A sharp decline in sales of sports nutrition products was a particular sore point for Vitamin Shoppe, which posted weak second quarter earnings earlier this week. In an earnings call with analysts, CEO Colin Watts had this to say: “There has been a low level of innovation in the sports nutrition category, and as it becomes more commoditized, price and convenience have become bigger drivers of consumption behaviors.”
Lack of marketing support, not innovation
The tenor of those comments, tinged as they were with financial concerns, leads consultant Tim Avila, CEO of Systems Bioscience, to conclude that what Watts is really concerned about is competition and the lack of marketing support, not product innovation per se.
“The definition of innovation for a company like Vitamin Shoppe is somebody spending a lot of money to promote an ingredient, a product or a SKU,” Avila said.
The rhythm of new product introductions at some of the big brick-and-mortar retailers has from time to time had something of the fad about it, Avila said. ‘Innovation’ in this context means the next new thing, the next fast horse they can ride for the next six to nine months.
“These guys are looking for things like raspberry ketones,” Avila said.
Avila said that much of the information in the sports category is being communicated through online channels, and that’s where much of the sales are happening, too. In the past, companies like Vitamin Shoppe specialized in picking up on products when they reached the ‘emerging’ stage and then took them into the mainstream. This was after the ingredient or product started at the ‘underground’ stage and then graduated to ‘niche,’ Avila said. But more and more, brands in this space are choosing to skip trying to make the expensive and complicated jump to brick and mortar, he said.
“There is tons of stuff happening in the diet and weight loss categories. Go on to bodybuilding.com or myprotein.com and look at the top selling products, and they are marketing to specific communities, like the ketogenic diet community. You don’t have to go to Vitamin Shoppe to find out about this stuff and to buy it anymore,” Avila said.
“I think you could say that none of this innovation is groundbreaking, like creatine was, but there is definitely innovation happening,” he said.
New ingredients continue to drive sector
Ralf Jäger, PhD, principal of the consultancy Increnovo, said in his view the sports nutrition sphere has been among the more innovative categories in the entire industry, even though it has its own sore spots.
“I politely disagree with what Mr Watts had to say. You could say the pre-workout category is stimulant-based and caffeine driven, which is cheap and has hampered innovation,” Jäger said. “However there are numerous new clinically validated ingredients, and for that reason I think sports nutrition overall is actually the most innovative of categories.
“In sports nutrition we have approximately every 10 years one major breakthrough ingredient, for example, creatine in the 1990s, or beta-alanine in the 2000s. And recent innovation includes plant proteins, theanine as a caffeine alternative, new improved delivery forms of existing ingredients such as HMB free amino acid,” he said.
“We now also have probiotics with specific sports benefits. And with sports going more mainstream, going away from just bodybuilding and endurance, we see numerous recovery ingredients enter the market, such as curcumin, or fruit based ingredients,” Jäger said.
More could be done to communicate the benefits of the innovative products that are out there, according to Victoire Visseaux, marketing manager for French supplier Lactalis, which markets a ‘native’ whey ingredient made directly from milk via a filtration process rather than being a byproduct of cheese manufacture.
“Supplementation has always been in the spotlight for sports nutrition as the category has experienced exponential growth. However, the sports nutrition industry can provide further innovation by increasing product education. The sports nutrition companies and/or retailers will need to go beyond only delivering products but also offering a real service ensuring product claims and ingredients used are safe and able to deliver the benefits they are marketing,” she said.