Vitamins Report: Immunity in focus
Prevention is less expensive than treatment. As the COVID-19 pandemic wears on, consumers continue to ramp up their search for vitamins, minerals and supplements that provide high quality at a value. Immune support, gut health and sleep were among the most in-demand products at the start of the coronavirus crisis, and are still being sought today.
The result is that more and more retailers are making sure their VMS aisles feature budget-friendly private label versions of the latest innovations.
According to IRI, a Chicago-based market research firm, for the 52 weeks ended Aug. 9, sales of vitamins in total U.S. multi-outlet (grocery, drug, mass market, military, select club and dollar retailers) totaled more than $8.59 billion, an increase of 13.6% compared with the same period the previous year. National brands accounted for 74.6% of sales, or $6.41 billion, and private label totaled more than $2.17 billion, a 25.4% share.
Private label had a slightly higher share of the mineral supplements segment, with 30.8% of sales. Sales of mineral supplements totaled nearly $4.07 billion, an increase of 7.0%. National brands accounted for $2.8 billion, and private label accounted more than $1.25 billion.
Even though it lost some share to national brands, the private label VMS category is strong, according to manufacturers. Retailers that capitalize on the latest trends have opportunities to grow their brands.
“There is tremendous interest in the private label space with significant growth within the immune category as well as vitamins and minerals,” said Tammy Johnson, vice president of sales and marketing for the human division at Food-Science. “Products that include ingredients like vitamin D, vitamin C and zinc are in high demand.” Also, stress and sleep items are seeing growth during the pandemic.
Williston, Vt.-based FoodScience recently launched a Zinc Lozenge with Elderberry and Vitamin D3, which the company said delivers immune boosters to the tissues that need it most. Earlier this year the company launched Amyloid Benefits capsules, which are meant to help slow the aging process and counteract the stressors that damage the brain. Johnson added that consumers are interested in a variety of delivery systems, including capsules, tablets, chewables and liquids.
Others agreed that the COVID-19 pandemic is making consumers prioritize their wellness, and retailers need to make sure they are offering the right products. “Private label supplements are currently experiencing explosive growth,” said Brianne Vaskovardzic, director of marketing for the private brand manufacturer Norax Supplements, based in Newnan, Ga. “As demand for immunity support products has increased significantly, clear category winners are liposomal vitamin C, elderberry, zinc and multivitamin formulations.”
Vaskovardzic pointed to limited healthcare as a strong driver for the nutraceutical industry, especially in private label. “Today’s environment is creating a need for private label supplement brands to provide high-quality products to the end user, while also providing a product that is accessible and affordable.”
At Secaucus, N.J.-based retailer The Vitamin Shoppe, the private brands portfolio is steadily growing and is a key area of growth for the company, according to CEO Sharon Leite. “Our customers look to our private brands for quality and innovation across vitamin, supplement, sports nutrition and wellness categories,” she said.
More consumers are taking a proactive approach to wellness, Leite said, and they are researching the ingredients and quality of supplement formulas. Earlier this year, The Vitamin Shoppe launched the Vthrive brand of premium vitamins, minerals, supplements and essential oils. The brand is free of artificial colors, flavors, or sweeteners, and products contain no magnesium stearate, stearic acid, or titanium dioxide. The 14 essential oils are made from 100% pure, USDA-certified organic oils.
Consumers also expect their vitamins, minerals and supplements to be safe, and officials at The Vitamin Shoppe said each of their products are put through 320 rigorous quality assurance steps, and ingredient purity and potency is verified by independent, third-party labs. Leite said the new line is for knowledgeable consumers seeking clean formulas with the highest quality ingredients.
Demand for immune health was trending even before the COVID-19 outbreak, according to John Quilter, vice president and general manager for Kerry Group. “It was a growing concern for consumers across the world,” he said. In fact, the company conducted a study of consumers in 14 countries. Among the findings: 34% of respondents said they would be interested in purchasing a supplement if it supported the immune system.
Kerry, which is based in Ireland and has U.S. operations based in St. Paul, Minn., makes GanedenBC30, a patented probiotic that has been well received by consumers. Also, according to the company’s survey, more than half (51%) of global consumers said the product promotes good digestive health, while 45% said it offers immune support. That creates opportunities, Quilter said. “Simply adding appropriate levels of GanedenBC30 to your private label products allows you to say that it supports digestive and immune health.”
New from Kerry is Wellmune, a proprietary baker’s yeast beta glucan that the company said interacts with the body’s natural defenses, supporting the immune system without overstimulating it. “Wellmune is backed by more than a dozen clinical studies, which is obviously important at a time of huge consumer demand for proven immune health support,” Quilter said.
In immune support and in other VMS segments, consumers look for evidence of the efficacy of products. Demand for scientific substantiation is the most important trend across all supplement categories, Quilter said, noting that the Kerry survey also found that 39% of consumers said seeing claims based on research or scientific data would make them more likely to buy a healthy lifestyle product.
These benefits should be communicated on the packaging. Retailers can leverage this demand for truth and transparency to drive private label sales. “The reputation of private label has massively improved in recent years, mainly because of manufacturers doing more to focus on quality,” Quilter said. “Now retailers can confidently say that private label products work as well as nationally branded equivalents.”
The VMS category continues to expand. According to a 2019 statement from the U.S. Food and Drug Administration (FDA), over the previous 25 years the $4 billion industry comprised of about 4,000 products grew into an industry worth more than $40 billion, with more than 50,000 products.
With growth comes certain challenges. “A lot of the growth right now is from inline sales,” said John Atwater, senior director of the verification program at Rockville, Md.-based U.S. Pharmacopeia. “Consumers really need to take precautions to make sure what they are ordering is a quality product.”
Safety and efficacy are as important in private label products as in national brand products. USP, which develops quality standards for medicines, dietary supplements, and food ingredients, offers verification services. “The retailers are concerned,” Atwater said. “They have a high regard for a focus on quality.”
Consumers see the USP Verified Mark on national brand vitamins, minerals and supplements, and expect store brand products to carry the seal, too. Some chains have been participating for years, Atwater said. “It does highlight the fact their products are high quality,” he said. “It also helps with risk management.”
While third-party testing is crucial, subjective tests are valuable, too. Deerfield, Ill.-based Walgreens has its own brands, including Finest Nutrition Free & Pure Gummy Vitamins, tested by a third party to help ensure the active ingredients have the same strength and effectiveness as the national brands. Earlier this year, the retailer noted on its website that it has an in-house test kitchen where employees are encouraged to sample the chain’s private label products, including gummy vitamins and supplements. While they do not taste all products — melatonin would be an impractical choice for the workday — employees do note whether size, shape, gloss and sheen are comparable to leading brands on the market. They also try other items, including snacks and beauty products.
Making sure their own gummies are comparable to national brands is just one indication that retailers are boosting their own VMS assortments. “I think most large retailers are trying to increase overall private label penetration,” said Chuck Tacl, vice president of sales and business development for Miami Lakes, Fla.-based Mason Vitamins. “Everybody is doing that in different ways, whether advertising, expanding assortment, or merchandising in other departments and other categories. That’s an area a lot of retailers are looking at.”
Instead of displaying vitamins, minerals and supplements in one aisle, innovative retailers are merchandising the products in other areas of the store, such as in beauty, sleep, and eye and ear care. Even retailers that had previously kept their VMS assortments limited are now identifying gaps and expanding their sets, which can help generate sales and build consumer loyalty. “They have done a good job of expanding, and now the shopper is not walking to another store to find that item,” Tacl said.
He added that during the pandemic, some private label manufacturers dropped out of the VMS business. “We benefited because we have the capacity,” he said. “That has helped our business.”
Another detail that can help private label VMS sales is that consumers are looking at price. Also according to IRI, private label vitamins averaged $8.16 per unit, compared to $12.07 for national brands. Both of these were increases, of $0.27 for private label and $0.20 for national brands, compared to the same period the previous year.