The Supply Side: Locally made Glucose Health seeks a place with retailers

The nutritional supplement startup Glucose Health has big plans to launch a powdered tea mix that helps Type 2 diabetics maintain blood sugar balance. The drink mix is being compounded by John Lykins, a local pharmacist and the owner of Natural Solutions Labs in Gravette. Lykins also operates pharmacies in Lowell and Lincoln.

Lykins said his services were sought out by West Palm Beach, Fla.-based Glucose Health Inc. to manufacture the drink mix which is the first of its kind in the marketplace given that it’s a tea and not a dairy-based shake alternative.

His pharma lab in Gravette already compounds and manufactures supplement products such as Happy Joints, which can be found on Wal-Mart shelves. The lab employs five but is set to double that as more retailers sign-on to sell the product in the coming months.

He said the lab is gearing up to produce Glucose Health drink mix as the product manufacturing recently cleared the required protocol by the Federal Drug Administration. While the FDA does not regulate, nor endorse any dietary supplements, the agency does routinely inspect the laboratories where such products are made and oversee the labeling and packaging of this pharma category.

Glucose Health announced Jan. 7 that their drink mix had completed the FDA’s Current Good Manufacturing Practices standards and is proceeding forward with the manufacturing phase in hopes of getting the product into retailers later this year.

Lykins said he was excited about the possibilities of Glucose Health because there is a need for a dairy alternative for the millions of diabetics and pre-diabetics who rely on over-the-counter products to help regulate blood sugar.

“While our competitors rely upon fiber as their active ingredient to help maintain blood sugar balance, our Glucose Health formula combines the same fiber content with four important ingredients — extracts of Cinnamon Tree Bark, Chromium GTF, Green & White Teas and Vitamin C,” Lykins said.

Glucose CEO Murray Fleming said the company’s mission is to engage consumers interested in Type 2 diabetes with the only alternative to dairy-like shakes. Glucose Health’s tea mix comes in two flavors, blueberry and strawberry and retails just under $25 for a two-months supply.

PRODUCT ORIGINS
The formula for Glucose Health was originated by Dr. Chandrasekhar Mallangi, who formerly managed Nestle USA nutrition product development for 25 years. An investment group led by Fleming purchased the drink mix formula that was originally designed as a direct-to-consumer product under the label Type2-Dense. Mallangi signed on as an advisor to Glucose Health in June to help oversee the move toward retail channels.

Securing manufacturing in Northwest Arkansas just a few miles from Wal-Mart’s home office was one of the company’s first priorities. Chief Marketing Officer Peggy Knight joined the company in April. She spent two decades at Wal-Mart, and plans to pitch the tea mix alternative to the retail giant and its competitors in the next few months.

Amazon.com has already agreed to sell the tea mix and it will be on the site in a few weeks under the new Glucose Health label, Knight said. 

MARKET POTENTIAL
The market for products like Glucose Health is growing as 29.1 million people as 9.3% of the U.S. population have diabetes. The Center for Disease Control reported in 2014 that 21 million American are diagnosed with diabetes and 8.1 million remain undiagnosed.

The Hispanic population has one of the higher rates among its adult population at 12.8%, trending up for Mexican Americans at 13.9% and 14.8% for Puerto Ricans, according to CDC data.

“We know health care advocates are concerned about the toll of diabetes on the U.S. economy in the coming years,” Knight said. 

The direct medical cost for type 2 diabetes exceeds $100 billion and accounts for $1 of every $10 spent on medical care in the United States, according to the United Health Foundation.

Knight said this concern is a catalyst for retailers to seek out more over-the-counter products that promote blood sugar health and other ailments. That catalyst is what encourages product suppliers like Glucose Health.

Dr. John Agwunobi, the former president of health and wellness for Walmart U.S., said in 2014 there were ample opportunities to grow market share. One area of potential cited by Agwunobi was over-the-counter (OTC) wellness and nutrition innovation.

“There is room for product innovation across multiple categories in both private label and branded,” he said.

The retail giant has since said it’s seeing older seniors and demand growth in diabetes and incontinence products and continues to extend suppliers with new product innovations to bring them to table.

HEALTH STATUS
A recent report from the United Health Foundation ranks America’s health each year down to the state level. The biggest challenges facing the U.S. health status is that Americans have yet to achieve success in preventing chronic health conditions such as obesity and diabetes which are often intertwined. 

“Obesity — a leading contributor to death in the US — has risen at a troubling pace. Since 1990, obesity has increased 153%, from 11.6% to 29.4% of adults. After improving slightly in 2013, obesity rates rose again last year. Also, since it emerged as a metric 20 years ago, self-reported diabetes has more than doubled and is at 9.6% of the adult population,” the report stated.

State health rankings put Arkansas at No. 49 out of 50 with Mississippi being ranked last. Louisiana, Kentucky, and Oklahoma complete the bottom 5 states in the report.

Looking specifically at diabetes, the rate of incidence is above 11.1% in Arkansas, higher than the 9.6% U.S. rate. Alabama and West Virginia posted the highest rates of diabetes at 13.8% and 13%, respectively. Mississippi (12.9%) South Carolina (12.5%) and Tennessee (12.2%) also ranked in the bottom five.

POTENTIAL OBSTACLES
Knight said the southern region of the U.S. is a prime target for the Glucose Health drink mix given their higher rates of diabetes and the product manufacturer is centrally located being in Northwest Arkansas.

But getting the product in the hands of diabetic consumers is no slam dunk. Knight said she is overseeing an intense marketing campaign in the next few months and those chosen to test the product are reporting favorable results.

“I think the fact that this product is a light tea blend that can be drank one time each day is a nice alternative to heavier shakes that already exist in the market. Time will tell and we have lots of work to do, but we believe this product has loads of potential to help diabetics maintain stable blood sugar.” Knight said.

Glucose Health formerly sought its operating capital by going public under the business name Bio-Solutions Corp. Late last year the company sought a name change to Glucose Health and reorganized. The company shares now trade over-the-counter under the ticker symbol GLUC with a share price of 7 cents. Fleming owns a 50% stake since taking over as CEO.

The concerns noted by the company in its most recent filing with the Securities and Exchange Commission (Sept. 2014) was its lack of profits thus far under the former management. All publicly traded companies are required to post any potential risks to investors. With that, the company notes that its officers and directors going forward may need to contribute added capital to sustain operations if product sales should stall.