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Atrium Innovations: Capitalizing on the Growing Dietary Supplement Market

A revolution in health care is taking place in North America, as well as globally.  It is the realization that maybe modern medicine and traditional or holistic medicine are not in competition with one another.  That both these medical approaches are valid and can be used to complement each other.  Over the last few years there has been a shift and clear movement toward examining the relationship between modern and ancient approaches to medicine.  Atrium Innovations (TSX: ATB) attempts to marry both schools of thought, combining modern scientific approaches and timeless natural elements with proven health benefits to create a family of supplements that are natural and believed to be effective and safe.  A healthy link between science and nature.

Industry Growth Trends are Strong

The dietary supplement industry is huge, and growing.  It is currently an $80 billion industry worldwide.  The medical establishment is also embracing and endorsing this movement.  Many of the new medical clinics have acupuncturists and chiropractors who can work in conjunction with your medical doctor in order to meet your medical needs.  And many of us have heard Dr. Oz (who has been made a trusted household name by Oprah) endorse natural health supplements on his show and talk about how we should treat food and supplements as medicine and use them for optimal health and for prevention.

Furthermore, we all know about the fact that the population is aging and how that helps any company involved in improving health, longevity, and quality of life.

Also, people are increasingly moving toward healthier living, and consumers are opening their pockets in pursuit of this quality of life.  There is a growing attention being paid to preventative healthcare, and the nutritional supplement industry is a direct beneficiary of that.

Competition

Usana Health Sciences (NYSE: USNA), with a $1.2 billion market capitalization, is a big competitor to Atrium.  Its stock has increased more than 90% in the last year, reflecting the growing “natural” supplement market.  Profitability metrics at Usana are very impressive, and products are sold through multilevel marketing.

I have more confidence in Atrium’s business model though, which takes advantage of a network of professionals in alternative medicine in order to sell its products.  They have a multi-level distribution strategy of branded products.  Many of their brands are promoted by healthcare practitioners, such as chiropractors, naturopaths, nutritionists, dieticians, and MDs.  Many are promoted in health food stores such as Whole Foods Market (NASDAQ: WFM) and Vitamin Shoppe.  Whole Foods’ stock has also soared off of very strong growth that the company has achieved in the last few years due to its focus on organic foods as well as natural dietary supplement products.  The stock has increased 56% in the last 2 years.  And a smaller percentage of brands are sold using direct to consumer marketing.

Bottom Line

This new health trend is something that investors should keep an eye on.  It does not appear that this trend is going away any time soon and there are companies benefitting big time from it.  These companies listed in this article are a good place to start learning about the dietary supplement industry and the possible investing opportunities related to it.

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Fool contributor Karen Thomas does not own shares of any of the companies mentioned at this time.  David Gardner owns shares of Whole Foods.  Tom Gardner owns shares of Whole Foods.  The Motley Fool owns shares of Whole Foods. 

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