The economic squeeze has raised the bar for supermarkets selling vitamins and supplements.
Some food retailers are saying the difficult economy has resulted in a decrease in their overall HBC sales, as consumers limit their shopping trips. Mass merchandisers appear to be the primary benefactor of this trend, food retailers said, as the discounters' broad selection of products leads some shoppers to stock up when shopping them.
“Gas prices are forcing people to do one-stop shopping. Due to convenience of selection, mass is taking a piece of all categories,” noted Sue Vodika, HBC category manager for Bashas', Chandler, Ariz.
Chris DePetris, director of wellness programs for Global Market Development Center, Colorado Springs, agreed: “Mass carries a broader array of products, and consumers may be indoctrinated to buying those products there.”
High-profit vitamins and supplements in particular are reported to be selling well at mass — and in the drug channel, where sales of vitamins only are up 11% to $1.5 billion for the 52 weeks ending May 18, according to Information Resources Inc., a Chicago-based market research firm. IRI also reports drug stores had the highest increase in sales of mineral supplements, up 11% to $863 million during the same period.
Meanwhile, IRI reported mass merchandisers grew their vitamin sales by 4.1% to $250 million during the same period. However, those figures do not include Wal-Mart Stores, Bentonville, Ark.
While mass merchants carry a broad product selection, food retailers said drug chains often lead the way on vitamin/supplement selection and merchandising.
At the same time, natural supermarkets such as Whole Foods Market, Austin, Texas, are grabbing a large share of the vitamin/supplement market. Sales of vitamins and minerals in natural supermarkets rose 6.2% to $974 million for the year, as of May 17, and conventional supermarket sales rose 4.8% to $1.5 billion, according to SPINS, Schaumburg, Ill., a market research and consulting firm for the natural product industry.
While IRI figures indicate the food channel is holding its own against drug and mass in the health-related category, up 5.6% to $827 million during the 52 weeks, retailers and consultants said grocers must do a better job of promoting supplements, educating consumers about them and cross-merchandising supplements and food.
Jim Wisner, president of Wisner Marketing Group, Libertyville, Ill., said it isn't a matter of supermarkets not having enough space, either. “Most of the major [grocery] players have the space to compete in this category. It is very easy and it is high-profit margin, so why wouldn't you want to?” he said.
Supermarkets are particularly missing the boat on carrying twin-packs and multi-packs of vitamins and supplements, he said.
“There has been reluctance on the part of supermarkets to go after people who are the heavy users of these products. Anyone who is on a regular schedule, such as for glucosamine and diabetes medications, is going to club stores,” Wisner added.
Retailers admit merchandising and marketing need to be stepped up, to better compete.
“There is not really strong merchandising [in grocery stores], and supplements are very infrequently in fliers,” DePetris said. Carrying a larger variety of vitamins and promoting them on price would likely help supermarkets gain sales, he added.
Buy-one, get-one-free offers could be effective for supermarkets, because vitamins are “not always a dedicated spend” for consumers, DePetris said.
While it might not be a matter of space, Spencer Horn, director of category development for Cincinnati-based the Elations Co., which makes nutritional drinks, points to shelf height.
“Retailers that do a good job in the supplement category often raise the shelf heights in their sections and expand shelf space. Most supermarkets want women to be able to see over their shelves, so they jam everything into four to five shelves,” he said.
Communication with shoppers on the vitamin category is another tactic supermarkets could pursue to help move products. This could consist of in-store seminars, one-on-one meetings with the store's dietitian or nutritionist, articles and ad space in weekly circulars. “It can be as simple as ‘Did you know?’ signs in the department. How many people who suffer from arthritis know that glucosamine helps?” Wisner said.
The bottom line, according to John Beckner, director of pharmacy and health services for Ukrop's Super Markets, Richmond, Va., is food retailers need “to do a better job of leveraging the health and wellness advantages that our practice setting has over other folks. We have the food here that we can suggest, along with supplements.”
While supermarkets tell SN that supplement sales are fairly steady, merchandising success stories show that grocers can strengthen their share in this category.
Vitamin and supplement sales are excelling at Big Y Foods, Springfield, Mass., thanks to promotions of national brands and aggressive marketing of its Full Circle private-label natural-vitamin line from Topco Associates, Skokie, Ill.
Starting about a year ago, Big Y added about 80 SKUs of Full Circle vitamins, typically merchandised in separate, 12-foot sections within the vitamin department.
“We are very happy with sales,” said Linda Schmidt, category manager of health, beauty and wellness, for the chain.
Schmidt believes the Full Circle line is doing well because it is promoted like a national brand and sold 50% off once a month or sometimes twice a month.
In the alternating weeks, Big Y often promotes national-brand Nature's Bounty at 50% off as well.
Specific products, such as fish oil, chromium, glucosamine and chondroitin, are also discounted at 50% off on a regular basis.
To correspond with that, Big Y educates store associates and consumers about fish oil, glucosamine and other products.
“Every week we try to put information in our ad. When I write my notes for the stores, I try to educate them [staff] about what these different vitamins do,” Schmidt said.
Vitamins are also selling well at Bashas', including categories that have recently become more popular, such as essential oils and digestive aides, according to Vodika.
“Vitamins are essential to all shoppers, as they strive to live longer and healthier. Vitamins are used by all mass, drug and food [stores] as a promotional category,” she said.
Vitamin and supplement sales at Bashas' have grown 1.9% so far this year, from a spike in national-brand product sales that offsets a private-label sales decline. “I believe my national-brand numbers are up because my consumers are national-brand consumers,” Vodika said.
Bashas' includes vitamin promotions in its circular every week, and features specific products in the new “Start Fresh, Live Healthy” section of its circular, twice a month. The section, put together by Bashas' dietitian, is used specifically to promote supplements and educate shoppers about them.
Sales are steady at Ukrop's, where larger supplement sections are set in stores that have natural and organic store-within-a-store departments. Vitamins and supplements are typically next to Ukrop's pharmacies, a great merchandising location for sales and education, noted Beckner.
“Pharmacists are getting more questions about things that consumers hear on TV or read on the Internet. Also, the pharmacists have gotten comfortable and confident recommending our private-label vitamins [Top Care] as a more economic alternative to the brands,” Beckner said.
Jewel-Osco, Chicago, and Giant Eagle, Pittsburgh, also do well with supplement merchandising, because they merchandise the category similar to drug chains, said Wisner. “Giant Eagle starts from the point of calling it ‘a drug store at Giant Eagle,’ so they carve it out in consumers' mind as a drug store,” Wisner explained.
Meanwhile, supermarkets are noticing a shift away from weight-loss products and toward supplements that promote nutrition.
“Back in the day, people would want to lose 5 or 10 pounds for their upcoming high school reunion by going on some crazy, unhealthy diet. But times have changed and the consumer knows that to have their long-term health is more important than just today's quick fix,” Schmidt said.
In addition, there has been negative press about some diet products in recent years, particularly with illnesses and deaths linked to the herb ephedra, which has since been removed from diet products. “If people are dying, potentially, you get worried. Also, consumers have gotten smarter on core nutrition,” DePetris said.