Nutritional Outlook

Nutritional Outlook, December 2016

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■ NUTRITIONAL OUTLOOK DECEMBER 2016 Retailers Beware the Price Play "I see a ton of natural retailers getting in trou- ble by trying to compete on price," Craven laments. And their price play doesn't work "because it doesn't ft the model very well, and it's not the reason most people come to natural retail." So how should a H&W retailer gain con- trol over the game if price isn't the strongest play in its book? Craven wagers that "the big revolution" in successful retailing to come will revolve around "monetizing our services beyond just product." Tat could involve de- ploying subscription-based models, charging for education that staf previously shared for free—even ofering ready-to-eat meals. And while ubiquitous shopping invariably applies downward pressure on prices, Cra- ven advises against cutting inventory or staf hours—"the two most expensive things"—to maintain margins, as it erodes the very assets that draw consumers into stores in the frst place. Going forward, he concludes, "Natural retailers will have to fgure out how to make more margin from services than they cur- rently do with product." Food for Thought In the coming years, Karen Howard, CEO and executive director, Organic & Natural Health Association (Washington, DC), believes that "retailers seeking a unique value proposi- tion—especially independent retailers—will be stocking shelves with food-based supple- ments." In fact, she adds, industry "un- derestimates the impact of food trends on supplement sales." And it does so at its peril. Look no further than the success of buzzy "superfoods" in reminding consumers that we really are what we eat—not what we swallow at the kitchen sink with a glass of water each morning. As Masalski says, "Con- sumers want to eat more 'whole-food' prod- ucts, as opposed to taking a bunch of pills." She predicts that a focus on consuming iso- lated nutrients will fade into the background "as consumers realize that many nutrients need to work together for optimal benefts." Tus, she recommends that retailers "ex- pand food supplement oferings, as well as protein oferings," to start. She's already no- ticed "more gummies, chocolates, and liq- uids" on shelves, as well. "And consumers are starting to understand that they need quality over quantity." Clean Up Our Acts Speaking of quality…When Howard consid- ers the challenges facing H&W retailers, she sees three standouts: "Bad players, bad regulatory enforcement, bad press." Teir cumulative efect has dragged consumer confdence in supplements to "dangerously low levels," which she says "is one more hur- dle for independent retailers as they work to determine what defnes quality in the marketplace." Fortunately for them—and, ultimately, for consumers—they'll get some help in deter- mining, defning, and monitoring that quality once new ANSI-approved dietary supple- ment GMP standards go live in early 2017. According to Casey Coy, program manager, NSF International (Ann Ar- bor, MI), "Te Global Retailer and Manufacturer Alliance—GRMA— and its members have been working since 2014 to develop a single, industry-accepted standard and auditing program using the ANSI consensus-based stan- dard-development pro- cess." By combining regulatory GMP and retailer require- ments into a single standard and auditing program for d i e t a r y supplements, she says, the move "will help ensure consistency and proper training of auditors while also reducing the number of audits and strengthening safety, quality, and trust throughout the supply chain." Even so, Dr. Cheryl Luther, general man- ager of dietary supplements and functional beverages at NSF International, is quick to remind retailers that they "need to continue their vigilance in ensuring that Good Manu- facturing Practices are in place, along with proper testing of ingredients to mitigate risks throughout the supply chain." Come Together Tackling these challenges—and realizing the opportunities—is a heavy lift for any supple- ment retailer to attempt on their own. So it's comforting to know they don't have to. "A lot of natural retailers feel like they're out on an island," Craven says. But he encour- ages them to view themselves not as a group of competitors, but as "an ecosystem." Tat may break with the status quo, in which nat- ural retail remains "very fragmented versus mass," he continues, "but I think there's got to be some way to pull everybody together to share in the collective experience of growing best practices." MegaFood's ZingMojo summit was a frst shot at doing just that, particularly in its at- tempt to identify "why shoppers choose the shopping platforms they do," he says. And it likely won't be the last. Also, Craven thinks that retailers need to "up their game" in working with the partner brands that fll their shelves. For example, his company has an IMAP (Internet minimum advertised pricing) policy that maintains "an even playing feld from a pricing standpoint" for its brand at retail, so that a shopper can't browse product in a store and then fnd it at 40% of on Amazon. "Teaching the natural retailer how to culti- vate that product set and partner with those brands that recognize their place in the eco- system is not necessarily how a lot of natural retailers think," Craven says. But it should be. Kimberly J. Decker writes for the food and nutrition industries from her base in the San Francisco area, where she enjoys eating food as much as she does writing about it. 52 IstoCkphoto.CoM/ twIlIghtEyE

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