Stocking and merchandising a well-rounded, consumer-friendly supplements section isn't easy. Paying at?tention to trends, tracking what's selling, and choosing brands are big enough jobs without worrying about niche markets. Do you really need to pay attention to your lifestyle-choice shoppers—those seeking vegetarian, kosher or organic supplements? Absolutely, say naturals manufacturers.
To best serve your customers, give some attention to the following three niche categories driven by consumer lifestyle choices.
Although it's difficult to determine the precise number of vegetarians in the United States (4 percent to 10 percent, according to a 2003 Harris Poll), natural products retailers should consider the larger, and more relevant, number of "vegetarian-aware" consumers out there, says Mark Vieceli, business development manager for Capsugel, maker of vegetarian Vcaps, based in Peapack, N.J. Recent research the company conducted through the Natural Marketing Institute found that 26 percent of the general population prefers supplements from vegetarian sources.?"These are the consumers who will go out and eat a fillet but then, when given the option, will choose vegetarian supplements," he says.
The company's vegetarian, plant-based capsules became available in the late 1970s, but in recent years have been experiencing double-digit growth. "They are very high-demand products, growing about 20 percent every year. We have a lot of companies that are switching from gelatin to vegetarian," Vieceli says.
Retailers can boost consumer awareness of these products, and ultimately sales, with a designated vegetarian section, according to Capsugel officials. "We recently did some research into the vegetarian-aware market to get a sense of their current practices, and found that the vegetarian-aware consumer is more likely to look for information, ask for it or look on the label," says Missy Lowery, the company's marketing manager. "So, if they are actively seeking the product and can find it easily, it helps the [sales] process."
Another company that has vegetarian consumers on its radar is Source Naturals, a subsidiary of Threshold Enterprises. "We'd like to expand on our vegetarian products; there's only about 5 percent vegetarians [in the United States], but in our industry, it's much higher," says Tony Lucchesi, national sales trainer for Threshold Enterprises in Scotts Valley, Calif.
Two years ago, Source Naturals intro?duced a vegetarian glucosamine (most gluco?samine products are derived from shellfish). Today, about half of U.S. natural products stores carry it, Lucchesi says. The company is currently working on sourcing a vegetarian hyaluronic acid to formulate a combination vegetarian HA/glucosamine product.
One-third of all supermarket products are certified kosher, with an estimated 5 million U.S. consumers shopping for kosher products, according to kosherquest.org, the Web site of the Kosher Information Bureau. These numbers are spurring companies like Bluebonnet Nutrition to certify its products as kosher.
Bluebonnet realized that putting the kosher symbol on its products would appeal beyond those keeping to a kosher diet. Consumers equate the kosher symbol with quality and to products free of shellfish and crustacean allergens, says Beeta Little, director of product development and technical services for the Sugar Land, Texas, company.
Not surprisingly, kosher sales for Bluebonnet are strong in large metropolitan markets, such as New York, Miami, Los Angeles and Atlanta, which have a growing population of kosher shoppers and consumers who equate kosher with quality, Little says.
The company helps boost consumer awareness and sales by offering retailers kosher shelf talkers that fit the width of a bottle and can be used to identify kosher products within a set. Bluebonnet also provides retailers with consumer brochures on kosher supplements.
Bluebonnet has found that kosher and vegetarian supplements sell best when stocked in both the branded sets and in their respective structure/function sections. "Shelf talkers can be employed in structure/ functions to make kosher products stand apart," Little says.
Considering the sales growth of organic everything, it makes sense that demand for organic dietary supplements would be on the rise. "When a consumer walks into a natural products store and buys organic apples, organic milk and organic bananas, doesn't it also make sense that that consumer would also want an organic dietary supplement? It's the same consumer," says Tom Newmark, president and co-chief executive officer of New Chapter, a Brattleboro, Vt.-based company that produces probiotic nutrients and herbal formulations.
"With a greater concentration of natural products retailers marketing the organic difference, people are becoming accustomed to looking for certified organic status. You're seeing enormous growth in all categories where the organic status is available, whether it's milk or supplements," Newmark says.
While it might seem that organic supplements is a segment that should be exploding, under the rules of the National Organic Program, most organic supplements can't sport the USDA organic label. To carry the USDA organic label, the product has to be at least 95 percent organic, which is difficult to do because of the ingredients and delivery forms of many supplements, according to Newmark. "The NOP has some round-peg, square-hole issues when it comes to organic guidelines for supplements," he explains. For example, any time you encapsulate a product, the weight of the non-organic capsule renders even 100 percent organic ingredients less then 95 percent organic, so you can't use the label, he says.
Also, certain food ingredients used in supplements, such as brewer's yeast, are not organic, according to the NOP. "When our organic vitamins and minerals are cultured using brewer's yeast, they don't meet the NOP's organic standards," Newmark says. So, many companies stick with the made with organic designation instead.
Even though most of its line is in that designation, New Chapter is experiencing tremendous growth and demand in the natural products channel, Newmark says. "We hear feedback from retailers that consumers are asking about organic supplements every day, and our company is growing robustly year after year. Growth is across the board, not [in] a single category," he says.
"It's a very good time to be organic. I wouldn't call it a niche market anymore. I think it's a core category."
Anna Soref is a Lafayette, Colo.-based freelance writer.
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