Ounce Of Prevention
Vitamin and supplement sales gain vigor as consumers protect their most valued possession: their health.
There's good news and even better opportunity in store for the vitamins and supplements segment. Widespread concern over health-care costs and availability, plus continuing uncertainty on the economic front, appear to be encouraging consumers to find affordable solutions to improving and maintaining their health. What's more, the trend should be sustainable even with an improving economy, observers say.
Dollar sales of vitamins and supplements are up across the board for both store brands and the total category, with private label outpacing all total subcategories except the multiple vitamins subcategory, according to data from The Nielsen Co., New York, for the 52 weeks ending Aug. 7 (food, drug and mass merchandiser outlets, including Walmart).
Private label dollar sales within the total vitamin category (which includes vitamins, mineral supplements and nutritional supplements) rose 11.1 percent for the period, scoring a 0.8 percent increase in share to account for 26.5 percent of all category sales. The private label nutritional supplement subcategory saw dollar sales climb 9.4 percent, while the mineral supplement subcategory enjoyed a 5.1 percent dollar sales increase.
Many people without medical insurance or adequate medical care are "looking to find their own solutions for health conditions, and vitamins and supplements have long been an obvious choice for this goal, (so) sales have surged," says Peter Sokoloski, private label manager for Now Foods, a Bloomingdale, Ill.-based supplement manufacturer.
Another positive is the widening customer base, as the baby boomer population moves into senior age brackets, reports Packaged Facts. The Rockville, Md.-based consumer market research firm forecasts vitamin and supplement sales growth in the 7 percent to 8 percent range over the next five years, with higher growth rates toward the end of the period, reaching $13.2 billion in sales in 2014, according to its September report, "Nutritional Supplements in the U.S., 4th Edition."
Improvements in the industry, as well as changing consumer attitudes, bode well for the segment. Packaged Facts notes that consumers are becoming increasingly proactive about their health, choosing to avert health problems by a number of means, including taking vitamins and supplements. This reality, "along with the supplement industry's move toward more science-based claims and its other efforts to shore up its credibility, will help push nutritional products increasingly into the mainstream," the report states.
Kenn Israel, vice president of marketing for Robinson Pharma Inc., Santa Ana, Calif., a full-service dietary supplement manufacturer, agrees.
"People and companies have been hammered with increasing health-care costs, and nutritional supplements are a meaningful way people can take action and personal responsibility" for managing their health, he says. Consumers also have more confidence in the products, he adds, because they are finding an "increasingly wide availability of very compelling data" on the safety and efficacy of such products.
For example, fish oils rich in EPA and DHA, fatty acids found in fish, have been linked to beneficial effects on cognitive support and joint, heart and mood health.
On the store brand front, supplements have undergone huge quality improvements in recent years, notes Tim B. Greene, director of sales, branded and private label, for Sparta, Wis.-based Century Foods International, a division of Hormel Foods. The company develops and manufactures dairy and vegetable proteins and nutraceuticals, including some products formulated for muscle-building and weight-loss.
"Quite simply, consumers are moving more to value-oriented products," Greene says.
Do aim for clarity and simplicity in messaging on vitamin and supplement packaging.
Don't ignore opportunities to provide tailored solutions; consider adding vitamin K, resveratrol, probiotics and other products of growing interest to consumers.
Tailor the product
Consumers desire solutions tailored to their specific health concerns and substantiated by human clinical research, and on the basis of ongoing research, Israel foresees significant growth in vitamin K, the fruit compound resveratrol and probiotics — the beneficial bacteria that promote immune health and digestive wellness.
In fact, Israel predicts that compelling data on vitamin K's beneficial effects on the immune system, bone health and mass, and cardiovascular health will make it "the next vitamin D." And resveratrol, found in peanuts and red wine grapes, is intriguing because of its association with the "French paradox" — relatively low levels of heart disease and cancer in a population in which high-fat diets and smoking are not uncommon. As for probiotics, clinical research exploring the bacteria's effects on allergies, mood, energy levels, weight loss and inflammatory joint and cardiovascular conditions also is quite promising, Israel reports.
When it comes to the store brand product mix, Sokoloski advises hitting the main categories — multivitamins, omega-3s, probiotics and antioxidants — but cautions against offering anything "too exotic" that would not be of interest to a large-enough base of consumers.
Delivery formats are another important consideration, says Dannielle Heinrichs, product manager for private labels at Mooresville, N.C.-based BestSweet Inc., which manufactures chocolate and caramel-flavored calcium soft chews for women and urinary tract-health-promoting cranberry soft chews for Walmart's Spring Valley brand. The company also is in the process of reformulating its cranberry chew for prostate health.
"There's no one delivery format that works for every consumer," she explains. "Some prefer the convenience of popping a pill and not tasting it; some prefer [a candyflavored] treat. For some, liquids don't taste good, or they remind them of the cough syrup they had to take in childhood."
Make sense of it all
To avoid turning the supplement section into an intimidating wall of confusion, organize products and information in the way the customer is thinking, Israel advises. He points to Walgreens and Vitamin Shoppe as examples of retailers that merchandise supplements well.
"Vitamin Shoppe has a very functional approach," he says. "Their product organization is intuitive; their packaging is information-dense. And this is complemented by the availability of literature and web-based information in the retail space that consumers can use to educate themselves."
Israel also likes wellness marketer Aisle 7, which provides peer-reviewed, unbiased summaries of health and nutrition data though computer kiosks that access their web-based solutions.
"The next step is using smart phones and pulling [or pushing] information to the consumer while they are in the aisle," he says. "Take a picture of a barcode and get a review of the science, information on the supply chain and origins — even a coupon. This is all achievable today, and tools like this will empower the customer."
Consumers look for solutions to their health issues, not for ingredient lists, Israel explains.
"The retailer is a solution provider and educator. If we make the customer aware of a new tool or better tool to address their specific concern, we will earn their loyalty and goodwill," he says.
Heinrichs also cautions against creating confusion in packaging by stating very clearly what the product is and what it is for.
Clarity and simplicity are vital, adds Gary Pigott, vice president of sales and marketing for Miami Lakes, Fla.-based Mason Vitamins. For example, the packaging on Mason's valerian root product clearly states "for restful sleep."
Create confidence
In the vitamins and supplements segment, it is crucial that store brand packaging look professional, be merchandised in a premium location and serve as the focal point of the vitamin section, Sokoloski says.
End caps "are amazing" in terms of merchandising, Heinrichs adds.
"Give your brand the consideration it needs," she says. "Put your brand first."
Secondary displays such as shippers and PDQs inform customers that those products are available in the store, Greene notes. In a grocery format offering thousands of SKUs, locating specific products can be like finding a needle in a haystack, he cautions.
Pigott recommends that retailers get input from all the segment's vendors to arrive at sound decisions on planograms.
"Ask them all to critique the planogram before it goes out," he advises. "You want sound advice. One person doesn't know it all."
Store associates also need to know that the store brand assortment is the "go-to" product line for their shoppers, Sokoloski adds. To build confidence in store brand products, store management needs to communicate to the salespeople the quality and expertise in formulation the brand possesses.
And don't overlook the importance of right-pricing in building store brand sales. Retailers should not raise the everyday price only to offer a large quarterly promotion, Heinrichs says — consumers are relying on store brands to be priced 25 to 30 percent less than the national brands.
"If you can promote on top of that — show the consumer added value, like a bonus offering of 10 to 20 percent more product — it's a shoo-in," she says.
Even a very minor price reduction can sway consumers to store brand supplements, Heinrichs adds.
Do solicit input from all your vendors so you can make a sound decision in relation to planograms.
Don't forget to communicate the beneficial attributes of store brand vitamins and supplements to store associates.
Resveratrol is intriguing because of its association with the 'French paradox' — relatively low levels of heart disease and cancer in a population in which high-fat diets and smoking are not uncommon.
Store management needs to communicate to the salespeople the quality and expertise in formulation the brand possesses.
Supplement Regs: What You Need To Know
In the United States, the FDA has regulatory responsibility for dietary supplements (including vitamins, minerals, herbs or other botanicals, amino acids, and substances such as enzymes, organ tissues, glandulars, and metabolites). But the agency regulates dietary supplements under a different set of regulations than those covering "conventional" foods and drugs (prescription and over-the-counter).
Under the Dietary Supplement Health and Education Act of 1994 (DSHEA), dietary supplement manufacturers (and brand owners) are responsible for ensuring a dietary supplement is safe before it is marketed, FDA explains. In turn, the agency is responsible for taking action against any unsafe dietary supplement product after it reaches the market.
Manufacturers (and brand owners) must make sure product label information is truthful and not misleading. FDA notes that its post-marketing responsibilities include monitoring safety (e.g., voluntary dietary supplement adverse event reporting) and product information (e.g., labeling, claims, package inserts and accompanying literature).
Still, some believe oversight is still inadequate. On May 25, Sens. Orrin Hatch (R-Utah) and Tom Harkin (D-Iowa) introduced the Dietary Supplement Full Implementation and Enforcement Act of 2010, legislation the senators believe would help FDA protect consumers from unsafe dietary supplements and boost FDA accountability. (In 1994, Hatch and Harkin introduced DSHEA, which changed the way that supplements are sold in the United States.)
The Dietary Supplement Full Implementation and Enforcement Act of 2010 seeks to provide FDA with additional resources, the senators said. The bill directs FDA to inspect facilities to ensure compliance with the new dietary supplement good manufacturing practice regulations; to use the authority under DSHEA to protect the public from unsafe dietary supplements; and to ensure claims made for dietary supplements are truthful, non-misleading and substantiated.
The Federal Trade Commission (FTC), meanwhile, regulates advertising of dietary supplements in national or regional newspapers and magazines; in radio and TV commercials, including infomercials; through direct mail to consumers; or on the Internet, FDA notes. The FTC requires all information about supplements to be truthful and not misleading.
