SHELTON, Conn. — Sales in the Vitamins, minerals and supplements (VMS) market rose 3% to about $11.8 billion in 2014, fueled mainly by mass retail chains, particularly Walmart, Costco and Rite Aid, according to the TABS Group.
Also, 2014 marked the first time in eight years that Amazon and other online retailers saw a share drop in VMS category sales, the TABS Group’s Eighth Vitamin and Sports Nutrition Study found. The survey of 1,015 U.S. adults examined the types, frequency, and outlets where VMS and sports nutrition products are purchased.
Last year, combined VMS sales for Walmart, Costco and Rite Aid totaled $3.4 billion, representing 29% of the category’s sales. Mass market has recaptured lost share from 2014 because of a surge in market penetration among light buyers, defined as purchasing one to two types of vitamins, according to TABS.
The researcher cited several reasons for consumers’ swing to mass retail chains for VMS. For one, the study showed that consumers find these outlets much more convenient and accessible than specialty outlets, with light buyers skewing their purchases strongly to mass market outlets. In addition, some heavy buyers, defined as purchasing three to five types of vitamins, have become light buyers, making them more likely to shop at mass chains because they have stopped buying certain types of vitamins.
Yet retailer promotions may be the chief reason for the market switch, noted Dr. Kurt Jetta, president and founder of TABS Group.
“The channel shift from online to mass market affirms the importance of retailer promotions in driving sales. If compelling deals are not available, many consumer just won’t buy,” Jetta explained. “Our investigation of online promotional practices suggests that online outlets are not competitive promotionally.”
Vitamin specialty, grocery and Sam’s Club outlets all saw a drop in share versus 2014, TABS reported. Lower and less aggressive promotional activity was cited as a cause for sales softness among some specialty retailers in their public earnings announcements, the researcher added.
In 2014, online vitamin sales came in at $1.9 billion, topping Walmart’s sales of $1.7 billion. However, online’s share of occasions in the vitamin category dipped from 9.9 in 2014 to 9.7 in 2015, the first time that online share has dropped since the inception of the TABS survey in 2005.
Pure-play online retailers saw their VMS share surged to 80% of online sales from 67% in the last two years. Amazon alone had 36% of all online sales.
“All online outlets saw declines, with the primary cause being the drop in sales among heavy buyers. Amazon’s decline in share was much less pronounced since it draws a disproportionate amount of its sales from light buyers,” Jetta stated. “The decline in online share is the second sector TABS Group has tracked with the other being consumables. Given that vitamins is among the most highly developed online categories in the consumer packaged goods [CPG] industry, this study adds an important data point that suggests online sales in CPG have peaked with the existing online shopping technology.”
TABS’ survey also revealed that the sports nutrition segment presents an opportunity for growth. That market generated an estimated $2.6 billion in sales for 2014, with 50% all purchases occurring in mass retail outlets.
Thirty-seven percent adults purchased a sports nutrition product in the past year, the study found. Those ages 25 to 29 accounted for the highest category penetration rate, at 63%, with a gradual drop-off occurring in light buyers at age 30 and a sharp drop-off at age 60. There’s also a sharp drop-off of heavy buyers at age 40.
Within sports nutrition, men represent 50% more of the heavy buyers than women, and Hispanics are two times more likely to be heavy buyers than non-Hispanics. Among adults in the core 18 to 44 age group, 74% of Hispanics have purchased a sports nutrition product in the last year, compared with 50% of non-Hispanics.
“The results from the survey highlight that sports nutrition is a category deserving of more space and support in mass market outlets. With half of all sales already occurring there, that number has considerable upside, particularly given retailers focus on millennials,” Jetta observed. “Furthermore, unlike almost any other category of CPG, sports nutrition is an efficient way for retailers to appeal to Hispanics.”