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Natural Products Association is going bankrupt

Analysis by Dr. Joseph Mercola Fact Checked

natural products association is going bankrupt

Story at-a-glance -

  • Natural Products Association opened their doors in 1936 and began a personal care certification program in 2008. The company recently filed for bankruptcy after past CFO Brent Weickert filed a lawsuit charging wrongful termination after discussing his concerns with how the company was being run
  • NPA filed a suit just days later against the board of directors with whom Weickert had discussed his concerns, alleging those conversations undermined the company mission. But that mission does not include labeling products containing genetically altered material or resources
  • The FDA struggles with the term "natural," whether it should be defined and how it should be defined, while the U.S. Department of Agriculture is clear on the definition of "organic." NPA is aware of the difference
  • Product labeling is important because it helps you make informed purchasing decisions. As a consumer you have the option of supporting the Organic & Natural Health Association, whose vision is to develop a world honoring the Earth's resources and recognizing we have a shared global future

Natural Products Association (NPA) is the largest and oldest trade group in the natural products space,1 whose stated mission is to be2 “the leading voice of the natural products industry” and “to advocate for the rights of consumers to have access to products that will maintain and improve their health and for the rights of retailers and suppliers to sell these products.”

The NPA founded their certification of personal care products in 20083 to set a standard to determine whether a product could rightfully be called “natural.”4 In their announcement of certification of their 700th product in 2011, the NPA revealed 63 companies had certified 472 products and 233 ingredients with their organization. John Gay, executive director at the time, said:5

“In just over three years, NPA has certified more than 700 products and ingredients under the NPA Natural Seal, helping consumers across the nation find natural products at their favorite stores. Both large and small businesses have earned the coveted Natural Seal.”

According to InFocus Marketing,6 their mailing list of members held 5,548 records on August 25, 2019. However, being the largest and oldest does not necessarily mean being the best.

NPA filing bankruptcy but plans restructuring

On August 19, 2019, in the district of Delaware (of Washington, D.C.),7 the Natural Product Association filed chapter 11 bankruptcy, claiming 49 or fewer creditors with estimated assets and liabilities between $1 million and $10 million. The court documents identified Brent Weickert as the primary creditor with an unsecured claim of $780,179.13. Other creditors included:8

DC Arena, Washington D.C. $498,975.00

Parry and Romani Associates,9 a bipartisan lobbying firm, for $100,000

Attorney Lloyd Oppong from Jackson Lewis P.C.10 $11,736.14

Document Managers Digidoc11 $19,620.00

The Keelen Group, LLC12 lobbyists retained by NPA for $40,00013 to which NPA still owes $8,000

Bloomberg,14 $6,746.49

Gula Graham,15 fundraising firm $5,000

The NPA listed an additional 13 creditors, including $280.72 to Comcast for cable services. In a report from Reuters,16 the NPA cited six concurrent years of financial loss and arbitration with their past CFO, Brent Weickert, as the reason for filing chapter 11.

The organization opened in 1936 as the American Health Foods Association, but changed its name in 2006 to the Natural Products Association.17 The lawsuit by Weickert was filed in 2015, in which he charged the NPA and its CEO Dan Fabricant with wrongful termination and creating a hostile workplace.18

He alleges that after discussing his concerns with the NPA’s board of directors about how the office was being run, he was abruptly terminated. After Weickert filed his lawsuit,19 the NPA sued board members20 with whom Weickert had communicated, alleging their private conversations undermined the mission of the organization.

In the suit against the board members, NPA alleges Weickert’s job performance had been called into question. Then, Weickert began his discussions with board members, attempting to have Fabricant removed.

The NPA claims that “despite Weickert's allegations of financial impropriety,” the organization was “on more secure financial footing” through reformation of their dues structure and the addition of 350 new members since April 2014.21 In the chapter 11 filing, the company listed 20 creditors, including five owed more than $10,000.22

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Protecting membership a top priority

In a statement about the expected financial restructure the NPA will undergo to continue to serve their membership, Reuters reported that Fabricant called this time a “breathing spell.” He said the group would shift their focus to advocacy and recruiting new members.23 In a statement following the court filing of chapter 11 papers, a company representative said:24

“The filing is expected to have no impact on day to day operations and the important work the NPA pursues on behalf of its over 1,000 members. We are proud to be the oldest and largest non-profit dedicated to the natural products industry and it will be business as usual as we proceed through the financial restructuring, with no changes to our activities, initiatives or interaction with members and government officials.”

During the second and third quarters of 2018, the trade association added 29 new members, including Baxco Pharmaceutical, Biosil Technologies, U.S. Food Manufacturing, Wasserman & Associates and Zade Global.25

Following the recent warning from Amazon that it may have sold fake supplements, the NPA and Fabricant insinuated Amazon could have avoided this situation completely, saying:26

“We met with Amazon over a year ago to encourage their participation in the Supplement Safety and Compliance Initiative, to play a role, industry-wide to establish a system of continuous improvement, that manufacturers and distributors must meet or exceed to be accepted in major retailers.

We’re confident that NPA membership and all of the benefits and information that comes with it could offer Amazon a more streamlined approach to handling bad actors.”

What about genetically engineered ingredients?

According to the NPA natural standard, products must be “based on natural ingredients, safety, responsibility and sustainability.”27 Products under their personal care seal must be made from renewable resources without petroleum compounds. The definitions for natural, safe, responsible and sustainable from their website are:28

Natural Ingredients — A product labeled ‘natural’ should be made up of only, or at least almost only, natural ingredients and be manufactured with appropriate processes to maintain ingredient purity.

Safety — A product labeled ‘natural’ should avoid any ingredient with a suspected human health risk.

Responsibility — A product labeled ‘natural’ should use no animal testing in its development.

Sustainability — A product labeled ‘natural’ should use biodegradable ingredients and the most environmentally sensitive packaging.”

To assist manufacturers, the NPA published a standard for certification,29 outlining ingredients that are allowed and prohibited as well as other requirements. Some of those requirements include allowing all substances listed as generally recognized as safe (GRAS) by the FDA, requiring companies to avoid animal testing and requiring they use recyclable and post-consumer recycled content in their packaging.

However, at no point in the 10-page description30 of what is and is not allowed do they address the issue of genetically engineered or modified ingredients. Based on their standards, a product may receive the NPA's natural certification for personal care products and still have 100% GE ingredients as long as they come from renewable sources and do not contain petroleum products.

This is not a factor the NPA overlooked accidentally in their certification process. In November 2012, California placed Proposition 3731 on a ballot, which would have required labeling of foods made from genetically modified plants or animals and prohibited them marked as “natural.” The initiative failed by a short margin.

Although labeling GE products would benefit consumers, the NPA did not support Proposition 37. John Shaw, CEO of NPA at the time, stated the association did not support state-by-state GE labeling efforts.32 Speaking at the Supply Side West trade show in November 2012, Shaw said proposals in other states for GMO labeling, also prohibiting them marked as natural, would be bad news.33

Is it natural or organic?

Many find labeling between natural products and organic products to be confusing. With little regulation around the term “natural,” manufacturers have found that using the term increases sales without needing to adhere to regulations.

A team of researchers34 from Europe analyzed studies on consumer preferences for product “naturalness,” finding this to be important to consumers. The implications for the food industry are significant as the FDA does not currently regulate the term.

In a survey by Consumer Reports,35 similar results were found. Urvashi Rangen, Ph.D., commented that most consumers appear to believe the term “natural” means more than it does, and when they purchase foods labeled as natural, many think they're getting the same benefits as those labeled organic. Consumer Reports calls the term “natural,” organic’s imposter.

In late 2015, the FDA requested comments on the use of the term “natural” in food labeling, specifically asking if it was appropriate to define the term and if so, how it should be defined.36 The comment period closed May 10, 2016, after receiving 4,148 responses. Many of those were derogatory in characterization of why the question was being asked in the first place.37

While the FDA struggles with the term “natural,” the U.S. Department of Agriculture38 established a final rule on the definition for “organic” and created the National Organic Program to facilitate products meeting consistent and uniform standards. There is a definite difference between what is natural and what is organic, and NPA is well aware of the definition.

In November 2015, following the FDA’s request for commentary on the term “natural,” NPA announced their support for the term “organic” as meaning non-GMO and they would seek a multitiered approach to what natural may mean in food and product labeling.39

At the same time, representatives from NPA say they support a consumer's right to be informed of the components in their food and dietary supplements, including GMO-labeling, and that they encourage voluntary labeling while opposing any private enforcement.40 But, while they say they support voluntary labeling, NPA has not yet determined to include this factor in their own certification standards.

Product labeling is important to your decision making

It appears the NPA is splitting hairs, knowing most have difficulty distinguishing the difference between natural and organic, believing natural products may in fact be free of genetically altered sources. Genetically modified organisms have had their genetic material altered using engineering methods to produce something that does not occur in nature.41

Genetically modified foods were initially introduced with purported advantages such as plants developed to resist drought, or those that require significantly less pesticide while purportedly offering increased yields. The EPA refers to GMO foods as having “plant incorporated protectants,” or pesticide substances produced inside the cells after genetic material has been implanted in the seed.42

This means pesticide material is not only applied to the outside of the plant, where it may potentially be washed away, but that it also develops inside the plant where it cannot be removed. Health risks associated with these foods have not been clearly identified and little research has been done relative to the amount of genetically altered food injected into the food supply.43

Glyphosate is one herbicide genetically altered seed is bred to withstand. However, genetically modified tolerant crops have led to an increased use of chemicals to kill weeds that have developed resistance.44 The International Agency for Research on Cancer (IARC), an arm of the World Health Organization, reclassified glyphosate as probably carcinogenic in 2015.45

The Organic & Natural Health Association46 was developed with the mission of bringing together consumers and corporations to align with regenerative systems in the support of people and the planet. This organization is a product of the growing need for identification and research into healthy food sources.

Their primary guiding principle is transparency, which their members must pledge to maintain throughout the supply chain in the manufacture of their products.47 The organization maintains two areas of research: quality testing48 and nutrient field trials,49 which are performed in partnership with GrassrootsHealth and HRI labs.

The organization is open to consumers, where you may consider helping to make a difference in the quality of food entering the food chain and products used at home. Consider becoming a member50 and supporting an organization that publishes their member directory and whose vision it is to develop a world honoring Earth's resources and recognizing our shared global future.51

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