Business Leaders Forum: The changing supplement consumer & the shift to e-commerce

2020 was “one for the record books” for dietary supplement brands, with surging sales and new consumers entering the category.

Many stakeholders are questioning if those new consumers will stay with the category through 2021 and beyond. They will, according to Jim Emme, CEO, NOW Health Group. “Our leading indicator on that is that future orders and proforma P.O.s that are coming through carrying on not just through the rest of 2021, but also into the first quarter of 2022, and those orders are being consistently upheld by the customers that are placing them,”​ he said. “This tells us that this wave is going to stay for a while.​

Emme added that the opportunity offered by new customers “is still there and we don’t see it changing much.​

“It’s really a gift to be able to educate a new group of consumers about how we can help out. We’re still optimistic about this year. We feel it’s going to be strong. We know things are going to flatten out at some point, but we don’t see it happening, so we continue to make major investments just to be able to serve that new group of consumers.”​

Emme was speaking during the recent NutraIngredients-USA Business Leaders Forum​, which occurred on Tuesday, January 26, alongside Sharon Leite, CEO, The Vitamin Shoppe; Courtney Nichols Gould, Co-Founder/Co-CEO, SmartyPants Vitamins; and Jeff Boutelle, CEO, Pharmavite.

Re-evaluating lifestyles and health regimens ​

Boutelle explained that Pharmavite launched a proprietary consumer tracker at the start of the pandemic, and the company has been tracking monthly consumer behavior, attitudes, sentiment, and more.

“And our data is indicating that the majority of both [established] users and new users are committed to a daily VMS routine, and – they say at least – that they expect their daily VMS usage to continue even after they receive a vaccine.”​

Boutelle continued: “There’s not much good about the pandemic at all, but there are a couple of silver linings, and one of them is it really caused people to re-evaluate their lifestyles and their health regimens. My hope, and my belief, based on our consumer work is that people will continue – largely – these new health regimens that they’ve discovered and gotten into well after the pandemic.  ​

The Vitamin Shoppe’s Leite said: “What we’re seeing with our consumers is the importance of foundational health. It really starts with a core and are there additional solutions that we can provide consumers, but it does start with that basic foundation. I think that the awareness that consumers have on what that foundation needs to be has been a critical breakthrough for our industry.”​

The retail landscape also evolved in 2020, with the online share reportedly doubling year-on-year. When asked if the majority of new consumers were online, Leite said that while The Vitamin Shoppe saw a huge shift to eCommerce in 2020, new consumers were still coming to the stores because of the opportunity to talk to a live person.

“We are seeing that because they get information – and we all know that the information they get on the internet isn’t always accurate – and being able to trust the information, is really important to our consumers.”​

Quality and efficacy​

New consumers are clearly an opportunity, but there’s also an educational challenge here. “You had a bunch of people who might not have been looking at vitamins before, that’s a different type of consumer that needs a different level of education,” ​explained Nichols Gould. “That was one that we paid attention to pretty quickly. We could see it in the type of reviews we were getting, and the type of customer emails. They were clearly coming in from a different place, as opposed to someone who is proactively searching for preventative health.”​

So what kind of questions were these new consumers asking? The focus, said Nichols Gould, was on efficacy. “And that also goes with if you have a challenging economic environment. What people are focused on is, ‘If I’m going to spend my money, I want it to work’. In multivitamins, that’s challenging. There’s not an immediacy necessarily.”​

NOW’s Emme added that product quality has been high on the list for their new consumers. “The biggest question we’ve gotten is, ‘How do I know what’s in the product?’ Incredibly, the question of trust has not come up as much as one typically hears in our industry, which I think is a great opportunity for us as an industry.​

“The trust we’ve been granted by these new consumers is so precious. It’s wonderful. But we’ve got responsibilities as CEOs in this industry to uphold the standards and to continue to uphold that consumer trust each and every day.”​

Look out for more coverage from the NutraIngredients-USA Business Leaders Forum​ in the next few days.

To view the forum on-demand, please click HERE​ (registration required).