Naturade, the US group which makes the Total Soy range of soy protein products, saw its first quarter sales fall by 18 per cent to $3.5 million (€3.8m), the first decline in sales for the company in two years.
The recent approval of a health claim for soy-based food products by the Food and Drug Administration (FDA) has helped raise interest in the soy food market, and this is likely to benefit all the industry's leading players, including Naturade. The decline in Q1 sales came as a result of exceptional growth in the previous two years which the group was unable to repeat in 2002.
The company said that mass market sales were 20 per cent below those of 2001 as volumes naturally declined from the high levels seen at the time of Total Soy's launch. There was also a slowdown in the introduction of new products in 2002 as the company concentrated on its core product lines.
Sales to health food accounts were down some 16.6 per cent reflecting the continuing underlying weakness in the health food store channel and the company's decision to discontinue certain lower volume products.
Lower sales did nothing to help the company improve its financial position, and Naturade posted net losses of $666,000 for the quarter, only slightly worse than the losses of $637,000 seen a year earlier.
Naturade CEO Bill Stewart said: "Despite our sales slowdown, we remain encouraged by the strength of our repeat purchases and increasing consumer takeaway of our Naturade Total Soy line. The revenue decline is almost entirely explained by the non-recurring new distribution pipeline sales which occurred in 2001.
"We're addressing the business environment with several new initiatives, including new second-half introductions, promotions and product upgrades. In addition, we're pursuing growth through strategic alliances with other companies by capitalising on additional resources from our new investment partner, Westgate. We are excited by the interest and support of both Health Holdings and Westgate in identifying external opportunities that can strengthen financial performance for the long-term."