With the growing investment required for launching new products in the U.S. supplement market, it has become increasingly important that each product deliver on expectations. Whether launching new products, sustaining the lifecycle of maturing products or moving into a new distribution channel, a keen understanding of the targeted consumer is necessary.
During the past few years, the behavior of consumers has changed rather dramatically. Today’s population is driven by far more than just the state of the economy. With greater access to the Internet, consumers are more educated about supplements, have higher expectations and exhibit a renewed sense of environmental consciousness. These and other changes in the marketplace have impacted what can be identified as “key success factors” for health and wellness products.
Clear & Compelling Benefit
The product must provide a benefit that addresses an unmet consumer need. An unfortunate reality of health and wellness in the U.S. is that there is an ever-increasing incidence of health issues related to poor lifestyle and behavior choices. Certainly not easy to change, this has led to an epidemic of the comorbid conditions of obesity, diabetes, elevated serum lipids (like cholesterol) and possibly osteoarthritis.
Additionally, with the growth of the Baby Boomer segment, the demand for solutions to issues associated with aging is on the upswing. Even though the concept of “beauty from within” is not new, the demand for anti-aging products is just taking off. In addition, other common health issues that present with aging include declining cognition and memory, mental focus, eye health, energy and immunity.
One of the many challenges facing marketers is the ability to communicate the benefit of an ingredient or product to the consumer. Consumer awareness of the benefits afforded by some more popular or common nutrients, such as glucosamine, omega 3s or antioxidants, are fairly well known. Awareness of some of these benefits has been facilitated by the approval of heath claims. Other emerging compounds like pre- and probiotics, peptides and newly introduced antioxidants often rely on more general structure-function claims. The benefit of these claims is increasingly important for ingredients with low consumer awareness.
Recent consumer surveys have shown that safety is the #1 product attribute affecting consumers’ purchase decisions for supplements. Consumer concern about the safety of dietary supplements is not new. However, it has intensified during the past few years through negative media coverage of products not delivering on label claims or poor quality of certain imported ingredients.
Another upward trending concern for safety from the consumer perspective is increased awareness of the potential for interactions between supplements and Rx or OTC medications. This concern should be clearly addressed in product messaging, particularly when the risk exists.
Historically, the power of “the story” has played a significant role in the marketing of supplements. However, as marketers try to reach the emerging “mainstream” consumers, the importance of clinical substantiation becomes increasingly important.
Consumers’ quest for substantiation is stronger for products offering preventative or long-term benefits. When consumers “feel” a benefit, compliance and continued usage is more likely, for instance, after a course of glucosamine therapy for joint pain. Conversely, when the benefit is long-term, such as with preventative health products, consumers need to be assured, preferably through sound research, that the product is delivering the intended benefits. Believability of the benefit may be supported by such authoritative sources as a healthcare professional or trusted media sources.
This success factor contains a fairly broad group of elements that includes, for example, consumers’ eating and purchasing patterns, pill consumption, product applications, sustainability, preference for organic/natural/vegetarian and convenience.
Sustainability has significant influence on the dietary supplement industry. Notably, in addition to focusing on post-consumption issues like recycling and reusable and biodegradable packaging, consumers are exhibiting increased interest in pre-consumption. Pre-consumption includes interest in locally grown foods and reducing “food miles” or otherwise addressing the environmental impact of getting food to consumer. Other trends affecting sustainability include the use of renewable power and pollution control in manufacturing, fair trade and a companies’ corporate social responsibility (CSR) commitment.
While at present most U.S. supplement consumers prefer “capsule” forms for their dietary supplements, a growing number are looking for alternative formats. Certainly, some consumers prefer that the functional ingredients be formulated into foods they know and enjoy. It appears that young adults are more interested in functional food delivery forms compared with older generations. This may be influenced by their early exposure to nutritional bars, shakes and other convenience foods during childhood.
Convenience continues to play an important role in purchase behavior. From the proliferation of energy shots being sold in convenience stores to the growth of such value-priced online marketers as VitaCost, consumers are looking for convenient, one-stop shopping.
One of the more notable convenience-driven consumer behaviors is use of the Internet as a point of purchase with its potential for quick access to information on health issues as well. For example, the percentage of consumers shopping for health products over the Internet has increased quite dramatically during the past decade, according to some surveys, from less than 10% just 10 years ago to more than 50% of consumers today.
One approach to attracting consumers in these emerging channels is providing value-added services. For instance, consumers are often very confused when it comes to making their dietary supplement selections. So they often turn to the Internet as a source of unbiased information. However, most consumers feel commercial websites are biased and self-serving, and do not offer a balanced perspective. One way to address this issue is to provide accurate information through a reputable spokesperson.
Based on several large consumer surveys it is clear the economic downturn has had a significant effect on dietary supplement usage. It appears consumers are buying fewer supplements. And if they are buying, they’re looking for less expensive and private label products. Only certain groups of consumers trust reputable brands and are willing to pay a premium for these products. Loyalty programs represent one way to hold on to the established consumer base today and expanding it for tomorrow.
There are several reasons for consumers’ preference for dietary supplements over the pharmaceutical alternatives. These reasons include, for instance, the absence of negative side effects. Also, when comparing the cost of dietary supplements, prescription medications have historically had the advantage of minimal co-pay supported by insurance companies. One way insurance companies are adapting their pricing to the new economy is increasing user contributions to prescription co-pays. In this case and with an increase in the uninsured population, the healthcare value proposition is beginning to shift toward the self-care model, at least when addressing minor health issues.
Superior Sensory & Organoleptics
One element of this success factor is taste but it more broadly encompasses texture, color and smell. For instance, organoleptics may include mouthfeel and the “throat catch” associated with high fiber products or the “aftertaste” often associated with consumption of some vitamins and fish oil products. In the past few years, food scientists have been quite successful at remedying these effects.
Now more than ever, consumers are not willing to sacrifice taste for health benefits. This is especially true of products providing preventative health benefits. In addition to the high degree of trust in efficacy required of preventative health products, nutraceuticals must have superior sensory traits to ensure compliance and continued usage.
Product developers and marketers must take these key success factors into account when formulating and developing their marketing messages. In today’s competitive global environment, it is paramount to understand the rapidly changing consumer and market dynamics, particularly when moving to new channels of distribution or targeting a new consumer segment. With clear objectives and identification of white space in the market, all supported by appropriate research, companies can position themselves to provide superior consumer-focused solutions and benefit from a successful product launch.