Health brings wealth

If prevention is the best medicine, then taking vitamins and supplements is a daily habit worth keeping. And todays vitamins and supplements are evolving past the basic formulas and product forms.

Ease of use and new product claims are changing the landscape of the category to meet the demands of a proactive consumer set. Future growth will be centered on new product formulations that incorporate innovative ingredients and high-end packaging that also promotes safety.

Staying strong
The Great Recession and subsequent economic downturn were rough on many product categories. Vitamins and supplements, however, pulled through largely unscathed.

According to a December 2013 report from global market research firm Mintel titled "Vitamins, Minerals and Supplements – U.S.," sales fared well and continue to climb. The general consensus among consumers Mintel surveyed was that the benefits to their well-being were worth the products cost.

Consumers could have even more products to choose from in the near future as many new trends continue to come forward.

"Innovative ingredients will continue to be a leading trend for all supplement and vitamin categories," says Brianne Vaskovardzic, director of marketing for Private Label Nutraceuticals, Norcross, Ga. "Such ingredients include Yacon Root for weight management or Phytoceramides for anti-aging/skin health."

Other ingredients that are up and coming include Garcinia Cambogia and green coffee bean extract, according to Patrick Sattley, director of private labeling for Matsun Nutrition, Murrieta, Calif.

And as consumers become more aware of product ingredients and origins, Vaskovardzic says, the natural and organic segment should also see strong growth.

Do
Pay attention to innovative and new ingredients to keep store brand vitamins and supplements on-trend.

Don't
Ignore the importance of convenient product formats for consumers on the go.

"Specialized categories such as sports nutrition will grow increasingly more mainstream," she adds, "as the move to target recreation weekend athletes rather than the traditional bodybuilder audience [continues]."

Packaging prowess
As health and fitness assume a more commanding role within vitamin and supplement formulations, packaging will follow suit.

"Products will be designed to be more convenient for consumers on the go," Vaskovardzic explains, "especially those in niche recreational categories such as running, biking, yoga or dance."

With packaging processes such as that required for heat shrink sleeves becoming more standard, packaging will play a larger role in overall product quality. Heat shrink sleeves, fashioned with the proper equipment, not only fully seal to protect the bottle, Sattley says, but also provide more space for labeling and promotion.

The growth in popularity of sustainable packaging will raise the profile of environmentally conscious companies, according to Vaskovardzic. But the value of the overall packaging design cannot be underemphasized.

"High-end, custom or unique packaging will also see a growing presence within nutritional products," she explains, "as this promotes quality, and, in turn, product safety."

The right mix
Private labels command of the overall vitamin and supplement category is most visible within the mineral supplement and one- and two-letter vitamin subcategories. They capture slightly more than 36 percent and 40 percent of subcategory dollar share, respectively – more than any other subcategories (see the table, p. 72). Together with multivitamins, these subcategories prove that store brands are no slouches when it comes to performance.

"It is best to have an efficient and effective product mix that includes both top-trending products, as well as core category products," Vaskovardzic advises. "Because fad products tend to have shorter sales cycles, it is important to bring these to market quickly; however, these products tend to have a larger markup and profit potential due to the innovation factor."But to find the greatest long-term success, retailers will need to look not only at these cornerstone segments, but also at the big picture to make sure they are offering the right blend of current and potential future category winners.

Multivitamins remain an important part of a retailers store brand vitamin and supplement offerings because of their overall appeal to a broad range of demographics, Sattley offers.

However, some demographics have been underserved, especially by private label supplements.

According to Harold Baum, managing director for Dynatabs LLC, New York, some 40 percent of the population cannot swallow pills. His company manufactures oral edible strips that are formulated in a variety of tropical and traditional flavors that dissolve quickly on the tongue without the need for water.

"The rapid delivery of nutritional components," he says, "from a product small enough to fit in your pocket or purse offers convenient transportability of a supplement that has never been available before, maintaining nutritional compliance."

Vaskovardzic also sees the value in unique product formats for retailers.

"Creating an alternative product form of a traditional nutraceutical or cosmeceutical will be a strong marketing point for distributors and retailers," she adds.

Keep it simple
When it comes to promoting store brand vitamins and supplements, communication is key, beginning with the language on a products packaging.

"People are bombarded with lengthy, hyped, verbose packaging," Baum explains, "[but] they have little time to read, [much] less at a store, as it is not a library."

Simple and clear language should quickly communicate the products benefits and not sell hype or false promises, he adds.

Social media also can be an effective communication tool and should be used to a retailers advantage.

"Creating social support tools for users of the product is a unique method to promote quality," Vaskovardzic says, "[and] provide answers in order to build trust with the consumer and build brand loyalty."

Effective communication with their suppliers can benefit retailers, too.

"Before extending a product offering, it is crucial to investigate the market and make sure that there is a demand," Sattley advises. "We often tell our customers what products sell best and where others have seen success."

Do
Consider new product formats that address the needs of consumers who have difficulty swallowing pills.

Dont
Invest in new product development without investigating the market to determine the level of demand.

Healthy and wealthy
Looking ahead, private label vitamins and supplements can continue to see growth in the near future as consumers seek cost-effective alternatives to traditional health care.

"Store brands will be an entry product for consumers seeking vitamins and supplements," Vaskovardzic says. "But in order to keep customers loyal, store brands must continue to compete with online retailers."

Retailers also will see supplier competition coming from different regions across the globe, but they might want to approach with caution.

"A lot of businesses internationally are getting into supplement private labeling due to increased demand of supplementation in developing nations," Sattley says. "In the U.S., we have high standards and regulations that allow us to manufacture safe and effective products."