Asked about the controversial stimulant during a conference call about the firm’s second quarter results yesterday, GNC chief executive Joe Fortunato said: “The pre-workout category is still strong but it is not being driven by DMAA products.”
We have made a very concerted effort to move away from DMAA products
He added: “We have made a very concerted effort to move away from DMAA products in our stores and we’ve done that in a number of ways …
“So we’ve kind of stripped off promotions on the DMAA products and doubled promotions on some of the other products… so we remained margin-neutral out of the situation but decelerated the sale of DMAA products significantly.
“If we look at our exposure to DMAA products right now… it is continuing to decline by the day. Even better news is that the products that have replaced DMAA are selling at a faster pace."
Rather than keep the controversy going…
Sales of USPLabs’ top-selling DMAA product Jack3d started to decline at the end of last year (well before the FDA's April crackdown) although sales of its fellow DMAA-containing product OxyELITE Pro did not, he noted. "[DMAA-containing products] are probably about 40% of the sales levels they were at last year."
He added: “Rather than keeping the controversy going on DMAA it seemed like an easier thing to do [to move away from DMAA] as the replacement products have been very effective and did not have the so-called tarnished effect of DMAA."
GNC had conducted a consumer survey and found that just 2% of consumers that were buying products containing DMAA actually knew what it was, he said, "so DMAA was not what was driving the sales of these brands, they just became popular brands with consumers".
April: ‘We are completely opposed to this unilateral, factually and legally unfounded action by the FDA’
His comments mark a clear shift in rhetoric from three months ago, when GNC told this publication that “the dietary supplement industry is united on this issue and is adamantly opposed to the FDA's position on the use of this ingredient [DMAA]”.
The firm, which has been hit with more than one class action lawsuit over DMAA, told us: “As a company, we are completely opposed to this unilateral, factually and legally unfounded action by the FDA.
“There is no scientific/medical evidence that demonstrates any causal link between DMAA and any adverse medical condition, let alone a death.”
MARKED sports nutrition range scheduled for full-scale roll-out in September
MARKED, GNC’s new range of sports nutrition products developed with actor and producer Mark Wahlberg, includes the strapline ‘banned-substance-free’, and is DMAA-free.
All products in the seven-strong range have been tested for banned substances by anti-doping lab HFL Sport Science, said Fortunato, who said products were just starting to hit stores now, but would be rolled-out nationally in September. It will also be made available to other retailers.
“We’re excited about its potential”, he said.
The range includes a pre-workout igniter, a 'blast & burn' pack with conjugated linoleic acid (CLA), a 100% whey protein complex, whey protein bars and shakes, a multi-vitamin daily pack and a mass gainer product with carbs, protein and healthy fats.
The pre-workout igniter contains beta-alanine, creatine, BCAA, betaine, L-arginine, L-citrulline and grape seed extract - and no DMAA.
Wahlberg, who plays a bodybuilder in new film 'Pain and Gain' (out next year), credits his success in bulking up for the role to the new product range, which he will be promoting in GNC stores later this year.
Second quarter results: Sales surge 19.4%
GNC, which posted an 85% hike in net income to $66.7m in the three months to June 30, and a 19.4% rise in revenues to $619.1m, continues to outperform the market, with proprietary brands such as Mega Men, Total Lean and Pro Performance now accounting for 57% of sales, said Fortunato.
The company, which began trading on the New York Stock Exchange last year, has more than 6,000 stores in the US and 1,800 overseas selling a range of products under GNC proprietary brands including Mega Men, Ultra Mega, GNC Total Lean, Pro Performance and third party brands.
Bosses are predicting sales of approximately $2.43bn for the full year 2012, a 17.5% increase over 2011.