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Could natural products retailers exist without supplements?

Could natural products retailers exist without supplements?

Dietary supplements and natural products retailers have long been fruitful companions. According to data from Natural Foods Merchandiser’s 2011 Market Overview, natural products retailers generated nearly $720 million in supplement sales in 2010, up 4.2 percent from the previous year.

Although this represents a lot money for both retailers and supplement manufacturers, such stats fail to tell the full story about how much natural products retailers—particularly smaller, independent natural products retailers—depend on their supplement sales. As Bill Crawford, New Hope’s director of retail publishing programs, told me recently, “If independent natural products retailers lost their ability to sell food, it would hurt for sure; but if they lost their ability to sell supplements, most wouldn’t be able to stay in business.”

Not only do supplements bring in some of the greatest profit margins for retailers, they also have a much smaller merchandising footprint—meaning that retailers can fit more product into a smaller amount of space than is needed for foods and beverages. Perhaps more importantly, however, supplements gives natural products retailers the opportunity to provide true wellness education and guidance to their customers.

But what would happen if natural products retailers lost their ability to sell the wide range of supplements products they have access to today? What if an even greater percentage of total U.S. supplement sales shifted to mass market stores, which generated $2.1 billion in supplement sales last up, up 11 percent from 2009?

Contemplating such scenarios makes the education track I will be moderating at the Natural Products Expo East Retailer Workshop on Sept. 21 seem that much more important. Titled “The Business of Supplements,” the track will feature three sessions aimed at helping natural retailers protect and grow their supplements sales.

  • The first session will dive into what I consider the most important aspect of selling supplements: verifying product quality. Too often stories surface of dietary supplements containing illegal drugs or being economically adulterated so as to deliver “efficacious” results or bring ingredient costs down—all while exposing consumers to unneeded safety risks. Although the manufacturers engaged in such unscrupulous practices often sell their wares via shady Internet sites, they have been known to sneak their products into reputable supplement retail outlets. The presenters for this session—Scott Steinford, president of nutritional supply company ZMC-USA; and Frank Jaksch, CEO of third-party testing company Chromadex—will discuss the threats that exist today to supplement quality and offer actionable advice for how natural products retailers can vet the true quality of the supplement products they sell and communicate their quality control measures to shoppers.
  • Once retailers have carefully chosen the supplement products they will carry, they must learn how to effectively—and legally—sell their customers on the proven benefits of those products. The importance of teaching retailers how to market and talk about supplements was brought to light once again last year when the Government Accountability Office released its secret shopper tapes to Congress, revealing that some retailers are breaking the law (likely unknowingly) in how they discuss dietary supplements with their customers. During the second session of the Supplement Retailer Workshop track, CRN President and CEO Steve Mister will walk retailers through exactly what they can and cannot say about supplements and why. Mister will also address current pressing regulatory issues that could affect dietary supplement sales, including the U.S. Food and Drug Administration’s recently released proposed guidance on new dietary ingredients (NDIs).
  • Ringing up that first supplement sale is great, but how do retailers turn that one-time buyer into a repeat supplement shopper? During the final session of the Supplements track, natural products marketing expert Lynda Goldman will answer this question by discussing how retailers can use education, marketing and other tools to drive supplement customer loyalty.

If you are in the business of selling supplements and will be at this year’s Natural Products Expo East in Baltimore, I encourage you to attend the “Business of Supplements” portion of the Retailer Workshop. You can find more information or register on the Expo East website.


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