More consumers, especially Baby Boomers, are looking to supermarkets to fill their vitamin and energy supplement needs.
Back in the day children were told, “Take your vitamins so you can grow up big and strong.” Many of those children are aging adults now and are looking to vitamins, minerals and supplements to help them stay healthy and to feel young and energetic. Consumers are also seeking out lower-cost alternatives to doctor visits. This has created an estimated $12 billion market for these products, a 28% increase from 2006 sales figures, according to a December 2011 report released by the Chicago-based research firm Mintel.
For supermarkets the news is even better. Despite traditionally lagging in HBC sales, Mintel reports that from 2009 to 2011 supermarkets enjoyed the strongest category dollar growth among all retail channels at 10%. While the uptick in sales dollars sales is encouraging, it is estimated that supermarkets still only account for 6.4% of sales in the category versus 9.9% at drug and 83.9% at other retailers.
However some industry observers say that with just a few minor changes grocers can mount an even greater challenge. Gary Pigott, senior vice president of sales and marketing for Miami Lakes, Fla.-based Mason Vitamins, says grocers need to convince the consumer that their vitamin section is a complete destination.
“[Grocery needs to] take back control of the planogram and reduce redundancies and duplications within three or four brands,” he says. “To commit shelf space exclusively to any vendor has stifled innovative products from smaller vendors who do not have the deep pockets. Many regional retailers have figured that out and have overcome those challenges.”
Like nearly every other category in the store, innovative products stimulate sales. Mason Vitamins recently introduced a highly concentrated Cranberry with Probiotic, which is designed to help maintain a healthy urinary tract and support immune and intestinal health, and Megavite Fruits and Veggies, a high potency multivitamin and mineral formula, rich with organic fruits and vegetables including kale, pumpkin, and more.
Vitamins by the letters
As consumers look to live healthier lifestyles manufacturers have changed their thinking and focus as well. Pigott says that for many years manufacturers chased after the dollars with product designed for the joint category, neglecting the maintenance vitamins—the letters. “Over the last couple of years I have noticed more of our competitors extending their range of SKUs in letters,” he says.
Other factors leading to renewed interest include emerging science that continues to shows the benefits of vitamins and minerals, new packaging and different delivery forms, and media and health care professionals educating consumers on the options available to them.
“For health care professionals to recommend adults consider a B complex/B12 supplement instead of an energy drink is pretty powerful for our category,” says Pigott.
That is not to say that energy drinks and supplements do not have a place. Though most vitamins and minerals are geared toward older consumers, there is an increasing demand for energy products in the college and young adult segment. Observers say products that provide convenience and portability are selling particularly well.
“Today’s consumer is looking for immediate gratification and assistance in securing more energy,” says Andy Settler, senior vice president, sales for Sheets Brand Energy Strips a product of Pure Brands, based in Boca Raton, Fla. “Sheets Brand Energy Strips are the most portable and efficacious energy product in the marketplace.”
Sheets Energy Strips, which Settler says dissolve on the tongue in seconds, were launched with two flavors, Berry Blast and Cinnamon Rush. In January Mint Boost was added. Each flavor is available in two sizes, a 4-count sleeve and a 10-count box. Settler says that drug and C-store channels are performing well, primarily because those outlets have utilized checkout as the primary way to sell the product. He says that grocers that follow suit can enjoy solid sales as well, especially with female shoppers.
“The grocery channel is still dominated by the female consumer and their demand for energy products has increased dramatically,” says Settler.
To help sales, Sheets has recently launched a $10 million marketing campaign across TV, radio and movie theaters as well as distributing samples every day. “Our marketing campaign is geared toward the products’ attributes: convenience and portability,” says Settler.
Grocery is also an important class of trade for 5-Hour Energy, which is manufactured by Living Essentials, based in Farmington Hills, Mich. According to Elaine Lutz, 5-Hour Energy spokesperson, grocery sales for the energy product have increased.
First introduced in berry flavor in 2004, the Original 5-Hour Energy product line has expanded and now includes lemon-lime, orange, grape and pomegranate. There is also a citrus decaffeinated version and berry and grape options in the Extra-Strength variety.
Lutz says that 5-Hour Energy has the same amount of caffeine as a cup of coffee, and contains no sugar or herbal stimulants, with key ingredients that are found in everyday foods such as broccoli, avocados, bananas and apples.
“5-hour Energy is a great example of innovation impacting the category,” says Lutz. “Its unique size, efficacy and marketing campaigns have made it the largest selling supplement brand in the country. Its proprietary blend of amino acids, nutrients and caffeine that, together with B-vitamins, provides a boost in energy and a feeling of alertness without a sudden drop in energy later.”
Lutz agrees that for grocery, checkout seems to be the best location to merchandise 5-Hour Energy. She adds that some retailers have had success placing 5-Hour Energy in other areas of the store.
“We have also rolled out new racks, stand-alone displays and shippers for grocery and larger stores,” says Lutz.
Also capitalizing on the energy craze is LiveWire Ergogenics with its LiveWire Energy Chews. According to officials for the Anaheim, Calif.-based company, LiveWire Energy Chews are soft “energy” chew packed with both B vitamins and up to 120 mg of time-released caffeine.
LiveWire has recently expanded its portfolio with flavors: Cinnamon Fiore, Sour Apple and Dark Roast Coffee. They join the original four flavors: Mint Chocolate, Chocolate, Pomaberry and Citrus Mango.
“The energy products category is estimated to grow to more than $19.7 billion by 2013,” says Bill Hodson, CEO. “Within that sector, there is an evolution taking place. Consumers that embraced energy drinks and supplements are looking for an energy boost that is more convenient and less expensive.”