Weekly News Update

September 7, 2000

Study Says St. John’s Wort is as Effective as Routine Antidepressants

A study published Sept. 1 in the British Medical Journal (BMJ) found that St. John’s wort offers victims of mild to moderate depression an effective alternative to routine antidepressants. Touted as the largest study of its kind, researchers administered St. John’s wort or imipramine, a prescription antidepressant, to 300 depression patients. According to BMJ, the German study proved St. John’s wort and imipramine to be ""therapeutically equivalent."" The study also found that side effects, such as dry mouth and dizziness, were reported in only 39% of the St. John’s wort patients compared to 63% of the people taking imipramine. In related news, a study published in Cornell University’s Neurology journal said that vitamins E and C supplements have a significant protective effect against memory problems and loss of mental alertness.

New VSHP-AOL Agreement Cuts Coverage Deal in Half

Ten months after inking a two-year, multimillion-dollar deal with America Online (AOL), VitaminShoppe.com (VSHP) on Sept. 6 said it has signed an amended agreement to cut its AOL presence by more than a year. VSHP was originally slated to be an anchor tenant on several of AOL’s proprietary services and was given promotional spots in AOL subsidiaries, such as CompuServe and Netscape Netcenter. The supplements e-tailer declined to disclose the details of the new terms but did say that VSHP will receive targeted ""carriage"" through mid-October primarily in AOL’s Health Channel.

Stocks & Financials: AH&H Initiates Coverage on HCEN, VSHP; RELV Posts Sales; More

Adams, Harkness & Hill (AH&H) has initiated coverage on online drugstore HealthCentral.com (HCEN), owner of Vitamins.com, with an Accumulate rating and a year-end price target of $6/share. AH&H also initiated coverage on VitaminShoppe.com (VSHP) at Accumulate with a year-end price target of $3.25/share.

For the first two months of 3Q00, Reliv Intl. (RELV) reported network-marketing sales of $5.7 million in July and $8.1 million in August, up 27% and 61%, respectively, from the same periods last year.

Dutch food giant Wessanen, owner of St Augustine, FL-based Tree of Life, posted Natural and Specialty Foods sales of $786 million for the first six months of FY00, up 43% from sales of $442 million for the first six months of FY99.

Chamberlin Market & Café Acquires FL Natural Foods Retail Store

AMCON Distributing (DIT) affiliate Chamberlin Natural Foods Inc. said it has completed the acquisition of all outstanding stock of Kissimme, FL-based retailer Natural Way Foods. Terms of the deal were not disclosed. According to a company press release, the Natural Way store will be converted into a Chamberlin’s Market & Café, bringing the chain’s Florida total to eight. Additionally, former Natural Way owner Tom Suskiewich will join Chamberlin’s as a retail store manager.

Web Healthmall Owner Buys Two Herbal Magazines

Cherry Hill, NJ-based GoHealth.MD (GOMD), owner and operator of www.healthmall.com, on Sept. 5 announced that it has entered into a binding letter-of-intent with Loveland, CO-based Herb Companion Press to acquire two titles: The Herb Companion, which has a total newsstand and paid circulation of 186,5000, and Herbs for Health, which has a paid circulation of 250,000. The terms of the deal were not disclosed, but GOMD said the transaction is expected to close on or before Sept. 15—at which time the company will make immediate application to the NASDAQ small-cap market. Upon the signing of a definitive agreement, Herb Companion Press President and CEO Logan Chamberlain will become president and chairman of the company, GOMD said.

Briefly:

According to Salomon Smith Barney VP of Equity Research Greg Badishkanian, Information Resources Inc. (IRI) data for Sept. 6 showed that vitamin, mineral and supplements (VMS) sales within the food, drug and mass channels for the four-week period ended Aug. 13 were down 3.4% year-over-year. As a result, Badishkanian estimates that sales in health foods and vitamins stores for the past five months were flat, and he anticipates continued weak sales for the VMS category for the remainder of 2000.

FDA on Sept. 5 said ingredients in Johnson & Johnson’s (JNJ) Benecol and Dutch-based Unilever’s Take Control can indeed help lower cholesterol levels enough to reduce the risk of heart disease, allowing the functional foods makers to use the health claim.

Healthnet Intl. (HLNT) on Sept. 6 announced the addition of six new licensees to eHealthstores, HLNT’s turnkey Web site setup. Among the six licensees are Ann Arbor, MI-based Arbor Farming Natural Foods Market; Ledyard, CT-based The Green Market; and West Windsor, NJ-based Best of Health.

FTC has filed deceptive-advertising charges against participants—including former Los Angeles Dodger Steve Garvey—in an infomercial for Pacoima, CA-based Enforma Natural Products’ weight-loss products. FTC says the infomercial, which has run more than 30,000 times in the U.S., purports that the products’ ingredients ""prevent the absorption of dietary fat"" and increases the body’s capacity to burn fat.""

The Denver Post on Aug. 31 reported that an October opening is planned for the Cherry Creek Whole Foods Market (WFMI) and that another store is slated for the city’s Highlands Ranch suburb in 2001. Additionally, a WFMI Southwest regional office rep told the Albuquerque Journal that WFMI will open an Albuquerque store in 2001.

According to The Global Food Marketer, Japan’s new organic standards and certification system will go into effect April 1, 2001. The standards will require imported organic foods to be approved by a registered certification organization, such as U.S.-based Quality Assurance Intl. For more information, visit www.fas.usda.gov/scriptsw/attacherep/default.asp.

NBTY (NBTY) on Sept. 6 announced that it has acquired for an undisclosed sum certain assets of Feeling Fine Co., distributor of nutritional products and wellness information programs. Company co-founders Dave Brubaker and Art Ulene, M.D., will continue their association with the Feeling Fine brands, NBTY said.

ConsumerLab.com on Sept. 6 said that 13 brands of soft chews, fortified juices and children’s chewable tablets contained their labeled amounts of calcium. However, four out of 22 brands of traditional adult tablets, caplets and syrups did not pass testing.

Correction: The Aug. 31 Weekly News Update reported that Russell Precious is a founding partner, with Barry Perzow, of Boulder, CO-based Boulderhealth Natural Pharmacy. Precious is a design consultant to the company, not a co-founder.