Are There Too Many Nutritional Supplement Brands?
If you spend any amount of time around industry events or targeted social media pages, you have likely heard…
“There are way too many brands today!”
…from brand owners, brand employees, retail shop owners, and every other stakeholder in the industry.
So, is there actually too many nutritional supplement brands?
I mean it certainly feels like it. Regardless if you are a stakeholder that looks at the industry from a science or marketing side, they both have been infiltrated by this proliferation in brand creation in the last 5 years. This has been caused by low barriers of entry in both national distribution (direct to consumer and Amazon) and national marketing (social media). This causes a slew of competition that creates noise and spikes different market economics.
Feel is one thing but what about the facts. Lets look at the economics definition of market saturation.
Market saturation is when sales of a product (or service) has reached the point that customer needs have been met. The term implies a situation in which sales growth is unlikely.
Is there still sales growth in the nutrition supplement industry?
Yes, this functional CPG category has 6–7% CAGR globally.
Are customers needs being fully met?
No, I believe there are several shifts that are not currently allowing that definition objective to be fulfilled either.
The easiest shift to note is with the digital channel growing at about 13% YoY for the last five years. The second one is from the growing assortment and expanded merchandising build-outs in the Food, Drug, Mass, and Convenience (FDMC) channels. These commerce shifts should not be understated as they are causing the different product shifts listed below.
What these industry stakeholders are actually saying this the industry feels “the same”…
I agree with that statement. The industry (for the most part) is stale right now!
I think the reason for staleness comes down to a number of areas but I think a big one is that the choices of product development inputs (raw materials and packaging) are largely the same. Think about this comparison…you can make millions of different Chipotle burritos with their ingredients but if you want to throw in something crazy like bacon, you can’t easily do that, well not yet!
Yes, you might find a lesser known combination and there are differentiation points with creativity of outputs (branding and marketing) but even those are getting competitive. Its now about putting all the pieces together in a cohesive brand identity.
This cohesive brand identity is paramount and done by creating a seamless unique customer experience, product, and brand positioning. If done right, it will be an exclusive experience that creates opportunities for your brand to be a deeper part of consumers lives.
How do you create these exclusive experiences?
(Note: these are not easy to create but here are some examples…)
- Flavors — Do you have access to exclusive licensed flavors? Do you have access to unique flavor systems that are elite-level and exclusive to you?
- Ingredients — Do you have access to exclusive licensed or trademarked ingredients? Do you have access to vertically integrate to create these ingredients yourself?
- Packaging —Do you have access to exclusive packaging that adds value to the product? Do you have any patentable packaging available?
- Shopping Experiences — Do you have access to different exclusive fulfillment options? Personalization in products? Customization of products?
These types of examples might not seem feasible in the market but they are out there waiting to be the biggest brands in the future!
Prefer to watch a video on this topic? Click on the embedded YouTube Video from my channel below!