Nation, Industry Recovering from Terrorist Attacks

Nation, Industry Recovering from Terrorist Attacks

NEW YORK--Even as New York and Washington cleaned up after the Sept. 11 terrorist attacks, business in the natural products industry returned to as near to "usual" as possible. Over the past month, industry members in those cities kept the industry informed of their well being. Additionally, various organizations donated money and supplies to the nation's relief efforts, and certain organizations postponed or cancelled conferences out of respect for the nation's collective state of mind.

Several companies were located in the World Trade Center (WTC) complex. Sidley Austin Brown & Wood, the legal counsel for the National Nutritional Foods Association (NNFA), had its main New York office in One WTC. According to Diane McEnroe, all but one of the 600 people who worked in that location are accounted for. McEnroe, who is based in Sidley's Third Avenue office, added that her location was to have been relocated to the WTC. Sinochem(USA) Inc. had its U.S. offices in Two WTC. According to Thomas Kelly, the personnel in the offices at the time of the attack all escaped without harm. A Cornucopia Health Foods store was also based at the WTC, but all of its personnel are accounted for.

Other industry members are headquartered in the area, including Ullman, Shapiro & Ullman; Avery/Penguin Putnam Inc.; Becoming Inc.; and P.C. & Associates. The offices of law firm Ullman, Shapiro & Ullman--a quarter of a mile away from the WTC--were intact, though the company experienced phone service problems and were unable to get to the offices after the attacks.

Retail stores were also affected. Two General Nutrition Center (GNC) stores located near the WTC were damaged but not destroyed, according to a GNC company spokesperson, and no employees were injured. The Pentagon also housed a GNC store, which was unaffected by the attack. Three Vitamin Shoppe retail stores located south of 14th Street were open for business and phone lines were working.

Event Planning

Some industry events remained on track, while others were cancelled because of personal concerns or travel issues. The industry's largest East Coast retailer-oriented show, Natural Products Expo East, was on schedule to be held in Washington, D.C., Oct. 12 to 14. [Editor's Note: This issue was to press one week prior to Expo East. Please see our Nov. 12 issue for complete post-show coverage.] According to the show organizer, New Hope Natural Media, as of Oct. 3, about 9-percent of exhibitors had cancelled their space. Retailer preregistration was reported to be 3,700 as of Oct. 1; a requalification sample of retailers showed a 95-percent confirmation rate. "We have made a decision to move forward with this show based on all buyer and exhibitor feedback," said Rick Prill, New Hope president, in a note to exhibitors. "The show will go on for the majority who have expressed an interest and in some cases a need to participate, while not penalizing those who choose not to participate."

New Hope was also taking several steps to assist exhibitors and attendees. The company waived all retailer buyer fees, which had been set at $55 per person. New Hope introduced the fees at Expo West in March, causing some concern in exhibitor quarters about whether it impacted the number of buyers in attendance. Exhibitors at Expo East were to receive priority points for booth selection and a 50-percent discount on space upgrades for the 2003 show in the new convention center.

The next major industry event is SupplySide West, set for Nov. 28 to 30 in Las Vegas. Virgo Publishing, the show producer and publisher of Insider, reported that both exhibit and attendance figures are well above last year's figures.

Other organizations decided not to proceed with scheduled events. The Drug, Chemical and Allied Trades (DCAT) Association's Annual Fall Meeting, set for Sept. 20 and 21 in New Jersey, was postponed indefinitely, "out of respect for those who have been victims of this attack as well as for the safety of our members who need to travel." The Council for Responsible Nutrition (CRN) cancelled its conference on performance-enhancing substances and its 2001 annual conference, set for Sept. 28 to Oct. 3 in Tucson, Ariz., and was not planning to reschedule. Finally, the American Herbal Products Association (AHPA), along with its co-sponsor Rutgers University, planned to postpone its Oct. 20 to 22 "International Symposium on Women's Health & the Role of Botanicals" until the spring of 2002.

Charitable Donations, Words of Support

The natural products industry immediately joined in the nation's generous acts by offering both monetary and food donations. Wild Oats Markets donated 5 percent of its national sales from Sept. 18 to the American Red Cross' Disaster Relief Fund. The donation totaled more than $115,000. The Consumer Healthcare Products Association, based in Washington, D.C., donated $10,000 to the American Red Cross. NNFA members and staff donated almost $10,000 to be donated to the Red Cross, New York Firefighters 9-11 Disaster Relief Fund and The New York Times 9/11 Neediest Fund.

Manufacturers stepped forward to help fill product needs. Weider Nutrition International shipped $55,000 worth of Schiff Soy One and Weider SportsMeal bars and shakes to New York, and made a $20,000 donation to the American Red Cross Disaster Fund. Labrada Nutrition cancelled its attendance at the Mr. Olympia 2001 competition and other bodybuilding shows across the country in order to give the funds and products earmarked for these events (totaling $38,000) to relief efforts for rescue workers. M.D. Labs donated nearly 7,000 HDT ProBlend Protein Bars to the American Red Cross to aid firefighters and other relief workers. Amino Up Chemical Co., headquartered in Japan, donated $25,000 cash and $20,000 in its AHCC product to be divided between the New York Firefighters 9-11 Disaster Relief Fund and the New York State Fraternal Order of Police WTC Fund. Archer Daniels Midland (ADM) made a $1 million contribution to United Way's The September 11th Fund and Mayor Rudy Giuliani's Twin Towers Fund to assist the families of the victims.

The power of the Internet helped bring news of relief efforts to the industry. Health Business Partners reported many contributions. The major food donations were energy bars, coming from Balance Bar, Bodywise International, Boulder Bar, Genisoy, Tree of Life Northeast, Prolab/Natrol and Shaklee. Other companies such as Hauser and Nature's Path Foods made cash donations, including matching employee contributions.

In addition to donations, companies around the world shared words of support. Italy's Indena sent word to its customers that the company and the country stand behind the United States. "We Italians want to let the U.S. people know that we are by their side and strongly participate in their sorrow," wrote Daniele Giavini. Similar comments were expressed by Covex in Spain. "We wish you and your nation the strength to recover soon from this dreadful and brutal assault, and our thoughts and prayers are going out to the victims and their families," wrote Dr. F. Calvo. One U.S. industry member was caught abroad, and on television, after the attack. Jarrow Rogovin, president of Jarrow Formulas in Los Angeles, was interviewed in Tel Aviv in front of the U.S. embassy. He added later, "The World Trade Center was an American icon ... This was truly an attack on an American temple."

Facing the Future

Economists have been debating the impact of the attacks on the U.S. economy--whether the stock market and financial market can recover, or if the country will slide further into recession. A report released by Saloman Smith Barney (SSB) noted that financial analysts expect an initial drop in stocks experienced by all industries, but natural products companies would be viewed as a "fundamental stock" that investors might see as a safe investment.

"We recommend investors use the current share price weakness to increase natural products companies," SSB reported. And, according to Greg Badishkanian, an equity analyst and vice president at SSB, natural products will most likely follow the route that NBTY took in the early 1990s during the recession and Gulf War when it experienced increased sales. "Private labels, value brands and any of the other less expensive dietary supplements will do well," he stated. He added that, for the most part, people who consume or supplement with natural products believe in them and will not forsake in the name of a saved penny or two.

In the days after the attacks, industry members also shared their personal thoughts and hopes for the future of the industry and the nation. Sue Taggart, president of New York-based public relations firm AdInfinitum, lived across from the WTC and recalled debris and soot falling on her cab as she left that morning. "Like many other New Yorkers touched closely by the crisis, when we were finally reassured that we and our loved ones were safe, we regrouped by accepting our grief, but we refused to give in to the disaster," she said. "It would be untruthful to say that it is back to 'business as usual' for us, but rather, it is time to take an unusual approach to today's business."