the voice of the industry - npainfo.org · npa has always understood that members expect it to give...

The Voiceof the Industry

Annual Report 2009/2010

2 ANNUAL REPORT 2009/2010 NATURAL PRODUCTS ASSOCIATION

A Message from thePresidentDear Colleague:

This year’s annual report could easily be entitled “ValuableCommunication.” As a long-time retailer, I know that goodcommunication is a very important part of business. As Presi-

dent of the Natural Products Association, I know it is essential to present a clearand unified voice for all segments of our industry.

NPA has always understood that members expect it to give them a voice in Wash-ington, DC and issues this year have certainly called this commitment into action.NPA Vice President Daniel Fabricant, Ph.D., gave outstanding testimony at a Sen-ate hearing on steroids and sports supplements last fall, reinforcing our presenceand credibility on Capitol Hill, and piquing the attention of major broadcast newsprograms and journals, enhancing our integrity in the media.

Our Executive Director, John Gay is committed to rapid response to both legisla-tive concerns and to answering negative or misleading press. For example, whenincorrect statements regarding the regulation of our industry were made at aspecial committee hearing last fall—while still in the hearing audience—Johnresponded directly to the guest witness, explaining that the dietary supplementindustry is the fourth most regulated under the FDA. Like then, NPA will continueto provide prompt responses to misinformation.

With several potentially adverse bills being proposed, and possibly more in thewings, NPA will continue to inform its members about harmful or constrictive gov-ernmental issues. Case in point: Thanks to a groundswell of action from NPA mem-bers and interested supporters around the country this spring, we helped influencethe actions of congressional leaders to curb several bills and additions to legislation.

As we head into the association’s 75th year of speaking out for the natural prod-ucts industry, I look forward to the ways your association will continue to be avoice for all of us when we need to be heard by media, legislature and consumers,now and in the years to come.

Pat Sardell

PresidentNatural Products Association

Dear Association Member:

As the leading voice of the natural products industry, our mis-sion is to advocate for the rights of consumers to have accessto products that will maintain and improve their health, andfor the rights of retailers and suppliers to sell these products.

I think the NPA’s efforts over the past year have shown the ability of a strongvoice to cut through the noise and deliver a clear message to government, mediaand consumers.

If these times teach us anything, it is that the natural products industry faces anincreasing number of challenges. There are active, powerful members ofCongress who wrongfully believe we are unregulated or too loosely regulated.The media pick up on the misinformation and create a level of distrust and con-cern among consumers. All this makes the jobs of the NPA and of retailers andsuppliers more difficult. But, because of the efforts and dedication of associationstaff and members, we know we can win.

I was a bit of an outsider coming into natural products industry. But in the pastfew months, I have become more and more proud to be a part of an industry likeours that does so much good for its customers, the people who work in it, andeven for the nation’s economy.

By listening to the voices of NPA staff and members, I have learned a lot and havebeen quite pleased with the willingness of so many to take the time to sit down andgive me their perspectives on their businesses, the industry, and the association.The passion and commitment that comes through is amazing and encouraging.

But I know the fight to keep natural products safe, reliable and available for con-sumers is far from over. Rest assured that the Natural Products Association willcontinue to be the voice of the industry, speaking out on behalf of its membersand the work they do.

John Gay

Executive Director and CEONatural Products Association

A Message from theExecutive Director

NATURAL PRODUCTS ASSOCIATION ANNUAL REPORT 2009/2010 3

The Voice of Quality and Safety forConsumers

Maintained and expanded programs like theTruLabel® program, that boasts more than19,000 registered labels, and the GoodManufacturing Practices (GMP) program, thatthis year certified nine new companies, for atotal of 58 GMP-certified companies.

Certified six new companies and 104 newproducts this year through the NaturalCertification program for health and beautyproducts, as well as 92 ingredients from sixcompanies. At present, 19 companies and 288products can claim the valued certification.

Launched the natural certificationprogram for household productsand certified its first products,granting the first Natural HomeCare seal to Green Works® NaturalBathroom Cleaner.

One voice crying out in the wilderness may be heard,but many voices are sure to be noticed. The NaturalProducts Association is the voice of the industry,speaking out for its thousands of members and the150 million Americans who count on natural productsto support and enhance their natural lifestyles.

This year’s actions in science, regulatory, legislative,international operations, and member services reflectthe association’s focus on keeping industry and associ-ation standards high, and on upholding the level ofquality programs and service for the natural productscommunity and consumers.

Natural ProductsAssociation: The TrustedVoice of the NaturalProducts Industry



A Powerful Voice onCapitol Hill

Nearly 150 members andadvocates attended the13th annual NaturalProducts Day, discussingissues affecting theindustry and consumers during more than 140 meetings withcongressional leaders.

NPA testified at U.S. Senate hearings on steroids and sportssupplements, calling for greater enforcement of the law inkeeping illegal steroids marketed as dietary supplements offthe market.

The NPA applauded the U.S. Justice Department DrugEnforcement Agency’s (DEA)’s classification of three substancesas anabolic steroids under the Controlled Substances Act (CSA).

When the Sen. John McCain’s Dietary Supplement Safety Actof 2010 (S.3002) threatened the way its members do business,NPA, along with the Coalition to Preserve DSHEA, which itleads, launched an advocacy campaign, inundating Capitol Hill withwell nearly 40,000 messages from members and advocates,leading to the bill being tabled.

NPA spread the word about the provision hidden in RestoringAmerican Financial Stability Act (S.3217) that would havegiven the FTC extended powers over the industry, and theindustry advocates rallied again, hitting Congress with morethan 18,000 messages in a matter of weeks.

A Voice to Benefit MembersKeeping a competitive edge is more important than ever. And NPA membershiphelps businesses keep that edge and take them to the next level. NPA membersare better informed about the industry, have special access to business tools andare able to respond quickly to changes in the business and regulatory climate.This year, the NPA provided its members with even better benefits:

The association Introduced health insurance for the membership

Members saved over $1 million on shipping costs by taking advantage ofdiscounts offered through FedEx

Natural Products Day Morning Session.

Fabricant testfiesat Senate Hearingon Steroids


A Clear, Balanced Voice in the MediaThe association served as the voice for the industry in top-tier media outletsresponding to misleading articles in the New York Times, Reader’s Digest,Sports Illustrated, and the Associated Press countering negative conclusionsand substantiating the safe and effective use of supplements.

NPA’s efforts to define “natural” with itsNatural Certification programs wererecognized in trade publications likeGlobal Cosmetic Industry and NaturalFoods Merchandiser, and in mainstreammedia outlets like O the Oprah Magazineand Elle.

NPA defended the safety and qualitystandards of dietary supplements onboth ABC’s Good Morning America andthe Dr. Nancy television programs,commenting on reports of anabolicsteroids being found in dietary supplements.

NPA pointed out the research flaws in studies published in JAMA on severalpopular supplements—Ginkgo biloba, folic acid, vitamin B12, vitamin E andvitamin C.

When CNN.com published a commentary calling for “real scrutiny” of herbalremedies, NPA responded with facts, stating that herbal products are indeedregulated and reminding the author that more than 150 million Americansmake “intelligent” choices about their health every day, and choose to usesafe, effective herbal products.

New Voices in the AssociationAfter nine years of significantcontributions as the association’sexecutive director and CEO, David R.Seckman, left NPA to head the FoodProcessing Suppliers Association.

In October, John F. Gay was namedNPA’s executive director and CEO,following interim CEO Daniel Fabricant,Ph.D., the NPA’s Vice President of GlobalGovernment and Scientific Affairs.

In December, Cara Welch, Ph.D. joined the NPA as the program coordinatorfor the Scientific and Regulatory Affairs department, providing additional

Natural MarketPlace 2009

Natural Certification home products high-lighted on "The Doctors" television show.

Natural Products FoundationNPF referred more than 100 mediaopportunities to industry experts, toreinforce its message through the generalpress. And, more than 70,000 unique visitors obtained information fromNPF-supported websites www.supplementinfo.org andwww.naturalproductsfoundation.org.

Twenty-eight cases of violations of the Foundation’s Truth in Advertisingstandards were investigated and pursued.

NPF made matches between five natural product suppliers and fivecommunity health clinics nationwide through its Healthy Match effort,which connects community health programs experiencing financial strainwith natural products companies willing to donate products, such asnutrition bars, dietary supplements and health and beauty aids.


guidance and technical expertise regardingthe scientific and regulatory programs.

Denise Johnson joined the NPA staff inMarch 2010, as its new accounting andoffice manager in the Washington, D.C.office, supporting the executive office andfinance department.

New Web site launched in December.

Natural Products Association—ChinaThe Voice of the Industry in the World’s Biggest Market

NPA-China hosted seminars in China to educate Chinese suppliers on U.S.market and regulatory requirements. These seminars helped NPA to findquality suppliers, test them and get them GMP certified, so associationmembers can be assured that ingredients and products being sourced inChina are of the highest quality.

NPA-China was fortunate enough to extend its third year of MarketDevelopment Cooperator Program involvment.

After an extensive audit and follow-up confirmation of complianceactivities, Shandong Zhongyuan Greentech successfully passed NPA’s GMPcertification program, becoming the first in China to earn NPA certification.

NPA-China attended the ninth annual InterHealth Expo, mainland China’spremier expo for natural health products.

NOW International, an NPA-China board member, won the Departementof Commerce “E-Star” award.

NPA-China continued to meet with Chinese officials drafting new regulationsfor its dietary supplement market, serving as a valuable resource.


Consolidated Financial Statements

The condensed and summarized financial statements of the Natural Products Association were prepared by, and are theresponsibility of, Natural Products Association management. The statements have been prepared in conformity with gen-erally accepted accounting principles appropriate in summary circumstances and include amounts that are based on man-agement’s internal reports.The association is audited annually by an independent accounting firm as mandated by the Natural Products AssociationBylaws. Those records may be obtained upon request from Natural Products Association headquarters.

Natural Products AssociationStatement of Financial Position

Year Ended December 31 2009 2008

Assets

Current AssetsCash and cash equivalents $562,229 $725,081Restricted Cash — 350,000Investments held to maturity 6,255,318 4,901,238Accounts receivable 86,979 303,348Prepaid expenses 24,755 17,953

Total current assets 6,929,281 6,297,620

Property And EquipmentProperty and equipment at cost,net of accumulated depreciation 1,889,777 1,922,190

Investments held to maturity 369,726 273,431

Other Assets 13,494 15,625

Total assets $9,202,278 $8,508,866

Liabilities and Net Assets (Fund Deficit)

Current LiabilitiesAccounts payable $62,015 $25,209Accrued liabilities 333,460 142,350Deferred membership dues 709,411 670,277Deferred revenue - other — 83

Total current liabilities 1,104,886 837,919

Long-Term Debt — —

(Fund Deficit) Net AssetsUnrestricted 1,291,796 240,726Unrestricted - board designated 6,805,596 7,430,221

Total (fund deficit) net assets 8,097,392 7,670,947

Total liabilities and net assets (fund deficit) $9,202,278 $8,508,866


Natural Products AssociationStatement of Activities

Year Ended December 31 2009 2008

Revenue and Other Support

Convention $116,181 $1,529,329Membership dues 1,273,913 1,243,664Interest income 114,306 241,389Quality Assurance programs 452,527 330,913Membership services income 417,259 490,678International 67,987 71,695Gain of sale of assets/Investment income 1,176,371 6,772,881Other revenue 39,200 71,890

Total Revenue and Support 3,657,744 10,752,439

Expenses

Program ServicesConvention 114,086 1,687,719Legislative 431,851 433,835Communications 466,883 556,778Quality Assurance programs 507,845 459,232International 257,438 263,138

Total Program Services 1,778,103 3,400,702

Supporting ServicesManagement and general 495,963 368,595Membership services 530,162 412,202Board expenses 271,321 386,146Legal Settlement 155,750 —

Total Supporting Services 1,453,196 1,166,943

Total expenses 3,231,299 4,567,645

Increase in Unrestricted New Assets $426,445 $6,184,794

Change in Net Assets 426,445 6,184,794

Net assets, beginning of year 7,670,947 1,486,153Net assets, end of year $8,097,392 $7,670,947


Pat Sardell, PresidentCountry Vitamins, Corvallis, Ore.Debra Short, Past-PresidentHouse of Health, Shawnee, Okla.Pete Zambetti, TreasurerCapsugel, Peapack, N.J.

Carilyn Anderson, Chair, Supply CouncilCarlson Labs, Arlington Heights, Ill.Randy Reinartz, Chair, Retail CouncilWayne and Mary’s Nutrition Center,Sioux Falls, S.D.

Directors

Mission StatementAs the leading voice of the natural products industry, the Natural Products Association’smission is to advocate for the rights of consumers to have access to products that willmaintain and improve their health, and for the rights of retailers and suppliers to sellthese products.

Vision StatementThe Natural Products Association strives to achieve a broader, more accessiblemarketplace for natural products that will improve the quality of life for consumersworldwide.

Bruce BarleanBarlean’s Organic Oils, LLC, Ferndale,Wash.Gary BarrowsBluebonnet Nutrition Corp., Sugar Land,TexasCarolyn BehrmanNatural Choices for Healthy Living,Columbus, Ind.Rhonda BoneRhonda’s Nature’s Way, San Antonio,TexasDonnie CaffreyGood Foods Grocery, Inc., Richmond, Va.Roxanne GreenPCC Natural Markets, Kirkland, Wash.Tom GrilleaUnited Natural Foods, Inc. (UNFI)/Select Nutrition Division, Uniondale, N.Y.Gary HumeNutraceutical Corp., Park City, Utah

Howard PollackRainbow Acres, Los Angeles, Calif.Peggy RangerPeggy’s Natural Foods, Inc., Stuart, Fla.Michael SchwartzMichael’s Naturopathic Program,San Antonio, TexasTom SokoloffParadise Health Foods, Palm Bay, Fla.David StouderApple Health Foods, Redwood City, Calif.John VenardosHerbalife, Torrance, Calif.Bruce WorleyHumphreys Pharmacal, Inc., EastHampton, Conn.Jeff WrightWright’s Nutrients, New Port Richey, Fla.

Executive Committee


Natural Products Association RegionsNatural Products Association NorthwestP.O. Box 1200Port Townsend, WA 98368Ph: (360) 379-2805www.nnfa-northwest.com

Natural Products Association East29 Pickwick DriveMarlton, NJ 08053Ph: (856) 912-0744www.npaeast.org

Natural Products Association Midwest6939 Sparrow LaneColumbus, OH 43235Ph: (614) 766-8338www.npamidwest.org

Natural Products Association Southwest5524 Bee Cave Road, Suite 2-AAustin, TX 78746Phone: (512) 428-4444www.npasouthwest.org

Southeast Natural Products Association5309 Lime StreetNew Port Richey, FL 34652Ph: (800) 828-7250www.southeastnpa.org

As a member of the Natural Products Association, I will do my best to adhere to thefollowing Code of Ethics:

• I will sell or supply only those nutritional foods, dietary supplements andrelated products and services that may be helpful to consumers who seek tomaintain or improve physical fitness and good nutrition, or seek to correctnutritional deficiencies.

• I will not engage in the treatment, diagnosis, or prescribing for any pathologyunless lawfully licensed to do so.

• I will not knowingly sell or supply those products that contain harmful chemicalfood additives or artificial ingredients that are alien to the recognized concept ofnatural foods, nor will I knowingly deal in products that are untruthfully labeled.

• I will not engage in false or misleading advertising.• I will support all public measures that protect the environment, safeguard our

natural resources and improve the quality of life.• I will cooperate with all professional, educational, civic, and consumer organiza-

tions that support greater nutritional information and consumer rights.• In pursuit of this code and these goals, I will defend our First Amendment right

of freedom of speech and press to impart truthful information concerning dietand nutrition and will defend the health freedom right of consumers to obtainsuch data from the sources that they may choose.

Code of Ethics

OfficesHeadquarters Office

1773 T Street, N.W.Washington, DC 20009ph: (202) 223-0101www.NPAinfo.org

China Office

Natural Products AssociationThe Office Park10 Jintong West Road, Tower AB 6th FloorChaoyang District Beijing, China 100020Ph: +(8610) 6556-5737www.NPAinfo.org/China

1773 T Street, NWWashington, DC 20009phone: (202) 223-0101

fax: (202) 223-0250

www.NPAinfo.org

Established in 1936, the Natural ProductsAssociation is the nation’s largest andoldest non-profit organization dedicatedto the natural products industry. Theassociation represents nearly 10,000retailers, manufacturers, wholesalersand distributors of natural products,including foods, dietary supplements,and health/beauty aids.

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