“We’ve been very fortunate. We’ve had double-digit growth year-to-year for many many years, and we’ve been going since 1980” says Gilner, who says little about work keeps him awake at night apart from the fear snake oil merchants will provide ammunition to those calling for more regulation on the trade.
Dr Oz: ‘He can shoot from the hip…’
“The industry is always dealing with negative studies and snake oil merchants, and there are people out there that believe that what we have to offer is not legitimate. All we want is to be able to provide information to consumers and let them make a choice.”
Things like the recent Dr Oz show report on spiking also gave the erroneous impression that rogue players were rampant in the trade, he said: “He can shoot from the hip sometimes.”
But he adds: “I just hope that the industry isn’t hogtied and handcuffed by unnecessary regulation as a result.”
He is also watching developments over the Food and Drug Administration’s (FDA’s) controversial new dietary ingredient (NDI) draft guidance closely: “This is a real concern if it quenches innovation. I just hope that the [final] guidance is very different from what has been proposed.”
Positive growth every year
So how has Life Extension fared in the downturn?
“Over the last couple of years with the decline in the economy we saw a little bit in the reduction in the amount of growth,” says Gilner, who has worked for Life Extension since the late 1990s and took the helm in 1998.
“But we have always shown positive growth every single year since we’ve been in existence.”
The downturn has had a “two-pronged effect”, he says. “On the positive side people have not been retiring and they want to stay healthier for longer – we’ve also seen new people come into the category.
“However, we did see a very small decline in the average dollar amount per order, as people were asking us, ‘I take five or six different supplements but I can only afford four, so which four should I take’?”
Weight management and diabetes
In this environment, many consumers are turning to established products such as multi-vitamins, fish oils and CoQ10, although Life Extension’s ‘mitochondrial energizers’ and new formulations for bone and prostate health have also done well throughout the downturn, he says.
He is tight-lipped about new product development plans but says products tackling overweight, obesity and diabetes are clear growth opportunities for the firm, which develops all of its own formulations, but contracts out production of its supplements to third parties.
“We’ve seen some very nice results with our African Mango weight management supplements [Integra-Lean Irvingia, which contains an extract from an African mango called Irvingia gabonensis claimed to increase sensitivity to the appetite-regulating hormone leptin in overweight people].”
Routes to market
Life Extension - which is privately-held by co-founders William Faloon and Saul Kent and employs around 315 staff - started life exclusively in the business to consumer (b2c) space, says Gilner.
But bosses at the Florida-based firm gradually realized they needed to get into the b2b channel, which now represents 25% of sales and will likely account for at least 40% in the future, says Gilner.
“There are only so many customers you can reach directly and over the years the b2b channel has really grown in significance for us. But we are also selling more product via doctors, pharmacies and e-commerce.”
Growth in these channels is being driven by initiatives such as the new e-Partner program, in which Life Extension creates, hosts and maintains an online store where a participating healthcare practitioner may send customers to purchase Life Extension products, he says.
‘We’re not selling instant gratification here’
Asked whether he agrees with Schiff Nutrition International boss Tarang Amin that too much money is being allocated to trade spending on BOGOF and BOGO deals that commoditize brands, Gilner says:
“I agree we need to spend more on innovation and on consumer education. The best consumer is an educated consumer so I do see us focusing more on specialist retailers [as a channel to market] rather than food, drug and mass merchandise where discount offers are very important.”
He adds: “We’re not selling instant gratification here so the only way [to compete] is to educate consumers about what makes us different. But I think retailers are increasingly looking for science-based products that contain the same materials used in scientific studies at the dosages shown to be effective in those studies.”
The future is bright
So what is the outlook for the US dietary supplements sector, NDI guidance woes notwithstanding?
It's bright, says Gilner. “I think this sector will continue to grow – a lot of consumers are still not educated enough. If the industry goes about it the right way and provides credible information and products, the growth it has seen over the last 10 or 15 years, I think will increase even more so.
“For us it is a very simple formula, provide credible scientific data and let people make their choice.”