A market for the taking?

With sales growing and consumer interest rising, Strategy's experts say the right marketer could take the supplement field by storm

In North America’s ever increasing quest for better health, the focus has tended to fall on food and what can happen if you don’t eat right. However, vitamins and herbal supplements are becoming a staple of the health conscious, and the category is growing rapidly: sales of nonprescription drugs, vitamins and supplements increased by 32% between 1997 and 2002, according to Statistics Canada. And ACNielsen MarketTrack data reveals volume sales of adult vitamins for the year ended Feb. 21 are up 6% over the previous period. Consumers are popping pills like never before and marketers are taking advantage.

Dawson Creek, B.C.-based HPI Health Products markets the Lakota brand of herbal supplements (for joint and muscle pain) and is currently running a national TV campaign with two spots that focus on the effectiveness of a natural approach to healing.

One ad is done testimonial style and features an elderly Native Canadian man extolling the virtues of Lakota. The other features Lakota’s developer Rick Stewart naming the ingredients in a Lakota product and urging consumers to use it for easing arthritis and muscle pain. The ad is nothing fancy – Stewart is dressed as a cowboy and is filmed standing in front of a corral – but Kelli Robinson, marketing manager for HPI, says it’s working.

‘Many people have found that use of prescription medication has only masked symptoms and in many cases caused more problems that the original health challenge. People are looking for ways to support the body’s natural tendency toward wellness and balance.’

Robinson says the target is primarily those 45 years of age and older.

Not everyone is enthralled by HPI’s creative for Lakota and it’s decidedly low-tech look. ‘The Lakota stuff looks so cheap,’ says Mark Weisbarth, president of Toronto-based Due North Communications. ‘The look of the brand is very cool but then they get these people to say, ‘I’m Rick Stewart.’ Who the hell is Rick Stewart? At least identify yourself and say, ‘You may not know me but I’m the guy who developed blankety-blank.”

Others, such as Philippe Garneau, executive creative director of Toronto-based GWP Brand Engineering (which has the Buckley’s account, among others), are more forgiving. ‘The thing you have to remember about the audience is that if the price is right and the distribution is there, [Stewart] comes across as honest. These are things we forget if you live and work in Toronto in the advertising industry and you gauge your answer as to whether or not it’ll please your peers.’

He says the ads are very ‘sticky.’ ‘It’s definitely cutting through.’

Other marketers such as Wyeth Consumer Healthcare, Swiss Herbal Remedies and Jamieson Laboratories are also running advertising campaigns, with Wyeth recently breaking a new campaign for its Centrum Performance line of vitamins.

Meanwhile at retail, small displays have developed into huge in-store boutiques as consumer interest in supplements continues to swell.

‘Health food supplements and vitamins, natural foods and organics are all growth categories for the retail grocer so more shelf space is being allocated,’ says Nick Jennery, president and CEO of the Canadian Council of Grocery Distributors.

The $17.7 billion North America market for vitamins (according to MarketResearch.com) has moved from the exclusive domain of health food stores and pharmacies to include mainstream grocery stores and even retailers like Wal-Mart.

‘The vitamin and supplement industry is on the rise,’ confirms Geoff Wilson, VP industry and investor relations of Toronto-based Loblaw Companies. ‘Multinational companies are now getting involved in the holistic industry. Consumers are looking for alternative therapies for their traditional medicine.’

Loblaws introduced Natural Value Departments (NVDs) to its stores about five years ago. Wilson characterizes them as ’boutiques.’ ‘They are staffed with people who know the business and who can explain to you what echinacea is. We see a lot of our customers trying out a lot of the products.’

How is it doing? While he won’t reveal specific figures, Wilson describes the growth of the category as ‘strong.’

At Shoppers Drug Mart, which has sold vitamins for years, Arthur Konviser, SVP, corporate affairs, characterizes growth as steady.

‘We’ve seen a lot of retailers and an array of product come into the market that were not around 10 to15 years ago. What we’ve also seen is a spike in a lot of the products which weren’t around 15 to 20 years ago – the Saw Palmettos, echinaceas and things like that.’

While neither Shoppers nor Loblaws is making a concerted effort to market vitamins beyond increasing floor space, Loblaws does integrate its NVDs into a broader health marketing strategy by having Natural Value Department specialists appear at its cooking schools to talk to consumers about vitamins. For its part, Shoppers continues to rely on circulars but also makes an effort to train its pharmacists to recognize contraindications (possibly harmful mixes) in vitamins.

Konviser says having trained pharmacists on hand is a significant point of differentiation for Shoppers. ‘Some of the health food stores sell these things and make some outrageous claims which are not altogether appropriate.

‘They also do not know the patient’s health-care regimen and [there can be] contraindications between what they’re taking and [a particular] vitamin.’

Strategy lassoed two agency types and a consultant to break down the ingredients that will make consumers choose one brand over another when vitamin A looks like vitamin A looks like vitamin A.

Philippe Garneau, executive CD, GWP Brand Engineering, Toronto

The brand with the most relevance wins. Vitamins are broader than they used to be. They used to be a way to make up for nutritional deficiencies. Now the world of vitamins has some credibility for being able to actually do other things. So there’s room for a big brand to sit astride the market.

There might also be room for brands that market vitamins [for purposes] other than iron deficiencies or providing vitamins A or C. [For instance], there’s an athletic brand that talks about oxidants. Then there’s the brand for the over 50s – the Centrum Silvers and what have you. So I see the possibility of creating a whole bunch of different silos for vitamins. But the winner will be the brand that most clearly enunciates its motives in wanting to do this for you. Credibility is going to be really important.

Right now I haven’t seen anybody in support of a large-scale campaign. So that door is open. Somebody could say, ‘Let’s not just do a once-in-a-while ad. Let’s do a sustainable highly branded campaign’ so that [the consumer will say], ‘I just have to look at Life brand because they’ll have it.’

Good branding will be the strategy [to eliminate consumer confusion]. The consumer wants to know that they’ve exercised choice but they also want the brand to give them sanctioning rationales that say, ‘We [offer] this kind of experience.’

Kevin Brady, president, Anderson DDB, Toronto

(Anderson DDB creates the advertising for Wyeth Consumer Healthcare’s Centrum brand of vitamins.)

I don’t believe [vitamins are] a commodity at all. Branding is a super-large issue – the benefits of the brand, the segmentations that they talk to, the quality of the product itself and then the advertising. You have to take all of those things into consideration as well as shelf position, display, pricing and promotion.

You have to be aware of all the advertising standards and issues. We just launched a brand called [Centrum] Performance and we’d like to say more things, but because of the current regulation we aren’t able to.

Price advantage is what [private-label brands like Shoppers' Life] have going for them. But price is only part of the issue. It’s the quality of the brand, it’s the contents, the people who make it – all of those things add up to the branding and brand persona and consumers value that.

[For Centrum] personality is [necessary for branding], but also it is about benefits, [vitamin] contents, the fact that it’s coming from a quality manufacturer, and that it has a long-standing heritage as a leadership brand.

Yanni Papanikolaou, director of nutritional strategies, Nutritional Strategies, Toronto

(Nutritional Strategies is a health consultancy that specializes in health-related marketing.)

[Marketers] are always looking at data to see what really drives consumers to purchase these products. For example, one of the things they’re looking at is the benefit of having certain statements or claims on the packaging. Consumers are becoming more aware of why these nutritional ingredients are important.

Women are more likely to say they will buy a product with a statement like, ‘provides essential nutrients and is important for bone health’ or ‘endorsed by the Association of American Physicians.’

Some companies are starting to use [clinical studies] in their marketing campaigns [to differentiate themselves] because one of the things that consumers are not aware of is that certain processing destroys the active ingredient in the supplement.

A lot of people think they can take as many vitamins as they want and the more the better. But there are certain toxicity levels that consumers and marketers should be aware of.

For more on marketing heath products in Canada, come to Strategy’s first ever Innovation in Health & Beauty Marketing conference, taking place on May 10 & 11 in Toronto. See www.strategymag.com/hnb/ for more info.