One-third of British women and a quarter of men take health food supplements, and of those that don’t, a large percentage are not receiving the recommended daily allowance. According to the Health Supplements Information Service (HSIS), six out of 10 women and three out of 10 men took steps in 2004 towards a healthier diet – and some people went to extraordinary lengths to achieve this without eating vegetables. For many of these converts, supplements are the way forward. Geoff Collins, brand manager, sales and marketing at Vitabiotics, a manufacturer of nutritional products for specific health conditions, says: “The sector is growing as more people realise their diets are often lacking in vital nutrients and because at various times in our lives we need extra nutrition, for example during pregnancy.”
The Proprietary Association to Great Britain (PAGB), which promotes responsible consumer healthcare, valued the VMS market at £321m at the end of 2004, compared with £270m in 2003. Seven Seas is the brand leader with a 25% share of the market, followed by own label. Of all the VMS products available, Seven Seas says cod liver oil is one of its strongest. Seven Seas UK and international marketing director Tom Hardman says: “Recent Taylor Nelson Sofres data shows that more than one-fifth of the UK’s population now regularly takes a fish oil supplement. As a result, our cod liver oil goes from strength to strength.”
Fish oil supplements are a source of Omega 3 essential fatty acids (EFAs) which have anti-inflammatory properties and help prevent heart disease, among other things. The typical western diet is often deficient in essential nutrients, and because Omega 3s are needed by every cell in the body, including the brain, it is considered vital to maintain sufficient levels.
Hardman adds: “Increasing evidence suggests children’s brain development in relation to concentration and learning abilities is affected by Omega 3 intake. A classroom study in 2004 demonstrated an average of 35% improvement in children’s concentration and learning behaviour after six weeks of taking Haliborange Omega 3 children’s syrup.”
Research from Datamonitor has found Omega-3 fatty acids are even being added to food and drink products, like sliced meat and yogurt drinks, in both Europe and the United States.
Multivitamins are also popular supplements due to the fact they provide a variety of supplemental nutrients in a single product. This gives them a lot of selling power. Seven Seas’ Hardman confirms: “Our latest multivitamin product, Multibionta, is one of the fastest-growing brands in the convenience sector as more and more busy consumers seek simple, all round options for managing their day-to-day health while leading increasingly hectic lives. Multibionta is driving growth in multivitamins and has more than a 10% share of this rapidly growing category.” But the key for c-stores is to offer variety. Hardman adds: “To generate and maintain sales, retailers need to go where the market is: multivitamins for hectic lifestyles; products catering to the older population; and children’s Omega 3 fish oil supplements. Stores in urban areas especially could benefit from stocking multivitamins, with a higher than average proportion of working women juggling busy lifestyles.”
Consumers are just as likely to support their healthy lifestyle with complementary health products. The sector is worth £145m and includes herbal medicines, homeopathy, acupuncture and Chinese medicine.
Herbal medicines account for 60% (or £65m) of the market and are growing by 15% year on year. This rate of growth is predicted to continue into 2008. “One in four people in the UK tried one complementary medicine at least once in the past year,” explains Steve Elting, managing director of Potter’s, which manufactures herbal medicines. “People want to try natural products that are perceived to be better for them than conventional medicines.”
Mintel’s British Lifestyles Report 2005 confirms the trend. It says that while 11% of consumers prefer using alternative medicine, 32% are prepared to look into using these treatments. As a result, complementary medicines are booming: sales have risen by 45% since 1999.
Mintel director of research Paul Rickard says: “Growing consumer awareness has encouraged an influx of new products to feed demand. Certain therapies now have a place alongside conventional treatments to the extent that even a growing number of GPs are prepared to refer patients to complementary practitioners. Manufacturers and retailers have also responded to the escalating market by including herbal treatments alongside conventional options on the shelves.” However, if these figures aren’t enough to tempt retailers then perhaps the sales margins are – at around 33%, they’re attractive.
Says Elting: “The multiple retailers and health food shops we supply wouldn’t stock herbal products if they didn’t sell. Typically, stores sell one sku a week at first, and sales build up from there. One sleep product for which Potter’s owns the licence sells 70,000 units a month, that’s 1.5 packs a week per store, of which there are 10,000. This particular product is very successful.”
Elting recommends selling female health products that have year-round appeal, as well as weight management products and seasonal lines, like hayfever products in the spring and summer.
He adds: “Clearly, a shop that has created awareness of healthier food and health products in general will be in a better position to drive sales and footfall. However, by selecting the most popular products and taking advantage of seasonal promotions it’s possible to drive sales in any store, particularly if staff have at least a basic knowledge of the products and what they’re for.”
However, Elting has a word of warning: “My advice to retailers would be to stock only licensed products because unlicensed lines may not be around for much longer due to new regulations coming into effect under the EU Food Supplements Directive. “Health food manufacturers have until July 12 this year to submit evidence to prove their ingredients are safe, so it would be better to stick with larger manufacturers who have the infrastructure and investment to comply with this potentially costly legislation.”
CONTROLS ON VMS
The EU Food Supplements Directive was published in July 2002 and passed into law in England and Wales on July 3, 2003 (and in Scotland a few days later).
The Directive promotes a ‘positive list’ of permitted VMS substances but under its criteria, 300 vitamin and mineral ingredients currently used in the UK would be banned from sales (5,000 products in all).
Health food manufacturers were given until July 12, 2005 to submit scientific proof that their ingredients are safe. Once approved, the ingredients and products go on the positive list of permitted substances for use in health foods.
Vitamins and minerals may be added to the positive list only if a full scientific dossier has been compiled and approved by the European Food Safety Authority. This process could cost between £80,000 to £250,000 per product, which is obviously prohibitive to smaller manufacturers.
One in 10 pharmacies in the UK are being hit with potentially crippling changes to the way NHS prescriptions are funded, which could result in significant closures.
Pharmacies that currently dispense fewer than 500 prescriptions a week receive a government top-up payment of up to £18,000 plus 94p for each prescription.
Under the new rules, introduced on April 1 but not due to come into effect until 2008, the top-up is being slashed to £3,000 or less, and prescription fees reduced to 90p.
The idea is that more funds are directed to reward add-on services, such as drug consultations, but pharmacists say this would not generate enough income to make up for the loss on prescriptions.
Mike Howe, Londis, Clyst St Mary, Exeter.
“I’ve tried selling VMS products several times because I think they’re becoming more important to society. I try new products for a period of six to eight weeks and promote them with prominent facings. “Unfortunately, sales of VMS just didn’t pick up. It’s the type of category that’s worth testing repeatedly though, to see if the consumer has caught on.
“I’ve only tried Sanatogen products so far but I’ll try other ranges, including herbal remedies, if the market is there.
“I’m about to do some customer research on VMS and other categories to see what customers want.”
Dylan Patel, Nisa, Carshalton, Surrey
“We don’t stock any VMS products at the moment – I haven’t tried them at all. There’s a pharmacy across the road. The area is like a village and people here stick to category shopping – going to the grocer for fruit and veg, the butcher for meat, the pharmacy for medicines. Also, VMS products have not been requested by our customers.
“We have an OTC fixture behind the counter but customers use this only for top-up shopping, when the pharmacy is closed, for example.
“Ideally, I would like to stock VMS but I also don’t have the space for it. I’d love to extend the store generally.”
TOP 10 BEST SELLERS
B-complex vitamins, including vitamin B1, B2, B3, B5, B6, B12, biotin and folic acid.
Calcium – this is the most abundant, essential mineral in the human body.
Coenzyme Q10 – also called ubiquinone. CoQ10 is used to convert food into energy.
Glucosamine and chondroitin - the building blocks of connective tissue and the key components of the joints.
Iron – an essential mineral. It is part of haemoglobin, the oxygen-carrying component of blood.
Multivitamins – containing a range of the most vital vitamins and minerals.
Soya – when eaten with rice, soya provides protein comparable with that found in animal products.
Vitamin A – a fat-soluble vitamin that: helps cells reproduce; keeps eyes healthy; is required for the normal growth and development of an embryo and foetus; may be required for normal reproductive function.
Vitamin C – one of its functions is to help prevent heart disease by reducing the stiffness of arteries and the tendency of platelets to clump together.
Vitamin E – an antioxidant that protects cell membranes and other fat-soluble parts of the body from being damaged.