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Straight Dope

In the largely unregulated herbal remedies market, ConsumerLab has found a niche as a watchdog

Tod Cooperman is not afraid of a fight. That's good, because the founder and CEO of ConsumerLab.com certainly seems to be spoiling for one.

Cooperman is something of a self-appointed sheriff in the world of herbal supplements and remedies--a fast-growing and largely unregulated industry wtih little reliable consumer information. While herbal products are subject to federal regulations governing health claims and ingredients, the Food & Drug Administration can barely keep up with the proliferation of brands on store shelves. That poses a potential risk to consumers, who spent nearly $15.6 billion on herbals in 1999. "There's a huge unmet need for information," says Cooperman.

His White Plains (N.Y.) company randomly selects leading brands of, say, gingko biloba or saw palmetto. The products are then sent to outside labs and checked for contaminants and whether the actual ingredients match what's listed on the label. Those that pass are listed on ConsumerLab's Web site. In exchange for a $22,000 fee from the manufacturer, they also can be marketed with ConsumerLab's seal of approval. Of the 300 products the company has tested since opening last year, about a third have failed, including several ginseng supplements found to contain pesticides. "ConsumerLab is doing a job that no one else is doing," says Jeffrey Asher of Consumer Reports, which has purchased Cooperman's data.

Many in the industry are less enthusiastic. "They're getting money, so they're going to pass as many as possible," gripes Todd Henderson of Baltimore-based Nutramax Laboratories Inc., which has passed ConsumerLab tests. The fact that Cooperman assisted ABC's 20/20 on a recent report on fraudulent supplements didn't help his popularity, either.

Cooperman, 37, is used to being an outsider. His last company, CareData Inc., evaluated customer satisfaction with managed-care providers. After selling that outfit in 1997, Cooperman turned his attention to herbals, another market with little or no consumer data. ConsumerLab now has six employees. Cooperman refuses to disclose revenues but says he's close to breaking even. "These manufacturers should be testing their products," he argues. Until they do, Cooperman plans to give the industry the medicine he thinks it needs.For more profiles of leading entrepreneurs, click Online Extras at frontier.businessweek.comBy Edward R. Silverman


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