More consumers are turning to nutritional supplements to assist with their health care needs.
By Craig Levitt
How can Americans put a cap on rising out-of-pocket health care costs? One answer is by practicing preventative care. Industry experts say a balanced regiment of nutritional supplements can help ward off serious health problems such as heart disease and stroke or simply aid in avoiding a nasty case of the sniffles.
Those associated with nutritional supplements have been championing their use for years as way for people to stay healthy and consumers are now, even in times of economic unrest, flocking to retailers in search of the right pill, powder or liquid to help them do so.
“Part of the resiliency of nutritional supplements during this trying economic period stems from the fact that Americans are losing confidence in their ability to pay for healthcare, even as the economy shows signs of turning around,” says Don Montuori, publisher for the Rockville, Md.-based research firm Packaged Facts, which recently released the Nutritional Supplements in the U.S. 4th edition report. “Compared to doctor visits, hospital stays and prescription drugs, nutritional supplements can be a bargain.”
It also helps that nutritional supplements appeal to all ages, genders and socio-economic demographics. According to the Chicago-based SymphonyIRI Group, the category has enjoyed constant growth since 2006. For the 52 weeks ended Nov. 28, dollar sales at food, drug and mass retailers (excluding Walmart) are up nearly 8.0%, accounting for more than $3.2 billion.
Supercenters and mass retailers are the dominant channel, with an estimated one-third of all nutritional supplement sales, followed closely by natural and specialty stores at around 31%. Drug stores and grocery stores account for 19% and 10% respectively. However many industry observers say that grocers are poised to garner more sales.
“Grocers have fared better than previous years and they have the best opportunity to gain market share,” says Gary Pigott, senior vice president of sales and marketing for Miami Lakes, Fla.-based Mason Vitamins. He says that many grocers are retooling their mix and simplifying the shopping experience. “Instead of waiting 12 months [before reviewing their mix], many have gone to every six months,” he says.
He also says that over the past 16 months the category has become extremely important to grocers and he has noticed more focus and support from upper management.
That focus is much needed, too. As nutritional supplements become more main stream, there continues to be a plethora of new products available to consumers designed to aid in maintaining their health. According to the Packaged Facts report, in 2009 supplement makers launched 757 new vitamin and mineral lines consisting of more than 1,600 SKUs, increases of 13% and 7% respectively over the previous year. Through mid-August 2010, an additional 572 SKUs appeared on retailer shelves.
“New product innovation is critical,” says Robert Lewis, vice president of sales for Life Science Nutritionals, based in Burlington, Ontario, Canada. “People are consistently being exposed to more and more health information and as a result they have become rabid health-conscious consumers, always looking for the next best answer in health management.”
Getting adults to take their vitamins
Lewis says Life Science has seen a tremendous amount of growth with its children’s gummy vitamins and in 2011 they will be launching a complete line of adult gummy vitamins that will be supported by a large-scale national advertising campaign as well as an integrated on-line social media campaign.
An area that has benefited the category are these ongoing awareness campaigns, obviously by manufacturers, but also—and perhaps more importantly—by the many media outlets and health care professionals extolling the virtues of nutritional supplements. That said, because of the sheer amount of product available, there is still a need to educate consumers on what best suits their needs.
“There is always a need to educate consumers more,” says Steve Swenson, senior director of marketing for Cromwell, Conn.-based Amerifit Brands. The company makes AZO, which is designed to aid in the prevention and treatment of urinary tract pain and discomfort, the detection of urinary tract infections, the prevention and treatment of yeast infections and provide relief from feminine itch; Estroven, which addresses the symptoms of menopause; and Culturelle, a probiotic supplement that is designed to restore the balance of good bacteria in the digestive tract, boosts digestive health and supports the immune system. “Especially with vitamins and supplements, people are aware of OTC drug products but aren’t always aware of the alternative natural products.”
Swenson says Amerifit provides retailers, particularly for use in the pharmacy section, with display information and educational materials. In addition to the previously mentioned brands, he says Amerifit is also launching Brainstrong, a line of brain health products in March.
Rich Vitamins has raised the ante when it comes to consumer education. The New York-based company is the maker of alternaVites, a specially formulated multi-vitamin for those who experience difficulty swallowing pills, or for those looking for an easier way to take supplements. Rich Vitamins provides free samples of alternaVites, a powdery supplement that is ingested by pouring the single-serve packet on the tongue, to retailers to offer its shoppers.
“With our product consumers can actually try it and see if they like it or not,” says Hallie Rich, president and founder. “That is kind of how the protein bar category grew. A lot of stores have used the sampling program as way to get customers to switch over to our product and it has been very successful for us.”
Because alternaVites is a multi-vitamin product, to ensure it is distributed only to adults 18 and older, samples are either kept behind the pharmacy counter or the courtesy desk. Rich says signage within the aisles directs shoppers to ask for their free samples.
Though alternaVites has been available in health food stores for some time, Rich says they are now making the push towards food, drug and mass outlets. So far she says grocers have shown a lot of interest and she expects significant growth this year.
“As far as consumers are concerned, we have had fabulous feedback,” she says. “What has been most surprising is that not only are people who can’t swallow pills taking alternaVites, but so are people that can. Retailers are telling us that their customers are more compliant, so they are buying it more often yet it is not cannibalizing sales because the people buying weren’t buying other product often enough, so this could be considered additional dollar sales.”
Currently alternaVites is available in one formulation, to provide adults with multi-vitamins and minerals, but Rich says there are other opportunities that may be debuted later in 2011, including prenatal and children’s. “We want to make sure that our marketing matches our science,” says Rich. “We don’t want to just have good marketing; we want to make sure the product actually benefits those who take it properly.”
Grocery has also been one of the higher growth channels for 5-Hour Energy, which is made by Living Essentials, according to Carl Sperber, communications director for the Farmington Hills, Mich.-based company. Sperber says that for the six years it has been in existence, 5-Hour Energy has primarily been a drug and convenience store product, but over the past year they have expanded into other markets, including grocery.
The introduction of multi-pack has helped facilitate acceptance in the grocery channel, as has the better positioning 5-Hour Energy has received, such as space at checkout. Sperber says those factors have led to 115% growth in the grocery channel in the last year. He adds that retailers also have the opportunity to merchandise 5-Hour Energy in several different areas of the store.
“Where we are and who we compete against depends on the store,” says Sperber. “Being a dietary supplement we don’t get merchandised in the beverage area very much, but we do get placed in the grocery aisle next to the energy drinks. We are in the pharmacy and we have some incremental space in the main aisle.”
The 5-Hour Energy product line now consists of seven flavors, five in the original formula, an extra strength version and a decaffeinated version. Packaging consists of the most popular single-serve, 2-, 4-, 6- and 12-packs as well as a 24-pack for club stores. Additionally, Sperber says that consumer advertising support is being increased.