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Gaspari capitalizes on gentrification of sports market

Gaspari capitalizes on gentrification of sports market
MyoFusion protein line to help push 2013 sales past $80 million.

Former U.S. professional bodybuilder Rich Gaspari has muscles in places where most people don’t even have places.

His pumped-up physique is the very epitome of the traditional bodybuilder’s form, and a host of competitive victories throughout the 1980s and 1990s has guaranteed him a seat in the pantheon of his profession.

But equally pumped up are sales at Gaspari’s eponymous sports nutrition business, the New Jersey-based Gaspari Nutrition, which he founded in 2001. Since 2007, the company has seen annual sales increase more than five-fold, from $15 million to a projected $80 million in 2013.

Gaspari Nutrition has ridden out multiple brushes with the U.S. Food & Drug Administration to emerge with its business and reputation intact, buoyed by a range of sports nutrition products moving from strength to strength—particularly in the case of the company’s hit protein brand MyoFusion. Its products are now sold in 95 countries worldwide.

From bulk to efficiency

At the root of Gaspari Nutrition’s success in the past five years has been a shift in emphasis away from its core consumer base of bodybuilders towards a much larger group of consumers—namely health and fitness-conscious Americans who want to look and feel good. Daniel Pierce, vice president of brand strategy and product development at Gaspari, says this switch in focus was guided by “the understanding that you have to diversify.”

He explains: “America is becoming a little bit more health-conscious and body beautiful. People don't want to be as bulky any more. They want to have lean—what we call efficient—physiques. Our consumers aren’t as much concerned with mass as much as just looking good. They want to look more like a UFC fighter as opposed to a power lifter. We recognize that shift in the marketplace.”

In the United States, Gaspari Nutrition now boasts listings for its products in more than 5,000 retail outlets, including GNC, Vitamin Shoppe, Kroger and Dick’s Sporting Goods—as well as through 100-plus online stores, including

Thank you MyoFusion

Key to the widening of Gaspari Nutrition’s consumer base has been the MyoFusion range of protein powders. First introduced in 2007, it has evolved into the company’s flagship brand and biggest seller. So successful has it become, in fact, that Pierce admits: “To be honest, it's hard to keep up with production. The MyoFusion protein brand has really brought a lot of new customers to us.”

Based on a blend of whey protein (20%) and casein (80%), MyoFusion’s main selling point is that it tastes good despite containing up to 25g of protein per scoop. It is this combination that has proven to be a winner with health-conscious consumers who previously may have rejected the notion of protein supplements on the grounds that they disliked consuming them. Now, however, consumers buying MyoFusion products can choose between flavors that include Strawberries & Cream, Cinnamon Roll and Peanut Butter Cookie Dough.

“First and foremost, if someone is going to introduce something into their diet, it has to taste good,” Pierce says. “If you have something that tastes really good and has a great ingredient profile, fitness-minded people latch onto it. MyoFusion is a great tasting product and high in protein. Combine that with a fair price, and it's just a good balance for the consumer.”

Customer loyalty is very high, says Pierce. “What we have is a really strong brand behind it. People are loyal to it. We don't focus on the first sale. We focus on the second, third, fourth, fifth and sixth sale. We don't have a lot of brand attrition, with people going to other brands. We tend to keep our customers and then gain more through very good marketing and sales strategies.”

Chief among those strategies is sampling, says Pierce. “We have a very strong demo team around the country and around the world. I would say that Rich Gaspari is very generous when it comes to sampling. We are very confident that if you try a sample of our products then you will buy them. So we attend a lot of tradeshows, jujitsu tournaments and bodybuilding contests around the world, and we do heavy sampling. It works very well for us.”

Pierce is predictably coy about revealing the secret to MyoFusion’s good taste. “The bottom line is that we are not cheap about it,” he says. “Flavor systems cost a lot of money and I guess some brands focus on what they can get away with. We just focus on satisfying the customer.”

Particularly successful for Gaspari Nutrition has been its MyoFusion probiotic range, which incorporates Ganeden Biotech’s BC30 probiotic strain along with protein. Initially pioneering, MyoFusion Probiotic has begun to spawn imitators, a true testament to its success. Pierce says: “For me it was a no-brainer. I was buying a probiotic and taking it with my protein powder and I thought—Why can't we just combine it?”

Mike Bush, vice president of business development at Ganeden Biotech, is effusive in his praise of Gaspari Nutrition’s innovative streak. “They are known as innovators in this space and tend to be a first-to-market type of company, so it just made sense for them,” he says. “They decided they wanted to be the first ones to launch and they did a great job of it.”

Hard no more?

In spite of its achievements in recent years, it hasn’t all been snooth sailing for Gaspari Nutrition. In fact, in the past it has sailed pretty close to the wind in a regulatory sense and attracted the wrong kind of attention from the FDA on more than one occasion.

In October 2010, for example, FDA prompted the company to issue a voluntary recall of Novedex XT, a testosterone booster, because it contained an unapproved anti-aromatase ingredient called ATD. In March 2011, Gaspari Nutrition received a warning letter from the FDA over violations of current good manufacturing practice (cGMP) regulations following an inspection by the agency. The letter accused Gaspari Nutrition of failing to follow up adequately on adverse event reports from consumers.

Episodes such as these prompted an internal shake-up at the company, which involved installing the systems and people necessary to better meet regulatory requirements. “Just like every other supplement company out there, we had to really pay attention to the regulatory environment, not only domestically but internationally,” says Pierce. “A lot of our internal reorganisation had to do with putting in quality systems.”

He continues: “In the past we have had recalls and now we do everything to be as compliant as possible. It is just taking into account all the regulations and following them. It's very simple. Rich had to make a lot of changes within the company from an operational standpoint. That included hiring people that understand the regulatory environment. The old school supplement industry was very Wild Wild West. Now we have recruited regulatory experts—some of the best and brightest from food and pharma. We now work in a regulated environment and we have to follow the rules.”

He adds: “It used to be that brushes like that just made you appear more hardcore and in some ways it actually helped us. Nowadays I don't believe that would fly, which is why we made the changes.”

Reputation is now an important currency for Gaspari Nutrition. Pierce believes it goes to the heart of the reason why the brand has enjoyed the success it has in recent years. “I think consumers are comfortable with it because of Rich Gaspari,” he says. “He is a visible man. A lot of sports nutrition companies, you don't even know who the CEO is, whereas Rich Gaspari puts his name on the line for the quality and the value of the product. Really, it's important to us and our brand that he is involved in this process.”

New look

Gaspari Nutrition is not resting on its laurels. It recently unveiled new packaging to broaden the appeal of its products even further. “We were launching a bunch of new products and we thought, let's introduce a new look. It's the perfect time. It's a lot more inviting. Before, it was black and blue and now it's white and blue. It's much more appealing to the eye, brighter on shelf and it really stands out.”

Beyond visual appeal, and in another nod towards the tighter global regulation of nutrition products , labels are now designed to be easier to amend to enable Gaspari Nutrition to meet national and regional requirements more easily.

"Another key reason for the rebranding was to make labels that could be compliant with very few changes to the American version,” Pierce explains. “We want to appear almost the same in America as in Europe and Canada even though all three of those regions have different labels—technically speaking. The new branding allows us a lot of flexibility.”

This sophisticated approach to compliance seems indicative of the way Gaspari Nutrition has ‘grown up’ in recent years as its consumer base has widened beyond hardcore bodybuilders. But it hasn’t forgotten its roots. Rich Gaspari was recently awarded a Lifetime Achievement Award during the 2013 Arnold Classic, a professional bodybuilding tournament backed by Arnold Schwarzenegger. Gaspari was the first ever winner of the Arnold Classic back in 1989.

“The people that have received that award include Sylvester Stallone,” says Pierce. “It’s really big for us and for him.” As for the future of Gaspari Nutrition, Pierce predicts more significant growth is on the way. “Now we are gearing up for our next economic boom,” he says.

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