Consumers are incorporating various vitamins and supplements into their daily routine. Now is the time for retailers to capitalize on this lucrative industry.
Health and diet are two of the most popular topics among consumers’ daily conversation. So it is no surprise that the vitamin, minerals and supplements (VMS) category is responsible for $30 billion in annual sales. More importantly for food retailers, recent research suggests that some of the highest sales growth in this category is now occurring in conventional channels.
“The American public is being inspired to take control of one’s own health through programs like Michelle Obama’s Let’s Move campaign, and the popular television series, The Biggest Loser,” says Doug Jones, corporate communications manager for Northridge, Calif.-based Pharmavite. “It’s about helping people realize that obesity is one this country’s top health concerns, and there are so many consequences of poor diet and lack of exercise that can lead to unpleasant and expensive outcomes.”
The purpose of President Obama’s Affordable Care Act is to help bring down the cost of healthcare in the U.S. A family of four would save as much as $2,300 on their premiums in 2014 compared to what they would have paid without reform. However, until this is fully implemented, that same family of four is estimated to spend $20,728 annually on healthcare costs.
The concerns with rising healthcare costs are motivating consumers to use supplements in an effort to ward off health issues, say industry observers. The expanded availability of products addressing condition-specific health issues such as calcium and vitamin D for bone health, Omega 3 for heart health and brain function among others, have made vitamins the largest HBC category in dollar sales for supermarkets, say observers. They add that trends toward prevention, self-care and holistic approaches to wellness continue to be major drivers for VMS purchases.
In a recent survey, the Council for Responsible Nutrition estimated that 68% of adults take nutritional or dietary supplements. Observers say that for food and drug retailers, dietary supplements represent an opportunity to generate substantial incremental sales while also gaining the allegiance of these highly valued shoppers. The VMS shopper is a uniquely information-hungry consumer who strongly responds to in-store communication strategies, observers add.
Prevention is not the only driving force behind vitamin purchases; there are nutritional needs, particularly for children. “A lot of children do not get their daily nutritional needs in foods today, and moms are always seeking tasty alternatives,” says Claire Polson, national sales and marketing manager for Hero Nutritionals. “Our Yummi Bears Wholefoods brand offers a delicious and fun way for moms to sneak the needed veggie and fruit nutrients into a child’s diet.”
The aging Baby Boomer generation is the second biggest force behind this exploding category. “Baby Boomers are seeking longevity and ailment solutions,” Polson adds. Specifically, those that will not interfere with preexisting conditions—Diabetes, for example. Hero Nutritionals, based in San Clemente, Calif., is the maker of the Slice of Life diabetic-friendly multivitamin, made without any artificial sweeteners, and contains cinnamon, which has been shown to aid in the regulation of blood sugar.
Additionally, each year record numbers of Baby Boomers turn 65, making them eligible for retirement, Medicare and Social Security benefits. Based on population rates, this is expected to continue until 2029. This aging Baby Boomer population is embracing supplement use in an effort to maintain joint and heart health and overall vitality and longevity, say observers.
Delivery forms are the category’s hottest trend, with gummies driving category growth, say observers. “Now that people are taking a more active role in their own healthcare, they’re evaluating supplements and minerals and they’re starting to reject the standard forms. The large horse pills, for example,” says Tony Sommer, senior director of sales, customer marketing and operations for the Marietta, Ga.-based Meda Consumer Healthcare.
Efficacy and quality are becoming just as important to consumers as the supplement itself. “Today’s consumers demand innovation in form and function and we are actively engaged in finding the right innovation for our Feosol and Geritol brands” adds Sommer.
VMS consumers are committed to quality, and are willing to pay for it, say observers. Natural and organic products are hugely popular with the category’s base. Efficacy, quality, concentration and absorption are all important factors to the consumer in their selection of the right products for themselves and their family.
Studies on absorption have led many VMS manufacturers to seek other alternative delivery forms such as burst-lets, effervescents, melting tablets and liquids.
PharmaCare US is already working on innovations that are designed to counter gummy-fatigue. Their Kids Smart line of fish oils uses a pharmaceutically microencapsulated burst-let to eliminate the fish taste and smell. “It is up to 13 more times efficacious than gummies on the shelf,” says Kimberly Weld, vice president of the San Diego-based company. “Our goal is to have unique technology driven products with a substantive point of difference.” PharmaCare’s Bioglan Kid’s Smart items are line priced at $9.99.
In addition to gummies, pills and capsules, consumers have a range of delivery systems to choose from. Pharmavite, maker of the Nature Made brand, is contributing to the vitamin category’s revolution with its VitaMelts and Full Strength MINIs. Company officials say VitaMelts deliver a melt-in-your-mouth vitamin moment and come in a portable flip-top pack and Full Strength MINIs which are on average 40% smaller than the brand’s current soft-gel offerings, delivering a complete daily dose in one soft-gel.
An international affair
The success of the VMS category in the U.S. has attracted attention from around the world, with many international companies taking note of trends, strategies and new products. Australia-based Swisse Wellness arrived on U.S. shelves in February with a variety of its best-selling products. Domestically based in Chicago, company officials say they are committed to making a name for themselves in the U.S.
“Swisse selects premium quality ingredients for its vitamins and dietary supplements, including its clinically-tested best selling products, the Men’s Ultivite F1 and Women’s Ultivite F1,” says Ulrich Irgens, executive vice president of the Americas/international business director for Swisse Wellness. The Swisse products currently in the U.S. include Ultiboost Co-Enzyme Q10, which is formulated to support healthy cholesterol levels and circulation in healthy individuals and Swisse Ultiboost Wild Krill Oil, a convenient one-a-day dose of Omega 3 and antioxidant.
Due to the persistent demand for vitamins, minerals and supplements, the category’s sales are estimated to continue on its growth trajectory. However, shopper uncertainty, a key-limiting factor, can prevent retailers from achieving maximum market potential. What can retailers do to reduce consumer confusion at the shelf edge? Jeff Weidauer, vice president of marketing and strategy for Little Rock, Ark.-based Vestcom, a marketing and communications firm for the retail industry, summed up his response in one word: Education.
“What people know about the VMS category is not very much. What they are looking for is a trusted source that will give them information that they need, at the time that they need it,” he says. “It is a huge opportunity, for food and drug retailers in particular, to help educate their shoppers and play that role of expert, which is a natural role for them anyway.”
Vestcom officials say that a VMS shelf edge communication strategy must meet several criteria: proximity, prominence and visual appeal. “There’s never been a better time for supermarkets to dig-in and start playing the role of nutrition expert with their shoppers, whether it be in the pharmacy or food sections,” adds Weidauer.
Clear up the confusion
In a recent industry study, a majority of consumers found package information to be confusing and were unable to find relevant information at the shelf edge. Observers say this presents a great opportunity for retailers to engage with shoppers looking for more expertise and information in this category.
PharmaCare’s Kids Smart line features streamlined packaging which clearly calls-out the products benefits and attributes. Meda Consumer Healthcare restaged its Feosol line last year with cleaner, simpler packaging that tells the consumer which version of the iron supplement is right for them. They will also be shipping new Geritol packaging this spring in an attempt to modernize the brand.
“Better branding on the shelf will allow the consumers to be inspired by the product to improve their health, especially with the help of condition-specific products,” says Irgens of Swisse Wellness.
“Hero Nutritionals promotes product by getting samples into the consumers’ hands via social media and in-store demos with coupons driving immediate purchase at shelf and online,” says Hero Nutritionals’ Polson. “Our taste profile is amazing and once in hand—or mouth— it stimulates a desire for purchase and with coupons, drives action at shelf.”
Weidauer says retailers can reap the most benefits by tying the VMS category to the in-store pharmacy. The primary reason consumers select a pharmacy is trust in the pharmacist. Grocery retailers would be wise to take that trust and use it throughout the VMS category, and the entire grocery store, add observers.
Some say an effective VMS strategy would make information accessible at the shelf for all products and throughout the store. The vitamin, mineral and supplements category, while primarily one section, impacts all the other areas of the grocery store. There are things consumers can be buying in terms of produce, meat and dairy that will help make the vitamin regimen more effective, so retailers should cross-promote, not in terms of price, but effectiveness and relationship, add observers.
Promotional campaigns, advertising in key media outlets, outreach to healthcare professionals (pharmacists, nurse practitioners, family physicians, registered dieticians) and retailers are all vital to the success of the VMS category. However, the consensus among observers is that education is the most important and valuable effective method for the category’s growth.
PharmaCare’s Weld recommends that retailers, “Continue to educate consumers so they view you as a partner in health. It’s not just about discounting; it’s about educating.” She adds that informative flyers and in-store signage are tried and true methods for raising awareness.