Natural move for Wegmans

Natural move for Wegmans

With sales of vitamins and supplements on the rise, Wegmans Food Markets has launched a store-brand line of natural products, hoping to tap into this consumer health trend.



By MARK TOSH



Health products and dietary supplements are on the verge of a bull market as the majority of baby boomers begin moving into their 50s, according to market researchers and demographers.

To ward off disease, reduce stress and increase energy, an increasing number of Americans are popping vitamins and ingesting a variety of other supplements as part of their daily routine. One recent study, by Prevention magazine and the Food Marketing Institute, found that about two of every three consumers are taking vitamins regularly today, and almost 30% of the population are seeking health benefits from herbs.

It's against this backdrop of long-term growth and high margins that Wegmans Food Markets, Rochester, N.Y., has launched a store-brand line of natural vitamins, minerals and herbs under the Wegmans Natural label. Given the lack of a clear-cut dominant brand in the supplement category, it's almost a natural for retailers—especially those with a reputation for quality—to try to capitalize in this area using their own good name.

"We're bringing value to customers with products like this under our own label," says Mary Ellen Burris, Wegmans' director of consumer affairs. "This just seems to be a natural extension, based on the interest of consumers in supplements. It's incredible how much more consumers are choosing to take care of themselves with herbal remedies and vitamins."

Burris says the 150-SKU assortment is a strong foundation for the line, but it can be expanded in the future "as needed." Initially, the complete assortment will be available in the company's 33 stores with Nature's Marketplace natural products departments, but eventually some of the items may be added in other Wegmans' stores, she says. The retailer will continue distributing an existing line of traditional vitamins in all HBC departments.

Wegmans, which has been offering store brands since 1979, now has more than 2,000 SKUs under its own label.

Wegmans, which already has a sizable store-brand business in other HBC categories, says it spent almost two years in developing the line with an outside supplier for the natural and health food industry. Unlike some other recently formed supplement companies, Wegmans says its private brand supplier is "pharmaceutically licensed," and has been following Food and Drug Administration regulations since the 1940s.

Importantly, Wegmans notes that its products will have full disclosure of all ingredients, not just "active" ingredients.

Market research shows that the traditional vitamin and supplement categories are among the fastest-growing areas in the supermarket, but still smaller in comparison to sales at drugstores and discounters. One study by Information Resources Inc. found that sales of these products in supermarkets were growing at an annual rate of almost 25%, with total sales of $670 million. This compared with a 19% growth rate at drugstores (totals sales of $1.2 billion) and a 47% growth rate at discounters ($848 million total sales).

The overall market for vitamins and supplements is estimated at more than $6 billion annually, which includes sales at drugstores, discounters and health food stores. Packaged Facts, a New York-based market research firm, puts the sales of herbal supplements alone at $2.3 billion.

Many of the new Wegmans Natural vitamins and supplements are packaged in appealing amber glass bottles, with expiration dates noted on the bottom. The retailer planned to market the products with a special brochure outlining how specific products are important to the body, their natural source and the amount recommended for daily consumption.

Among the 150 initial products are such popular extracts as St. John's Wort and saw palmetto, special supplements such as organic flax seed oil, soy protein powder glucosamine sulfate, and a selection of such traditional vitamins as A, C, and E. The products do not contain artificial preservatives, colors or flavors; and no sugar, yeast, egg or milk products, unless noted on the label. There also is a selection of vegetarian capsules, which contain no animal by-products.

Wegmans kicked off the launch with a half-page ad in its weekly sales circulars during the last week of September. According to the ad, the new Wegmans' line offers "high quality and value" to consumers. "We're the only supermarket in the country with such an extensive private label line, which we will be continually expanding," the ad noted.

The chain also offered free samples of the one-a-day multiple vitamin on two different days during the launch week. There were special promotions on Vitamin E and one-a-day multiple vitamins for consumers using their Wegmans Shoppers Club cards.