Private Label Buyer

GIVE ME A D, VITAMIN D THAT IS

November 5, 2010


The potential for a severe cold/flu season this year means good news for the sales of vitamins and supplements. With a number of consumers cutting back on some household items due to tightening budgets, concerns over missing work days has many turning to vitamins and supplements to ward off sickness.
While overall vitamin sales rose 10.27 percent in the 52 weeks ended July 11, 2010, according to Chicago-based SymphonyIRI, sales of private label vitamins rose even more with a 12.12 percent increase. Sales of liquid vitamins/minerals also rose dramatically for private label in the same period, almost 67 percent to just more than $15 million, SymphonyIRI reports (see table, page 46.) SymphonyIRI data is for sales at supermarkets, drug stores, and mass merchandisers, excluding Walmart.
One of the hottest vitamins on the market today is the perennial star Vitamin D, according to Jeff Reingold, senior director or research and development for Hauppauge, N.Y.-based Contract Pharmacal Corp. “There have been recent studies indicating that Vitamin D deficiencies can be the root cause of depression or even heart disease. Retailers are responding to this research by revisiting existing formulations and creating new formulas to include or highlight the Vitamin D content.”
Demand also is up for specialty niche items, such as herbal products, Reingold adds. “These products range in indication from energy and weight loss to mental acuity, to bone, heart and joint health. Probiotics and homeopathics are also gaining considerable momentum.”
Another trend today is towards supplements that target specific ailments, according to Peter Sokoloski, private label manager, NOW Foods. “As our population ages you’ll find that more consumers are looking for natural solutions to their common health-related concerns,” he says.
The stick pack is a novel delivery form quickly gaining notoriety in the category, Reingold says. “Market demand is rapidly increasing for this single-dose package of powder products, which is convenient for consumers to carry and consume. Consequently, more and more products are being launched and reinvented in this dosage form. Flavored products are also on the rise. CPC is receiving a large number of requests for flavored powders and chewable tablets. We have strategically partnered with flavor specialists to make sure that we can deliver all requests - including taste masking technology.”
There are some important things to keep in mind when it comes to marketing private label vitamins and supplements, Sokoloski says.
“If retailers are looking to market any vitamins or supplements they really need to back up their product line with an informational database for consumers, preferably something Web-based. There is a lot of good information that can be given to consumers, but unfortunately the product labels or sales associates may not be able to go into any kind of depth that a consumer might require. For example, a store brand may be able to put a GMP logo on each label, but if you don’t have a way of explaining just what that means in terms of quality, then it’s just not effective. Once the consumer understands that it relates to good manufacturing practices, they’ll have a higher level of confidence in the brand.”
Another tactic that retailers can learn from in this category is to visit retailers outside of their trade class, according to Gary Pigott, senior vice president of sales and marketing for Miami-based Mason Vitamins. “Too often we look at what our trade class competitor is doing, rather than look at some of the best such as Aldi, Trader Joe’s and Wegman’s with their programs,” he says.
In terms of boosting shelf appeal for PL vitamins and supplements, Sokoloski says that retailers are looking to have a total package for their supplements, which usually means having bottles and labels that offer a complete look. “It’s not enough to just put a nice label on a generic bottle; they want something that stands out versus the competition. Some retailers are concerned with a more green approach too, but this seems to be far less prevalent.”
As the economy continues to be a factor in consumers’ buying decisions, private label products continue to show double-digit sales increases as consumers recognize the value and that the quality is equal or better than national brands, adds Reingold. “Promotions and key ad space usually reserved for branded products are getting the retailers branded products featured. Retailers are also expanding their internal department putting more focus on the marketing of their private label brands. Where retailers were once happy with NBE (National Brand Equivalent), they now strive for NBB (National Brand Better).

Mintel International expects that gains in the U.S. vitamins and minerals market will remain steady through 2014, particularly because many of the key demographics that use these products heavily are set to expand in the coming years. Specifically, as the U.S. population ages, the higher number of older Americans foretells more usage among this group. Also, the number of women in the U.S. is also expected to increase, which will benefit the market because women report more usage of vitamins and supplements than do men. PLB

 

What the Competition is Doing

U.S. Nutrition, maker of Nature’s Bounty and Sundown vitamin and mineral products, top the FDMx market with sales of $505 million as of June 2009, a gain of 13.8 percent over June 2008, according to Mintel International estimates. Pharmative (Nature Made) also grew considerably through FDMx channels, gaining 11.7 percent in 2009 for sales of $374 billion.
Other leading companies also gained, such as Wyeth (Centrum), and Bayer (One-A-Day). U.S. Nutrition leads the mineral supplements segment with strong sales of its Nature’s Bounty and Sundown Naturals brands, followed by Pharmative’s Nature Made and Wyeth’s calcium supplement brand, Caltrate.

In the multivitamins segment, Wyeth ($190 million in FDMx sales in the segment) and Bayer ($169 million at FDMx) have gained significant sales by marketing products with specific gender, age and health goal-oriented messages such as Wyeth’s Centrum Silver and Centrum Cardio and Bayer’s One A Day Men’s Performance. Bausch & Lomb also grew with sales of its Preservision, designed to prevent age-related macular degeneration.