We’ve all heard the saying “the trend is your friend.” When it comes to the dietary supplement market, there are multiple trends currently converging that create opportunities to build your brand, grow sales and increase your margins.
As we know, consumers are increasingly turning toward natural ways to stay healthy. While this is driving growth in many sectors of the supplement industry, it is also requiring companies to focus on safety and quality more than ever.
In addition to seeking natural ways to support their health, consumers are becoming increasingly aware of what is actually in the products they are purchasing. Although the Internet provides terabytes of information to support inquisitive buyers, that information varies dramatically in terms of credibility and accuracy.
So how do you turn this trend into a competitive advantage?
First and foremost, if you create a quality product, let the world know. In The Natural Marketing Institute’s (NMI) recently completed Supplement/OTC/Rx Consumer Insight Survey, the number one criterion affecting purchase decision for dietary supplements was “unquestionable safety”—62% of dietary supplement users report that safety is very important in their purchase decision process. This contrasted with “price,” which was selected as “very important” by more than one-half of respondents.
As important as safety is to consumers, today only 21% of the general population (22% of supplement users) feel “herbals/botanicals” are “very safe.” This compares to 42% of supplement users who rate “vitamins/minerals” as very safe; 16% for “condition specific supplements” (see Figure 1). Interestingly, just 19% of consumers give “OTC” medications their vote of confidence “very safe,” while 29% give Rx drugs a “very safe” rating.
What Defines a Safe and Pure Product?
Consumers want their supplements to be safe and pure. So, what defines a safe and pure product?
While the federal cGMPs generally address steps to ensure the safety and quality of products produced, it’s California’s Proposition 65 (The Safe Water and Toxic Enforcement Act of 1986) that provides more quantitative guidelines.
Essentially, Prop 65 was enacted in the state of California to protect consumers from chemicals known to cause cancer or reproductive toxicity. While there is nothing to preclude a company from selling supplements containing more than the “safe harbor” level, there is a pre-condition—they must put warning language on their labels. As an example, the warning label would read like this: Warning: This product contains a chemical known to the State of California to cause cancer. Clearly, this is a show-stopper.
Testing for heavy metals (raw ingredients and finished products) in supplements is much more than just a good idea. Understanding the cleanliness and purity of the ingredients you purchase and the products you produce is paramount to pricing, vendor selection and ultimately consumer satisfaction.
When it comes to supplements, Prop 65 can be distilled down to four words—mercury, lead, arsenic and cadmium.
In terms of compliance, there is no agency responsible for monitoring Prop 65. Instead, anyone can enforce it. Prop 65 can be enforced by the government or a private plaintiff. Another item to consider is that there doesn’t need to be evidence of harm—the burden of proof is on the defendant.
A good way to build confidence with consumers and ensure compliance is through third-party validation. Third party validation can be cost effective and extremely powerful. Consumer Reports, Amazon Reviews and JD Powers & Associates are just a few examples of this. Consumers want to know your products are really as safe and pure as you say. Frontier Global Sciences and US Pharmacopoeia (USP) are among the laboratories currently providing certification and verification programs.
Embracing the demand for safety and quality can be both an offensive and a defensive strategy. Whether warranted or not, we all saw what happened with Toyota. Based on the public’s perception of safety taking a backseat to profits, sales came to a screeching halt almost overnight. Manufacturing plants had to significantly reduce or eliminate output to make up for lack of sales.
When it comes to leveraging the quality of your products, a good first step is to see what the market thinks. Thanks to Web 2.0 and the prolific growth of self-publishing on the Internet, you can now be a “fly on the wall” and listen to what consumers are saying about you.
If you are interested in monitoring your brand on the Internet, there are companies that can assist you and, generally speaking, do a great job. However, just like consumers are taking more responsibility when it comes to their health, we suggest that every company start an in-house brand monitoring program.
Here are a few free tools to get you started:
Alert Rank: Some of you may already use Google Alerts. They do a wonderful job of tracking what everyone is saying about any word or phrase you desire, however, they are often TMI (too much information). Combine Google Alerts with Alert Rank and you’ve tamed that animal. Alert Rank not only coordinates all your Google Alerts into one “bucket,” it also ranks them, creates a daily PDF report, and allows you to export them in a spreadsheet for easy sorting. If you are going to give Alert Rank a try, I’d suggest getting their free series of e-mail tutorials on setting up Google Alerts.
HootSuite: This is another powerful yet free application (at least at the time of this writing). Essentially, HootSuite does for Social Networks (Twitter, Facebook, Linkedin, etc.) many of the things that Alert Rank does for Google. They seem to be adding functionality by the day. This application allows you to keep track of discussions, influencers, traffic and so on.
Focus on Safety & Quality: Consumers are demanding it and the regulatory drivers will continue to grow. Use it to your advantage.
Quantify your Quality: Cost effective testing is now available that enables you to verify or certify the quality of the products you produce.
Build your Brand: Communicating the safety and quality of your products is a key to brand differentiation, growing sales and increasing margins. Building safety into your strategy, messaging and collateral material will build a strong and loyal following.
Business Insights: Safety & Quality: A Competitive Advantage
Learn how to use the safety and quality aspects of your products as a marketing tool.
By Greg Stephens & Tom Poole
Published April 1, 2010