Taking charge

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Taking charge

By Bryan Salvage - 09/03/2016

Ongoing trends bode well for retailers offering private label vitamins and/or dietary supplements. Perhaps the most promising trend is the fact that the aging American population and younger millennials — both major vitamin and supplement customers — are more committed to improving their health in the face of rising health care costs and coverage uncertainties.

“Consumers are taking more responsibility for their own health and not relying on our fractured health care system in the U.S.,” says Scott Stobaugh, global sales manager for Redmond, Wash.-based Nutraceutix.

Other factors driving sales include a growing number of launches of unique, flavored and more palatable products, plus improved product accessibility through various distribution channels, relays “Vitamins and Dietary Supplements in the US,” a December 2015 report published by London-based Euromonitor International.

Probiotics, protein take hold

On the supplement side, probiotics and protein powders are becoming more popular with many consumers.

“Probiotics have seen double-digit growth for several years and will continue growing as science continually discovers additional health benefits for adding probiotics to your daily diet,” Stobaugh predicts. “Companies are able to develop their own private label brands and attract consumers to a broad variety of products at acceptable prices to the average budget.”

Plant proteins and whole-food-based products are of interest, adds Jane Drinkwalter, vice president of sales for Vitamer Labs and VitaCeutical Labs, which are divisions of Irvine, Calif.-based Nexgen Pharma Inc.

“Some consumers are expressing pill fatigue, and many want more products closer to nature,” she says. “They still want solutions to their health issues while sourcing clean products with as few ‘other ingredients’ as possible.”

Transparency is becoming more important on the supplement side with each passing year, Drinkwalter adds.

“Our customers want solid confirmation we are following current good manufacturing practices and third-party certification programs,” she adds. “They’re requesting more certified organic and non-genetically modified-organism products.”

Speaking of organic and non-GMO items, Drinkwalter advises against going “rock bottom” with store brand pricing.

“Price it competitively — but know this natural and organic shopper is not necessarily in ‘the race to the bottom’ of pricing. Quality is more important,” she says.

When it comes to vitamins, meanwhile, offering a private brand lineup requires a lot of shelf space and inventory dollars, says Bill Bishop, chief architect of Barrington, Ill.-based Brick Meets Click, which focuses on how consumer expectations are changing as in-store and online shopping experiences merge.

“Private label vitamins offer a good price/value to customers who are looking for that, and they will shop where they get it,” he notes. “It’s important for retailers to offer customers the opening price point on private label items, but they should only merchandise the fast-moving products in the store and provide the rest of the assortment online. This way they get the best of both worlds.”

Leverage trends

For continued success on the store brand side, Drinkwalter advises retailers to research and introduce new vitamins and supplements as quickly as possible.

“Many natural foods stores have less cumbersome new product introduction requirements with a shorter timeline and are able to get new products on their shelves at the beginning of the new product cycle,” she adds. “Consumers read and hear about new products via social media, the Internet, friends and family, and are anxious to see the newest products at their favorite stores as they learn about them.”

Retailers should also consider alternate product formats such as liquids or gummies, which are easier to swallow and digest, more palatable and available in various flavors. And to educate and engage consumers, retailers might want to provide several simple statements on a display stand explaining how their various store brand products differ from similar national brand products, Stobaugh suggests.

“For example, ‘Contains the same active ingredients as Brand X, but also has these added ingredients for additional health benefits,’” he says.

Package, market it right

Improved packaging boosts the visibility of own-brand vitamins and supplements in store. In its September 2015 “Vitamins, Minerals and Supplements US” report, global market research firm Mintel urges vitamin and supplement marketers to avoid a functional approach to vitamin packaging using round childproof medicine bottles with limited color schemes and displaying only the brand name and vitamin type. Instead, retailers should consider using bolder colors and imagery and employing a larger variety of packaging types and sizes to capture shoppers’ attention.

When it comes to the packaging materials, the choice largely depends on the product’s ingredients — and many vitamin and supplement ingredients require a barrier to ensure minimal exposure to heat and moisture.

“Most vitamins and supplements are packaged in standard high-density polyethylene plastic bottles and may often include cotton and a desiccant,” Stobaugh says.

On the marketing front, Stobaugh suggests that retailers focus on just one or two differentiators each time a product is on promotion.

“When [retailers] promote or feature the product again in the next month or quarter, they should focus on several different factors that provide added benefits to the consumer versus the national brand product,” he says.

And today’s smart consumers are looking for verified product information. They want to know about studies, sources and alternatives to more expensive products with side effects. Drinkwalter advises retailers to help educate these consumers about the products so they can make wise choices to fit their needs.

“Your manufacturer should be able to provide you with marketing material to fit your merchandising capabilities — shelf-talkers, signage, bullet points in flyers, information and links on your website,” she adds. “Ask your manufacturer for educational information, and put it on a blog from your dietitians or on your website. Your dietitians, pharmacists and their seminars are a great resource for your consumers.”

Euromonitor, meanwhile, recommends that retailers feature store brand products on an end cap or in an area dedicated to new product introductions. Since promotional activity draws consumers, offer promotions such as a buy-one-get-one-free event and percentage or dollar discounts on individual products, the market research firm advises.

Carry enough products to make an impact on the shelf, too, Drinkwalter urges.

“Merchandise [your store brand items] at eye level,” she adds. “Brand-block it so you get the most visual impact. Your store brand should be front and center where your consumer can see and choose it.”

Retailers also should try to make a personal connection with their consumers via store tours, e-mails with information geared to their needs, and in-store seminars, classes and product demos.

“The Internet cannot do that as well as you can,” Drinkwalter maintains.