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Online vitamin sales plateau: TABS Analytics study

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SHELTON, Conn. – Mass market brick and mortar stores, like Walmart and Target, and eCommerce retailers have seen the most success in attracting buyers of vitamins, minerals and nutritional supplements (VMS), according to the TABS Analytics 12th Annual Vitamin Study.

However, after more than doubling in the past decade, overall online penetration has plateaued at about 17%. This stagnation in online purchasing leads to questions about whether eCommerce can ever exceed more than one-fifth of the total market in any consumer package goods (CPG) categories.

“VMS is unique compared to health and beauty categories (HBC). While mainstream with broad consumer appeal and concentration in mass market outlets, VMS stands out with its significant brand and segment fragmentation, and high eCommerce share,” said Kurt Jetta, executive chairman and founder of TABS Analytics. “We believe VMS is a bellwether for the overall opportunity for CPG products in terms of online market share and see the current stagnation as a warning sign for eCommerce in general.”

The 2019 Vitamin Study is TABS Analytics’ 12th annual look at the types and frequency of vitamins and nutritional supplements consumers are buying, and the outlets from which they were purchased. The study was conducted in the spring of 2005 and 2008, and then for the past 10 consecutive years starting in 2010. In addition to looking at year-over-year changes, TABS Analytics this year identified the top trends it has seen over the past 10 years:

Top 10 VMS Trends of the Decade

• Growth and Peak of eCommerce – Approximately 20% online share appears to be the ceiling, and if VMS cannot achieve a larger share, TABS believes that has major implications on eCommerce in the CPG space overall.
• Infusion of Mainstream HBC Companies into VMS – While these companies offer greater stability and credibility, they lack “edgy” innovation, which will have a moderating effect on the category.
• Growth of Specialty Supplements – Several high dollar products – like melatonin and probiotics – are gaining share and drawing in heavy buyers as well as younger buyers.
• Continued Strength of Mass Market, Particularly Walmart, Despite eCommerce Gains – There has been much discussion about the Walmart vs. Amazon battle for share, but what sometimes gets lost is that both can continue to grow without taking share from the other. With the growth of these two market leaders, there will be some channels – such as club and drug stores – that are negatively impacted.
• Decline in Heavy Purchasing by Older Women – The recent drop off in purchase type and frequency by this key demographic has implications for the product mix, which is evidenced in fewer purchases of fish oil and calcium, two products targeted toward this specific demographic. And with more purchasing frequency by the 18-54 demographic, other products, like melatonin and probiotics, have increased.
• Temporary Effects of Negative PR – Over the last 10 years, a variety of product types – multivitamins, Vitamin E and melatonin, to name a few – have suffered from negative press that caused sales to drop. However, as we see these product types rebounding, it’s clear that reinvention is possible.
• Declining Share in the Specialty Channel – VMS-focused specialty retailers put a strong focus on innovation. As share of transactions in these outlets declines, TABS believes that product innovation will suffer.
• There are Limits to the Form of Innovation – Gummies were thought to be a game changer that would eliminate those consumers who didn’t want to swallow pills. But there was minimal growth with the introduction of gummies, which really only shifted sales.
• Buyer Counts Grow – 20% growth in buyer penetration was driven by broader demands for variety in the category, and thus more SKUs, not increased velocity of existing items.
• Concentration of Power Players in Broad Line – A select few brands, such as Pharmavite, Nature’s Bounty, Nature’s Way, Natrol and emerging player Piping Rock, are crowding out minor players.

Other key findings for 2019 include:

• Regular Purchasers of Vitamins Declining – Overall the VMS category dropped slightly in 2019, with regular purchasers decreasing 2% year-over-year. The number of women aged 55+ who purchase 6 or more types of products annually continued to slide since reaching its heights in 2012, and contributed to a decline in Vitamin D and calcium sales.
• Adult Multivitamins Reign; Probiotics and Melatonin Trend Upwards – Adult multivitamins far outpace purchases of any other supplement, with 52% penetration. Melatonin saw the biggest gain of any supplement, increasing from 9% to 13% year-over-year, bringing it into the Top 10 product types in terms of buyer count.
• Big Three Remain Dominant – Walmart, Target and Amazon have seen the largest gains over the past decade in category buyer count, while club retail buyers declined. Mass market brick and mortar dropped in share of mentions during the past year, with specialty brick and mortar stores recapturing what they lost in 2018. Walmart and online rank highest, with about 19% share of transactions each.
• Amazon Dominates in Online, While Walmart eCommerce Tanks – With more than one-third of all online purchases, Amazon ranks No. 1 online, followed by a highly fragmented market. Walmart saw its share of mentions drop by more than half year-over-year.


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