has allied with Natural Alternatives International Inc. (NAI) to produce nutritionally enhanced products using (BOCU) technology and (NAI)'s formulating and manufacturing capabilities.

General counsel for San Diego-based dietary supplements manufacturer Metabolife International, Gary Pay, who is also a former NFL player, has written a letter to NFL Commissioner Paul Tagliabue, explaining that while he respects the NFL's decision to ban the use of ephedra as a performance enhancing supplement, he wants the NFL to acknowledge that the product is completely safe when taken appropriately for purposes such as weight loss. Tagliabue has not yet replied.

Nutrition 21 (NXX) has reported that it has settled its patent infringement case with Piscataway, N.J.-based Sabinsa Corp. for an undisclosed amount.

Provo, Utah-based Nature's Sunshine Products Inc. has sued Nature's Treasure Products Inc. of Coral Gables, Fla., for adopting a logo similar to that of Nature's Sunshine. The company is seeking damages and a court order for the destruction of all Nature's Treasure packages, signs, promotional materials, and other such supplies.

Los Angeles-based Sunset Health Products has announced it has filed a lawsuit against Celebrity Products Direct Inc., Spectrum Worldwide Inc. and their President Lisa Tremain seeking a permanent injunction to prevent the manufacture, marketing and sale of a product line called Original Hollywood Celebrity Diet, which the company says looks exactly like Sunset Health's Hollywood 48-hour Miracle Diet.

Galaxy Nutritional Foods (GLXY) has reported substantial progress in its test with 43 Fort Wayne, Ind.-based Pizza Hut stores. GXY is testing the market for its veggie mozzarella, and says that 64 percent of those who have tried the product have made a repeat purchase. Additionally, the company has hired Christopher J. New to serve as chief marketing officer and VP of strategy.

A coal-derived drug from South America is being tested as a potential treatment for AIDS. The drug, marketed as a dietary supplement in South America, is called Oxihumate and is known for boosting the immune system.

Uncle Matt's Organics of Clermont, Fla., has begun distributing its Uncle Matt's organic juices to 650 Publix supermarkets in several southern states.

Health Canada is informing consumers that the recently released product, Becel Pro-activ, a fat spread made with plant sterols, may not be in compliance with the Canadian Food and Drugs Act and Regulations and may be unsafe for consumption. Made by Unilever Canada Limited, the product is intended for reducing blood cholesterol levels. Health Canada will keep consumers informed on the status of the product.

NSF International has certified the first five-supplementation products through the NSF Dietary Supplements Certification Program. Manufactured by Nutrilite, a division of Access Business Group International, the products are Parselenium- E, Bio-C Plus, Nutrilite Kids Natural Chewable C, Nutrilite Kids Chewable Iron, and Valerian and Hops. The products will now bear NSF certification stamps on their labels and will be listed on the NSF website as certified products.

Cyanotech Corp. (CYAN) has launched a national television marketing campaign for BioAstin, an all-natural antioxidant based on astaxanthin. The campaign will feature a 30-minute infomercial that will begin airing in early 2002.

Executives from the U.K.-based grocery store chain, Sainsbury's, hope to convert 10 percent of the overall banana production in the Windward Islands to organic. They have just returned from St Lucia, where they evaluated the progression of an organic banana production effort that the company is backing. Though the Caribbean News Agency reports that organic banana production in the Windward Islands (which includes St. Lucia) dropped from 277,441 tons in 1990 to 140,449 tons in 2000, the company expects to receive 2,500 boxes of organic bananas per week in the U.K.

According to a study published in the August issue of Cancer, Epidemiology, Biomarkeres and Prevention, lycopene has been found to slow the progression of cancerous growths in prostate cancer patients.

Sarasota, Fla.-based Living Naturally, a web based CRM software provider for the natural products industry, has announced it is now serving more than 200 retail stores nationwide.

Canadian dietary supplements manufacturer The Martin Health Group has announced it will enter the U.S. market. The company has been in discussions with retailers and brokers to begin distribution of its products. It closed a private placement of stock in order to raise money for the U.S. launch, which will include television and radio advertisement campaigns.

Los Angeles-based Sunset Health Products has announced it has filed a lawsuit against Celebrity Products Direct Inc., Spectrum Worldwide Inc. and their President Lisa Tremain seeking a permanent injunction to prevent the manufacture, marketing and sale of a product line called Original Hollywood Celebrity Diet, which the company says looks exactly like Sunset Health's Hollywood 48-hour Miracle Diet.