Two supplement sellers are proving that consumer spending in the latter half of 2009 has significantly improved from the 2008 pace reported by many nutrition industry firms. Vitacost.com and Vitamin Shoppe—both now publicly traded since filing IPOs in 2009—announced healthy sales increases in their fourth-quarter and 2009 year-end results last week. Vitacost.com saw its net sales increase 32% to $50.3 million from net sales of $38.2 million for the fourth quarter of 2008. Vitamin Shoppe’s fourth-quarter sales increased 13.5% to $162.4 million for the three months ended December 26, 2009, compared with $143.1 million for the three months ended December 27, 2008.
For the year, Vitacost.com churned out an impressive 33.6% increase and reported $191.8 million in sales, compared to just $143 million in 2008. Vitamin Shoppe was able to grow its sales by 12.1% to $674.5 million. Comparable store sales for the year increased 5.2%. Both companies are forecasting more strong growth for 2010. Vitacost.com has projected growth anywhere from 28% to 34% in 2010, with sales in the $245 million to $255 million range. Vitamin Shoppe’s forecasts are more conservative: The company reported in its latest earnings statement that it expects 2010 growth to be in “the mid-single digits.”
NBJ Bottom Line
When Vitamin Shoppe filed its IPO in October 2009, it was the first offering by a retailer in nearly two years. Now, with the company performing well and investors taking note, it could open the door up for more nutrition industry brick-and-mortar retailers to take their businesses public. The company’s 12% annual growth is significantly ahead of the total dietary supplement market’s estimated 2009 growth of 6%. Vitamin Shoppe plans to expand on its 438 stores and open approximately 42 new stores in 2010. Such expansion will raise the company’s profile among consumers.
On the direct-to-consumer front, dietary supplement sales on the Internet are burgeoning and Vitacost.com is proof of that. Preliminary Nutrition Business Journal estimates show that online supplement sales across the entire U.S. market were up 21% in 2009. Vitacost.com outpaced the industry with 33% growth. The company has grown its number of active quarterly customers from around 428,000 in 2007 to more than 1.1 million in 2009. Its number of quarterly orders has shot up from around 300,000 to more than 650,000.
When looking at the two companies’ sustained positive results across different sales channels, it’s easy to remain bullish on the dietary supplement market in the United States. With an estimated 6% sales growth in 2009 and another 5% to 6% expected in 2010, there are growth opportunities abound for manufacturers and marketers in the supplement segment of the nutrition industry.
NBJ’s May issue will focus on the U.S. direct-selling market and will include an in-depth look at supplement sales via the Internet. To order a copy of the issue or subscribe to NBJ, visit the NBJ Subscriber Page.
Related NBJ links:
With Sales Thriving, Vitamin Shoppe Parent Files for IPO
Retail Versus E-Tail: Vitamin Shoppe CEO Shares Views On Both Venues
2009 Deals of the Year
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