August 29, 2012
SAN FRANSICOA large percentage of consumers (76 percent) take a vitamin or supplement, according to a new national survey of a 1,364 consumers. Within this group, 71 percent said they take a multivitamin, followed by fish oil or omega-3s (45 percent), vitamin D (40 percent) and calcium (33 percent). However, usage of sports-related supplements (10 percent) and weight loss supplements (7 percent) was relatively low.
For consumers who are trying to improve their health, 43 percent said they are taking supplements, according to the "Organic Kale, Omega 3's, and Outsized Growth" report from Wells Fargo Securities LLC Retail Equity Research Department.
Many consumers are also considering adding vitamins or supplements to their diet. Forty-five percent indicated that they are, and within this group, the most popular supplements people are considering adding included fish oil and omega-3s (31 percent) or a multivitamin (29 percent), followed by calcium (18 percent), a weight loss supplement (16 percent), joint support (16 percent), vitamin D (16 percent) or an antioxidant (15 percent).
Physician recommendations were the most important factor in the decision to take a supplement, but research studies are also key. The report noted people most rely on recommendations from their physician, (42 percent) research studies and articles (37 percent), and recommendations from friends or family (16 percent), much more than information from television or newspapers (4 percent), or recommendations from a vitamin store associate (2 percent).
Price (43 percent) was the most important factor in determining where consumers buy multivitamins and supplements followed by convenience (25 percent). Other factors noted by approximately 10 percent each were product selection, product reviews and ratings. Interestingly, shipping cost and shipping speed were not viewed by nearly any of the panel as the most important factor in where they purchase their multivitamins and supplements.
Drug and grocery stores are still getting a large share of supplement purchases, suggesting plenty of room for a shift to specialty retailers, according to the report. Many consumers in the survey indicated they still purchase multivitamins and supplements at a traditional grocery store (39 percent) or the drug store (38 percent). Wells Fargo said this suggests that the category is still in the early innings of a shift to specialty stores or online retail.
About 15 percent of people surveyed indicated they buy multivitamins or supplements at a natural foods or grocery store; 10 percent of the sample indicated that they purchase vitamins or supplements at a GNC store location. Seven percent of the panel purchased vitamins and supplements on Amazon, which ranked higher than V itaminshoppe.com, Vitacost.com or GNC.com.
Consumers are changing where they buy their supplements from traditional supplement sores such as GNC and Vitamin Shoppe to companies like Amazon and Vitacost.com, according to a the report. Wells Fargo found Amazons core product prices were approximately 15 percent below those of both Vitamin Shoppe and GNC. Amazon shows up much more frequently and ranks better than GNC and Vitamin Shoppe in natural search, showing up on the first page of natural search results for 88 percent of terms, versus only 55 percent for GNC and 38 percent for Vitamin Shoppe. And Amazon appears to be more aggressively bidding for paid search terms in this category than other retail categories, showing up in the top three paid search results for 33 percent of the terms searched, versus only 2 percent of terms in a similar analysis of the sporting goods sector.
The report said GNC is better positioned against Amazon than Vitamin Shoppe and poised to benefit from growth in online, with its high penetration (57 percent) of unique, proprietary products, a dual strategy with private-label geared gnc.com and price competitive luckyvitamin.com (the prices of which were at parity with Amazon), more flexible real estate (five-year leases, versus 10-year leases at Vitamin Shoppe) and less reliance on new store growth.
Vitamin Shoppe, on the other hand, is more exposed to Amazon, with less insulation from private label, neither the best prices, nor the best selection and less cushion in its retail segment if sales shift online.
Find out more research on supplement marekting on INSIDER's Market Data Topic Page.
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