Vital signs strong for nutritional options

Drug Store News, Oct 9, 1995

An aging and vast population of time-stressed workers and a desire for home health-care products are behind a surge in sales for nutritional food supplements, a category that commands a tremendous degree of consumer loyalty as well as providing retailers with healthy profit margins.

Unlike other meal-replacement or sports body-building beverages, like Carnation, Slim-fast and Joe Weider beverages, the new breed of liquid nutritional supplements claim to provide balanced nutrition in beverage form. These new supplements are meant to be a supplement or complement to solid foods, not a replacement, since the goal of using these products is to maintain body weight and improve nutrition.

"There's a real need in the market today for nutritional beverages that not only pack in all the essential vitamins and minerals, but that also taste good," said Scott Vertrees, executive vice president, chief financial officer of American White Cross Inc., Dayville, Conn., which recently acquired the Nutri-Need liquid nutritional supplement line to complement the company's lines of primarily private-label health and personal care products.

"We also saw an opportunity to leverage the distribution we have through supermarkets, drugstores and discount chains with home health care products that fit with what we are already selling," said Vertrees.

The liquid nutritional supplement category grew at a rate of approximately 34% last year to nearly $330 million in retail sales, according to Nielsen figures provided by American White Cross. Ross Laboratories, which markets Ensure, is the market leader. This emergent category is already roughly 50% greater in size than the entire adhesive bandage market, according to American White Cross.

"The bottom line is that Americans don't always eat well, and there's a real need for healthy foods that allow the body to perform optimally and that also taste great," said Charles Kosmont, president of Met-Rx, Irvine, Calif. "Not many people are interested in a strict diet program anymore. Consumers want foods that are better, that are healthier, but also fit into their lifestyle."

Met-Rx markets a line of low-fat, high vitamin and mineral nutritional foods that currently consist of vanilla and chocolate Met-Rx bars and drink mix powders that can be blended with milk or juice to make a shake. The company is also developing a Met-Rx pizza and cheesecake, Kosmont said.

Met-Rx currently is stocked by Thrifty PayLess and Walgreen's in the drugstore field. And with recent expansion into Venture, Caldor and Target, the company is aggressively pursuing the discount sector.

Nutritional supplements are now most often found next to Slim-fast and related products, sports-nutrition items or incontinence paper products in supermarkets, drugstores and discount chains. Retailers said they have seen a sales slowdown in diet aids, and the nutritional supplements are taking up the slack.

But both Kosmont of Met-Rx and American White Cross' Vertrees believe that in the future these products will be merchandised in retailers' home health care aisles, such as the department recently developed by Osco/Sav-On.

"We're not going after a specific age group or a specific population segment that might need an incontinence product," said Vertrees. "These are supplements that everyone could benefit by using."

Nutritional supplement companies point out that with products commanding prices in the $6 to $8 range, retailers stand to pull in high profit" for every stockkeeping unit sold. "Retailers are looking for categories with good growth potential and high profit margins, requirements that our products fulfill," said Met-Rx's Kosmont.