At the recent Natural Products Marketplace show in Las Vegas, longtime private label supplement maker Vitamer Labs was awarded the Diamond Manufacturing Award. Learn from their success with this advice about how to do private label supplements right.
newhope.com: How has the private label business changed?
Jane Drinkwalter: The poor economy helped private label and now that there seems to be an upturn, our sales continue to increase. Studies show that private label purchases are at an all-time high and, even as the economy does continue to improve, 94 percent of consumers will continue to buy private label products. Consumers are now looking for quality products and innovation as much as pricing. Private label products have stepped up to that plate and deliver excellent quality products.
newhope.com: What trends are you are seeing now—and for the future?
JD: The customer is asking more questions regarding quality and how their products are made as they hear issues around FDA inspections. Quality will take a more important role in the customers’ decision-making process. They want to understand what testing is being done on their products, where the ingredients come from and how they are processed. In addition, they have those same questions about the formulas... what is the point of each raw material and why did we choose the ingredients and the potency. We have very savvy and inquisitive customers!
newhope.com: What are your most popular products?
JD: Most likely the same for much of the industry: vitamin D, fish oils and multivitamin products. We just added a new unsweetened, unflavored protein powder to our Show Me The Whey line. It is selling very well. Whole Psyllium Husk is another great seller.
newhope.com:What supplement questions or confusions are you hearing from retailers and their customers?
JD: Increasingly, they want to know about the recyclability of our packaging components and much more detail about product ingredients. Where do they come from, how are they manufactured? We have excellent relationships with our suppliers and even have them on sales team conference calls to educate our team so they can pass the details on to our accounts. We are very transparent regarding our products and want to have as much in-depth, verified information for the consumer as possible.
newhope.com: Do you offer formulas that mirror the ingredients of popular name-brand supplements?
JD: Yes, in fact we have a line of National Brand Comparison products and plan to add more to the line. This has been very successful for us. Most consumers are used to seeing this in other market channels and expect the same from their natural food stores.
newhope.com: Do you create custom formulas for retailer clients?
JD: Yes, our company does, but through the custom division. With larger minimums and many more details to attend to (like delivery form and all the ingredient possibilities) we encourage our customers to see if one of our 200-plus products might fit their needs. That way, we provide the structure/function statements and all the research and data needed to sell the products.
newhope.com: Why should a store consider doing private label supplements?
JD: This is the only product in their store guaranteed to bring their customer back. Almost everything else can be purchased down the street or online. This is the product that can create your brand just the way you want. You set the pricing, the margins, the marketing and merchandising. Your brand is created by you to reflect just who you are.
newhope.com: What costs are associated with it? Is it something mostly for larger or chain stores?
JD: The cost of entry is very low. We ask for a one time only label fee. We have a minimum of $1000 for an opening order and ship freight paid on orders over $250. You need only buy three bottles at a time. Clearly, this works great for all stores who want to build their brand. We offer Planograms, promotion plans and merchandising to help accounts of all sizes be successful.
newhope.com: What questions should a retailer ask when assessing private label manufacturers?
JD: First, are you GMP compliant? Have you had an FDA inspection? What was the outcome? Is the manufacturer third party certified by an industry group? Do they belong to the NPA or an association that will help advocate for them and keep them informed regarding legislation and regulations that will affect their store?
Have you read their labels and do they have information your consumer can use? Are they compliant with DSHEA and make no claims? What about references? Who supplies the product to the stores they most admire?
Do they provide educational and technical support for the store? Do they have a sales team in the field to help you with strategy, goals and execution for your success? Can you pick up the phone and talk to a quality or manufacturing or packaging person to help answer questions if you need?
newhope.com: Do you think shoppers are concerned about supplement safety—and might they be more concerned about quality in a private-label supplement?
JD: Studies show that most shoppers now see private label as the same quality as national brands. If the product is marketed and merchandised as a quality product, the consumer will not challenge the products. We give our accounts enough information to respond to the consumer who asks “who makes your product?” or “where does this come from?” or “why should I buy this?”
newhope.com: What's the story of Vitamer Labs?
JD: Vitamer Labs has a rich history. We are a division of Nexgen Pharma (formerly Anabolic Labs), a family owned 4th generation manufacturer and distributor of dietary supplements (with a separate division for pharmaceutical and custom products). Many employees have been here more than 10, 20 and even 30 years.
We have two manufacturing facilities: 50,000 square feet in Irvine, CA and 250,000 square feet in Colorado Springs, Colo. Our corporate offices are in Irvine. The president of the private label divisions is Kyle Brown, great grandson of the original founders, who started the company in Chicago. Kyle has a son and a daughter, so we are planning on a 5th generation (and maybe the first female president!).
We are strictly private label, with no brand to compete with our accounts. All of our energy and resources go into creating the store’s brand. For those of you who know Sandy Gooch, she was one of our first champions. We manufactured her products and were known at the time as “Goochable,” which was quite an honor!
Even in the early days, our labels were full disclosure — all our ingredients and excipients were listed on the label. We have always had structure/function statements and romance copy to act as a “silent salesperson” if no one can be in the aisle helping the consumer. We have always made a positive statement about education.
In addition, we are very supportive of the natural products industry. We support the NPA and NPF with time, resources and funds. We are active participants in Lobby Day.
newhope.com: What distinguishes Vitamer from other manufacturers in this space?
JD: Our parent company was founded in 1925 (Vitamer Labs in 1975) to exclusively sell private label products to the booming natural products industry. So longevity separates us from many. We also have been a pharmaceutical manufacturer since the 1940s and we were always making our product to high quality, verifiable standards, long before DSHEA and the new Dietary Supplement GMPs were put in place.
In addition, we have had a Registered Dietitian on staff since the early 1990s. That has helped our technical and educational materials be robust and very science based. I think our training and educational materials are some of the best in the industry. We have new product packets that help our sales team give the appropriate features and benefits of our company and products to our accounts.
Another unique feature is that we pack our tablet and capsule products in recyclable glass bottles. We feel this is the best way to store your products, and it gives the consumer the feeling and look of quality even before they read the label. In addition, they can see the size of the tablet or capsule before they get it home.
We have fully staffed labs in both facilities to test incoming raw materials, in-process products and finished products before they leave the facility. We test for heavy metals using ICP-MS, all of our products are tested to contain no more than 10 PPM gluten via our Elisa test, melamine testing is done in-house, as well as micro and many other tests to ensure products are compliant to the label and what the consumer wants.