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    Stretching Consumer Spend

    Sales reflect gains in the service and value-added deli sectors, as well as in produce, floral and alcohol.

    By Debra Chanil, EnsembleIQ

    Traditional grocery retail remains the top channel shopped for groceries, according to data from Schaumburg, Ill.-based Nielsen Co. (which measures stores with more than $2 million in sales).

    Sales in supermarkets accounted for a quarter (24.2 percent) of the nearly $2 trillion that U.S. consumers spent on all grocery store categories in all retail channels during 2013, down just a fraction from the numbers PG reported a year ago. Supercenters? share is up seven-tenths of a percent, with the combined total holding steady.

    This is great news, considering the continued incursion of alternative channels into the grocery and fresh food space ? convenience, dollar and drug stores among them, not to mention the specter of online retailers that further threatens to invade traditional grocers? historically sacrosanct territory.

    While traditional retailers? grasp of consumers is strong, analysis of channel data over the past five years (not tabulated) reveals a slight easing in some categories, including alcoholic beverages, grocery (both food and nonfood), dairy, deli, meat, fresh produce, general merchandise, and health and beauty care. The silver lining ? and there is one ? is that total supermarket sales were up 1.8 percent in 2013, to $475.3 billion, a testament to retailers? efforts to differentiate and respond to consumer needs and wants.

    Let?s keep focusing on the good news: 98 percent of shoppers make purchases at traditional grocery stores; this is for all categories, including alcoholic beverages, health and beauty, and general merchandise. Areas where other channels pose the greatest threat include health and beauty care, with 65 percent of shoppers making purchases at both supercenters and drug stores. Supercenters are also inching in via general merchandise and nonfood grocery, with nearly two-thirds of shoppers buying those categories in that channel. General merchandise (72 percent of shoppers purchase from traditional grocery stores) and alcoholic beverages (71 percent) represent the categories with the lowest share of shoppers in the traditional grocery channel.

    Breaking It Down

    In the grocery category (for which supermarkets held nearly 44 percent of all dollars spent), despite the lower percentage of shoppers, alcoholic beverages demonstrated ongoing growth, with sales up 3.9 percent in 2013. The past few years have also been good for alcohol sales, including growth of 4.7 percent in 2012, and growth of 3 percent in 2011. Total supermarket sales of alcoholic beverages at supermarkets total $20.5 billion (nearly 42 percent of all sales, down 0.4 points).

    While the overall perishables segment (60.5 percent of all sales at supermarkets, up 0.3 points from a year ago) produced flat sales (?0.4 percent) in 2013, there were a number of strong standouts. The category includes in-store bakery (service), fresh bread and baked goods, dairy, in-store deli (service), refrigerated deli (self-service), frozen foods, fresh meat/fish/poultry, packaged meats, fresh produce, and floral.

    The service deli, with sales growth of nearly 6 percent, and produce, with a sales increase of 4.4 percent, demonstrate that consumers are looking to eat more healthfully, but also want convenience. Both segments are delivering. The deli increasingly is becoming a meal-solution destination for harried consumers. The deli is perceived as healthier and a better value than traditional restaurants. An added bonus is that consumers order the amount they believe they?ll consume. Produce has seen growth over the past few years, up 3.5 percent in 2012 and up 2.6 percent in 2011. Here, packaging that extends product integrity and shelf life, packaging and processing that make fresh produce easier to eat on the go, and meal solutions such as vegetable kits for stir-fry or grilling remove the guesswork and fuss of assembling healthy meals.

    Frozen foods, a robust $30.3 billion in supermarket sales (62.8 percent of total dollars, down 0.6 points), continues to be a mixed bag of winners and losers. Breakfast foods, with more convenient hand-held and high-protein options, as well as desserts/fruits/toppings, with a swell of fruit smoothie bases, were strong players. Frozen juice drinks continued their deep freeze, with sales down 13.6 percent in 2013. Competition from shelf-stable and refrigerated juices, not to mention the aforementioned popularity of smoothies at home, is hitting this category hard.

    Frozen meal starters is a category worth keeping an eye on. While small ? just $33 million in supermarkets ? meal starters enjoyed growth of more than 63 percent, despite declines of 15.2 percent and 10 percent, respectively, in 2012 and 2011. The declines were likely due to consumers cooling toward the idea of slow-cooked meals. Meal starters deliver recipe-ready proteins such as cooked chicken or beef, or vegetable medleys, all pre-measured, pre-cut and pre-washed. A ?whole-package? example comes from InnovAsian Cuisine, which offers a number of meal kits, including Mai Pham Lemon Grass Kitchen Shrimp Pad Thai, which includes packets of shrimp and vegetables, rice noodles, and sweet and sour tamarind sauce. Nestlé?s Lean Cuisine has introduced tortilla kits in Buffalo-Style Chicken, Chicken Teriyaki and Turkey Ranch varieties. Consumers provide the wrap or flatbread; the kit contains the protein, vegetables and flavored spread.

    Floral, while still a small segment of $838 million at supermarkets (12.4 percent of total sales, down 0.1 points), appears to have rebounded from the recession. Growth of this nonessential category was up 3.6 percent in 2013 and 4 percent in 2012, coming off flat sales (?0.2 percent) in 2011.

    The dairy snack, spread and dip category of the perishables segment is enjoying robust growth in the supermarket channel. This category, which includes items such as cheese spreads and hummus, grew 9 percent in 2013, to nearly $1.5 billion in sales. Previous years also showed strong sales growth, including 4.6 percent in 2012 and 10.2 percent in 2011.

    Health and beauty care (18.3 percent share of $79 million, up 0.3 points) continues to benefit from consumers? self-management of their health. Cough and cold remedies were up 6.4 percent to nearly $1.4 billion in 2013; vitamins were up 6.7 percent to $2.3 billion.

    RTE Cereals Packing More Protein, Less Sugar

    Ready-to-eat (RTE) cereal took a hit in 2013, continuing a decline from 2012. But Packaged Facts reports that 75 percent of adults eat cold cereal, still ahead of the 60 percent of adults who eat hot cereal. And consumers eat cereal throughout the day, not just at breakfast.

    RTE cereal faces competition from more convenient breakfast foods such as hot-cup items like oatmeal and other grain combinations, and frozen breakfast foods, including sandwiches, which saw a sales increase of 4.3 percent in 2013. Newer competition includes breakfast biscuits like Nabisco?s belVita and Nature Valley?s Breakfast Biscuits. The trend in RTE cereal appears to be healthier grains such as chia and quinoa, as well as reduced-sugar products.

    Grain Berry, a brand under the Silver Palate umbrella, is launching RTE cereal varieties Bran Flakes, Toasted Oats, Honey Nut and Apple Cinnamon Toasted Oats, each containing significantly less sugar than comparable cereals.

    Consumers eat cereal throughout the day, not just for breakfast. Still, RTE cereal?s versatility should be promoted, including as a topping for salads, yogurt or ice cream, or as a stand-alone snack. Kellogg is partnering with Danone on the new YoCrunch Cereal Bowl, a hand-held, dome-shaped package of YoCrunch yogurt combined with Kellogg?s cereals, including Frosted Flakes, Froot Loops and Special K. The line includes both traditional and Greek yogurt varieties.

    Protein is a particularly hot claim right now, and RTE cereals are making the most of it. General Mills? Cheerios Protein Oats & Honey comprises whole grain Os, granola clusters and real honey.

    Yogurt Not Enough to Boost Frozen Novelty Sales

    Sales of frozen novelties melted in 2013, following miniscule growth in 2012. Frozen treat manufacturers are trying to find the sweet (or savory) spot that will tickle fickle consumers.

    Greek yogurt, which has been a star in the dairy case, is also trying to shine through the frozen dessert category. New novelties include Yoplait Greek with Granola Strawberry Frozen Yogurt Bars, a yogurt bar dipped in yogurt-flavored coating with granola crumbles. Yogurt is the unabashed health message in frozen desserts, as evidenced by the ?balanced? approach of such products as Kroger?s Strawberry Banana Flavored Yogurt Smoothie bars made with strawberries and bananas. The grocer?s Simple Truth bars, available in Blueberry and Vanilla varieties, are free from 101 artificial preservatives and ingredients. The package promotes ?balanced choices.? Decadent is another theme, and one not new to frozen treats, with Unilever?s Magnum Infinity Chocolate & Raspberry Ice Cream Bars as a prime example.

    Whimsy isn?t lost on the category, however, with Mars introducing Starburst Strawberry Sorbet Bars, which are said to mimic the taste of Starburst Fruit Chews.

    Protein, Gluten-free Are Keeping Bar Sales Fit

    Growth in the granola bar category has been driven by new buyers, representing 12 percent of the volume change, according to Catalina. In addition, buyer consumption has driven another 29 percent of the increase. There?s also been quite a bit of brand switching in the category ? on average, 25 percent of shoppers have reduced their spending on brands they were loyal to last year and another 30 percent have completely defected; in other words, those consumers are buying a different brand this year than they were last year.

    Like cereal, protein is playing out big in the granola bar category; protein is a top functional claim. Kind has launched a line of savory bars, Strong & Kind almond protein bars, including such varieties Roasted Jalapeño, Hickory Smoked and Thai Sweet Chili. Campbell?s V8 brand has launched Complete Nutrition Bars in chocolate and chocolate peanut butter flavors, but given the brand?s heritage with vegetables, can savory be far behind?

    While gluten- or allergen-free continues to gain steam across grocery categories, activity in the bar segment has been heavy. Recently launched gluten-free bar offerings include items from Kind, Annie?s Naturals and Nature?s Path Foods. Enjoy Life?s products are all free of the eight most common allergens; the company?s Enjoy Life Mixed Berries Chewy Bars, recently reformulated to improve their taste, don?t contain any gluten, milk, wheat, peanuts, tree nuts, sulphites, soy, crustacean shellfish, sesame, mustard, eggs, fish and GMO ingredients.

    Juice Drinks Getting Squeezed By Other Beverages

    Juice drinks are getting squeezed at grocery retail, with sales of shelf-stable juices down in each of the past two years. The $10.1 billion category won?t go down without a fight, however, as Mintel Global New Products Database (GNPD) data indicate that more than 450 new juice drink products were introduced during the past year.

    While the category boasts trends unique unto itself ? more than 54 products include coconut water or coconut milk, for example ? it?s also keen to pick up on what works for other categories. Trending vegetables kale and beets, for example, are also finding their ways into juice blends.

    The Project Fresh line from Freshbev is a line of cold-pressed drinks that includes No. 31 Deep Beet Blend Organic Juice and No. 30 Deep Kale Blend Organic Juice. The high-pressure pasteurized (HPP) juices are numbered in a ?Richter scale? manner, with lower numbers representing lighter blends and/or fewer ingredients, such as No. 11 Spicy Maple Lemonade Organic Juice. Higher numbers, such as those in the 30s, are considered more intense and may have more ingredients, including kale and spinach.

    Even more mainstream players are also featuring vegetables. Coca-Cola?s Minute Maid, for example, has a Berry Blend-flavored juice beverage, which contains 25 percent juice from pear, grape, purple carrot, pumpkin, beet, blueberry, raspberry and strawberry juices.

    Like soft drinks, much of the activity in the juice drink category is based on packaging reconfigurations, as in the case of Chiquita Tropicals 100 percent juice 12-ounce single-serve bottles, which feature the Rainforest Alliance Certified logo.

    Detergent Additives Should Boost Laundry Sales

    Loyalty retention is high in the laundry detergent category. In general, shoppers who spend 70 percent or more of their category volume with a brand are considered ?loyal,? and fewer than 50 percent of shoppers remain loyal year over year, according to analysis from Catalina. In laundry detergent, an average 63 percent of shoppers maintain their loyalty to one of the top six brands. Even in a high-penetration category such as laundry detergent, it?s important to understand your best shoppers, since 80 percent of the average brand?s volume is generated by only 3.2 percent of all shoppers.

    Laundry detergent ?plus? is the guiding principal for new products in the category, and that?s just what the slightly down category is in need of. Total detergent sales were down 2.7 percent in 2013, to $9.5 billion; previous years were also down.

    Liquid and pod formulas dominate new product launches, according to Mintel?s GNPD. Many products feature odor-eliminating ingredients such as baking soda and the formulation of Procter & Gamble?s Febreze. Still others are boosting their dirt-lifting prowess with an oxi/oxy boost. P&G?s Gain and Tide brands, CR Brands? Biz, Sun Products? All and Wisk brands, Henkel?s Purex, and Church & Dwight?s Oxi Clean brand all feature oxi/oxy.

    Following Tide?s success with laundry pods, pods/packs are gaining speed with other manufacturers, including private label. In addition to the convenience of no mess and no measuring, pods, along with extreme concentrates such as Method?s Sunset Breeze 8x Concentrated, address environmental issues of packaging and transportation costs. Method?s detergent is Silver-certified in the ?Cradle to Cradle? program.

    Packaging, Convenience Grow Produce Sales

    Expanding from traditional salad mixes such as Italian or spring mix, chopped salad kits are a flower in the blossoming fresh produce category, which enjoyed sales gains of 4.4 percent in 2013, to reach nearly $88 billion in sales. A prime example is Dole?s Chopped Asian Blend, with green and red cabbage, kale, broccoli slaw, snap peas, and carrots. Other Dole Chopped varieties include Chipotle & Cheddar, Bacon & Bleu, BBQ Ranch, and Summer Garden Blend.

    From the salad bowl to the dinner plate, new offerings make it easy for time-strapped consumers to include fresh produce in their dinner recipes. Target?s Archer Farms has launched Classic Fajita Vegetable Blend with onions, red and green peppers, and lime; Taco Toppings including tomatoes, lettuce, cheese and green onions; Saute Blend with packets of red peppers, green peppers and onions; and Stir Fry Vegetable Blend offering cabbage, onions, carrots, celery and ginger.

    Beyond salads, mixes are now being promoted in the produce department for smoothies and juice, including Fresh Express? Juicing Greens, which includes baby kale and spinach.

    Produce is benefiting from packaging innovations that allow manufactures to promote products as portable. Smaller portions of cut or bite-sized fresh produce, including snacking cucumbers, baby carrots, sugar snap peas and tomatoes, are all available for anywhere consumption. NatureSweet Cherriots are 3-packs of individual ready-to-eat tomatoes.

    New Products Blur Snack Lines

    Salty snacks is one category where shoppers are buying many brands. This is most likely due to occasion usages and the explosion of different flavor profiles. The majority of growth for the top six salty snack brands is driven by brand shifting and consumption changes, and only 1 percent of volume change is attributable to new buyers in the category. For the average consumer, only 18 percent of his or her total salty snack needs are met by one of these top brands, according to analysis from Catalina.

    Total salty snacks tops out at more than $18 billion in sales, with growth in 2013 of 2.6 percent, a tad slower than the 4 percent experienced in both 2012 and 2011.

    Potato chips, one of the biggest subcategories of salty snacks, continues to proliferate with new product launches. An overriding trend is that of flavor profiles inspired by other popular foods ? and drinks! ? such as Old Dutch Ripples Appetizers On the Go Bacon Cheeseburger Sliders and Buffalo Wing and Blue Cheese Flavored Potato Chips varieties, Frito-Lay?s Lay?s Chicken & Waffles Flavored Potato Chips and Ruffles Deep Ridged Classic Hot Wings, Barrel O? Fun Snack Foods? KLN Family Brands Margarita Salt & Lime, and Target?s Archer Farms Spicy Korean-Style Barbecue.

    Heat is also popular in the chip category: Zapp?s Voodoo Heat potato chips play on the popularity of hot sauce, as does Kettle Sriracha from Kettle Foods.

    Flavors, as well as new versions of chips, are also drawing attention to the category. Encroaching on traditional potato territory are sweet potato offerings, including Food Should Taste Good?s Kettle Cooked Salt & Pepper Sweet Potato Chips, which contain 25 percent less fat than leading potato chips. They?re also free from gluten, GMOs, artificial colors and preservatives. Other ingredients muscling into this territory include chickpea, quinoa, oat bran, lentils and pasta.

    These ingredients call into question the term ?chip,? as some of these products could overlap with crackers. One such hybrid is new Vintage Italia pasta chips, available in Mediterranean Sea Salt, Alfredo, Marina and Garlic Olive Oil varieties. These chips contain 60 percent less fat than regular potato chips.

    While packaging innovations are scant, Lay?s Stax have been repackaged in a 2-ounce pack with a tray inside to protect the chips. This is a unique departure from the rigid containers associated with stackable chips.

    Regional Pride Driving Barbecue Launches

    Barbecue sauces remain one of the most personalized tastes, with geographies duking it out for ?best? titles. New varieties feature Hawaiian, Kansas City, St. Louis, Texas and Carolina styles. Other terms include ?classic,? ?original,? ?sweet,? ?spicy,? ?bold,? ?smoky/smoked,? ?thick,? ?homestyle/homemade,? and any combination of these. Store brands outnumber national brands in terms of new products launched, according to Mintel?s GNPD.

    While historical sales of barbecue sauces have been tied to weather patterns, the ubiquity of gas grills has helped the category adopt a sustainable growth pattern.

    Soup is Light on Innovation, but Category Remains Hearty

    The total canned soup category remains competitive, with $6.1 billion in sales. After a slight dip in 2012, the category rebounded with modest growth of 0.7 percent. Mintel tracked 168 microwaveable soup launches in the past year.

    Of the companies introducing new soup products during the past year, the majority were retailers, including Safeway, Wegmans, Aldi, Dolgencorp, Kroger, Trader Joe?s, Target and Supervalu.

    Stalwarts in the category, such as Campbell?s, have introduced new packaging around sponsorship, including Campbell?s Chunky soups? sponsorship of Super Bowl 2014, and condensed soups? support of Kroger?s ?Giving Hope a Hand? campaign.

    Hain Celestial Group updated the look of its Imagine Natural Creations line of soups to feature the Gold Superior award logo from American Masters of Taste. The product is vegetarian and contains no GMO, dairy, gluten, added MSG, artificial ingredients or preservatives.

    General Mills? Progresso Heart Healthy is the new name of soups formerly marketed under the Reduced Sodium and High Fiber monikers. Varieties include Creamy Tomato Basil, Creole Style Chicken Gumbo, Homestyle Vegetable Beef, and Southwest Style Black Bean and Vegetable.

    Greek Style Still Reigns in Yogurt Category

    For the average top-five yogurt brand, nearly half of all shoppers have remained loyal year over year, according to Catalina analysis. However, a third of shoppers have reduced their loyalty, which is a clear indication of brand switching. This isn?t surprising, with the introduction of the Greek yogurt trend in new brands and items. Since only 3 percent of brand volume change is coming from new buyers to the category, current yogurt buyers are responsible for growth in the category through increased consumption.

    Yogurt has gone from a less-than-mainstream plain product to the sweet, spoonable favorite of the masses to a protein-packed item that can be global (Greek, Australian, Russian and Persian); artisinal (small-batch); or even positioned against gender or age The category saw gains of 6.7 percent in 2013, to $7.3 billion, on top of strong gains in both 2012 and 2011.

    Greek yogurt remains a driving force in the category, with Mintel tracking 320 new Greek-style yogurt products for the year ended June 2014 Store brands such as Aldi, Target Simply Balanced, Wegmans, Lucerne Foods, Topco Associates, Kroger, Meijer, Kroger, Safeway and Supervalu vie for new launches with Yoplait, Fage USA, YoCrunch, Dannon, Liberté, Hain Celestial Group, Stonyfield, Farm, Chobani, Alpina Foods, Lifeway Foods, Greek Pastures, Kraft Foods, Tillamook County Creamery, Auburn Dairy Products, Brown Cow Farm, Prairie Farms Dairy and Anderson Erickson Dairy in new Greek yogurt varieties.

    Greek yogurt is also bursting into the adjacent dairy dip category. Helluva Good Cheese has a new line of Greek Style Yogurt dips, including French Onion, Southwestern Chipotle, Fire Roasted Vegetables and Herb Ranch.

    Savory yogurts are barely visible through the wall of fruit yogurts, but Stonyfield Organic YoToddler includes a Pear-Spinach-Mango variety, and some dips, such as tzatziki (cucumber and yogurt) could be construed as savory yogurt. Savory dips featuring yogurt (Greek-style aside) are on the rise and include ingredients such as jalapeño, cucumber and feta, artichoke and parmesan, roasted red pepper and asiago, and fire-roasted vegetables.

    Mintel?s GNPD indicates that innovation continues in other areas as well. The White Moustache, based in Brooklyn, N.Y., offers a variety of small-batch handmade yogurts made from ?an old-world traditional recipe from a Persian village.? Varieties include Sweet Beets and Sour Cherry. The packaging looks like it would be equally at home in the men?s grooming section.

    Among major brands, General Mills? Yoplait is testing the seasonal waters with Yoplait Light Margarita and Original Peach Sweet Tea limited-edition varieties. The products are promoted as stand-alone and as toppings and dressings.

    With Guesswork Removed, Consumers Tap Frozen Veggie Innovations

    Loyalty is high in the frozen vegetable category, with 58 percent of loyal shoppers maintaining their buying patterns and only 15 percent completely defecting from one of the top five brands. The factors driving category growth are consumption (25 percent of volume change) and brand switching (24 percent of volume change). Private label is a large contributor to frozen vegetable volume, because the top five national brands represent only 43 percent of all category sales. The average spending on one of the top five brands is $9.84, while shoppers spend more than $34 in the category. As a result, the opportunity for brands to capture a portion of category spending is enormous, according to analysis from Catalina.

    Potatoes remain the vegetable of choice among new product developers in the frozen vegetable category, but even crinkles, waffles and straight cuts are getting some interesting attention.

    While some of the veggies du jour, including kale and Brussels sprouts, are being launched, more usable products are coming in a ?meal-ready? format, including for pizza, stews, soups, stir-fries and grilling. Pinnacle Foods? Birds Eye Recipe Ready blends, for example, speak to the need states of consumers who want to eat healthfully, but are often strapped for time.

    Another interesting twist is vegetable and fruit medleys intended for smoothies, including Rader Farms? Jamba Fruit & Veggie Smoothies Green Fusion Smoothie Preparation, with green apple, mango, pineapple, kiwi, banana, broccoli and spinach, and Earthbound Farm?s Organic Smoothie Kickstart, made with organic kale and berry.

    Of special note is the emergence of various bean options in the frozen section. Hanover Foods? Bean Essentials, in Caribbean Black Beans in Sauce, Cajun Pink Beans in Sauce, Southwestern Pinto Beans in Sauce, and Tuscan White Beans in Sauce varieties, appeal to consumers who either don?t know how, or don?t have the time, to cook from dried beans, but want the fiber and protein these legumes provide. The brand also carries a variety of frozen beans without sauce.

    Packaging Innovations Add Fizz to Soft Drinks

    Across CPG, only 2.5 percent of all shoppers contribute 80 percent of the average brands? sales, according to analysis from Catalina. For soft drinks specifically, nearly 8 percent of all shoppers drive 80 percent of a brand?s sales. This makes soft drinks an interesting category in that shoppers buy many brands. Additionally, the top six brands represent 80 percent of category sales, while the average shopper spends only 26 percent of his or her category dollars on one brand. Nonetheless, when they?re loyal, they?re loyal. Loyalty is higher than average in this category, with 54 percent of loyal shoppers in year one remaining loyal in year two.

    Traditional carbonated soft drinks continue to get flattened from all sides ? from liquid refreshment competitors to watchdog groups beating the drum against both nutritive and non-nutritive sweeteners. Sales of carbonated soft drinks were down 3.7 percent in 2013, but the category retains a robust $11.5 billion in supermarket sales.

    So while the new product news is light for traditional CSDs, companies are making use of packaging, including commemorative treatment, glass bottles and different sizes, to attract consumers. Dr Pepper/Seven Up has repackaged its limited-edition Dr Pepper Vanilla Float in a summer design with a retro 4th of July summer barbecue theme. Coca-Cola?s fridge pack features the FIFA World Cup Brazil 2014 logo. Pepsi?s new bottles, in its 24 × 12-ounce case or 4 × 12-ounce carton, feature a more modern twisted glass version of the swirl-glass bottle of yesteryear. The company also came out with new 16- and 20-ounce single-serve bottles last year (the first since 1977) that feature a swirled grip on the bottom and a smaller label on top. Most major soft drink companies now have 7.5- or 8-ounce cans.

    New soft drink varieties are harder to come by. Jones Soda, historically one of the most creative soft drink companies, didn?t disappoint with Huckleberry and Chipotle Pineapple varieties. Coca-Cola has launched a completely new product, Sprite 6Mix by Lebron James, a limited-edition lemon-lime soda with natural cherry and orange flavors. Hansen?s Natural, for its part, has launched a line of Cane Soda, including a Mandarin Lime variety.

    The Changing Market for Vitamins

    Total sales in the vitamin category were up about 1.7 percent to nearly $1.25 billion for the year ending May 18, 2014, according to Chicago-based IRI. The subcategories reflected a mixed bag of growth: Sales of mineral supplements were up almost a half-percent and multivitamins dropped 0.6 percent, while liquid vitamins jumped more than 8 percent.

    That reflects the assessment of market researcher Mintel, which observes in its July 2013 executive summary on vitamins and supplements, ?Due to consumers? busy lifestyles, they are looking for faster-acting products that they can take on the go or that they can simply add to their daily meals to enjoy all the benefits of the added nutrients.? Mintel?s consumer research shows strong interest in alternative formats (most notably chews, dissolvables and liquid products), as well as products that offer beauty benefits; this is driving launches of beauty drinks (already highly popular in Asia) in the United States and Europe.

    The vitamin, mineral and supplement (VMS) market is growing slowly, according to Mintel; global sales are valued at $25 billion (with the most activity in Asia) and forecast to grow to $31 billion by 2016. The largest segment within the U.S. VMS market is multivitamins; single/dual vitamins and minerals are also huge segments domestically.

    Additionally, with 12 million U.S. consumers claiming some type of food allergy, top product claims for 2012 VMS launches, according to Mintel?s GNPD are low/no/reduced allergens and no additives/preservatives.

    Meanwhile, Mintel suggests that slow category growth can be attributed to the economy and more healthful eating: ?The VMS market is not growing strongly because consumers are very cautious in their spending at the present time, and healthy eating habits have impacted on consumption of these products.?

    Among newly released products: Vitamin Shoppe?s ProBioCare Probiotic Supplement for Women which supports vaginal, digestive and immune health, and REBOOTizer, described on-pack as a ?Swiss-formulated wellness booster? containing antioxidant-rich vitamin C and an herbal supplement blend with seven natural fruit and herb extracts claiming to promote free-radical and toxin elimination.

    How to Reach Shoppers by Really Trying

    Retailers and shoppers appear to vary on what they consider to be the biggest influence on sales, according to ?Limits to Limitless,? a 2014 marketing spending industry study by Wilton, Conn.-based Cadent Consulting Group.

    On the whole, retailers participating in this study believe spending funneled through trade promotion and shopper marketing is most effective in generating sales. Meanwhile, trade and consumer promotion are favored by shoppers, who told researchers that advertising is good for awareness but has less influence on actual purchase.

    Interestingly, digital ? which 54 percent of retailers said is most effective in generating sales ? appears to generate more hype than results among shoppers, the study suggests.

    Among manufacturers, traditional trade promotion has dropped from about half of all marketing spending to about 44 percent, as customized spending ? digital and shopper marketing ? has doubled since 2012, while traditional advertising and consumer promotion have declined.

    Where retailers and consumers really part ways, according to the Cadent study, is on the effectiveness of shopper marketing.

    Retailers regard in-store events and retailer-specific offers and merchandising as having the most impact on generating sales.

    But events rank low among shoppers in what they say most influenced their decision-making, with most favoring retailer coupons and merchandising.

    ?Here?s what came through loud and clear: Shoppers are telling us that the importance of discounts, value and coupons is still paramount,? says Ken Harris, Cadent managing partner. ?Regardless of how you look at it, feeling smart and getting a discount is huge.?

    So, What Does This Mean?

    The convergence of two major trends in the industry has created this situation, Cadent explains: ?First manufacturers have limited resources or resource constraints. Every week, we hear about layoffs, reorganizations and doing more with less. This may be driven by Wall Street demands, acquisitions by private equity firms, or just a compelling need to stay competitive.?

    Marketing spending is also feeling the strain: ?There is an increased demand to justify the impact of spending on sales and return on investment. These resource constraints are even more evident in the current low-growth environment especially for center store categories.?

    But ?limitless? opportunities, the study contends are being generated on two fronts: the growth of new marketing spending options driven by personalization, customization and efficiency, and second, the potential to grow in new places or formats. ?This includes expanding beyond the traditional retail footprint and embracing the complexity of today?s environment,? Cadent says. ?It is this combination of limited resources yet unlimited opportunities to market with new vehicles and in new places that creates this ostensible paradox of limits to limitless.?

    In essence, Harris says, consumers don?t really care exactly how discounts are delivered, just as long as they get something that?s important to them.

    By Debra Chanil, EnsembleIQ
    • About Debra Chanil Debra Chanil is Director of Market Research of EnsembleIQ. She can be reached at [email protected]

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