The Industry Effects of COVID-19

Gyms are temporarily closing around the country. Warnings went out on all major news networks last week pushing people to stay away from gyms claiming they are breeding grounds for COVID-19. Even local government is forcing gym closures as we've seen in Pennsylvania. The Golds Gym I train at is desolate: usually packed when I train, now only 3-4 people. If this mass hysteria continues and pushes more gym closures, it will have a major impact on sports nutrition sales. No one training, no one purchasing. Brands heavy in that sector could have problems, brands that are diversified into the immune/health sector could fare better as sales lost in the sports nutrition category are made up by growth in the health category. We are going into overtime and second shift manufacturing to keep up with demand for our immune/health products. Ingredient supply is starting to tighten up from the prolonged closure of Chinese manufacturers, this is going to get worse. Brands who haven't planned for this will experience inventory shortages. On the other hand, brands who have stockpiled inventory to prepare for this, could get stuck with it for the reason stated above. This is uncharted territory for the entire country, we have no idea what tomorrow will bring, so it's going to be difficult to plan for it. We experienced this on a very limited basis during the Fukushima reactor break down in Japan, where we quickly adapted and threw all manufacturing at potassium iodide for radiation therapy. We controlled the worldwide supply for nearly 3 weeks during that disaster. It was total pandemonium running 3 shifts. We adapted similarly during SARMS/Swine Flu and others, as we will now. But those issues pale in comparison to the media-based frenzy that is driving mass hysteria with COVID-19. This is much more unpredictable. The President declared a Nationwide state of emergency today. Entire school districts are shutting down. There could be martial law and curfews in infected areas. We are reallocating assets to create redundant manufacturing and shipping facilities, so we are prepared. We are watching this very closely and while we are continuing with business as usual, we are also strategically planning on an almost hourly basis. Today, I put our facility under lock-down. Only existing staff is allowed in. My teams' health and safety is paramount, so we needed to create new protocols. For the first time in nearly 2 decades, the manufacturing facility will be closed for tours and visitors.