Consumers are keen on the concept of personalization, but can brick-and-mortar independents capitalize on this trend? For insights, we turned to Noah Voreades, Managing Director of GenBiome Consulting.“Personalization in the nutritional supplements market in many ways is still trying to find the right business model, channels, and ways to keep customers engaged,” Voreades shares. “Currently, no clear winner exists, dominating the market from market share or revenue. This doesn’t mean personalization is hitting a dead-end. Quite the opposite: It’s consistently highly ranked by consumers as valuable for managing their health. On the brand side, more companies are recognizing personalization tied to nutritional supplements is important for long-term growth. The result is increasing diversity of ways personalization is being paired to guide nutritional supplement usage. In my opinion, 2022 has been the most dynamic year for new concept launches since the category started reaching mainstream awareness in late 2018.”
Offering an overview of where things stand now, Voreades shared several updates. On the supplier side, Voreades points to IFF Health’s partnership with Salus Optima to develop a personalization platform. “This platform will be offered to IFF customers to support creation of snacks and other products focused on improving metabolic health. GenBiome Consulting believes the B2B ingredient company of the future will be either vertically integrated or concierge-centric. Concierge-centric B2B ingredient companies will provide turnkey assets to brand owners to rapidly advance commercialization and reduce cost of technology platforms, data insights, AI-driven recommendations, etc., to maintain product development advantage. These suite of value-added services could be used by retailers to launch private label brands that have personalization platforms for white-labeled usage.”
On the brand side, Voreades points to Puritan’s Pride, which entered the personalized supplement category in June 2022 with a questionnaire-based pill pack offering. A short questionnaire unlocks the ability to offer personalization at mass scale and price points, he explains. “This trend is mirrored by digital health companies Hims/Hers and Ro Health launching their own OTC supplements, too. While not personalized, it signals the move of multi-billion dollar valued digital health companies expanding into supplements. Their engaged customer base provides significant opportunity to grow revenues and take market share from traditional supplement brands.”
More examples of personalization:Elo Health: "Ari Tulla, Co-Founder and CEO, is leveraging his vast tech and consumer background in making Elo Health a personalized supplement platform supporting customer’s optimal health," Voreades reports. "Combining industry-leading algorithms, nutritionist paired to each customer, convenient at home testing & high quality bioavailable supplements, their user experience is beautifully designed. I’ve personally beta-tested Elo Health’s platform, and the nutrition coaching chat feature is exceptional. Recognizing consumers want choice in their nutritional supplementation regimen, Elo Health has capsule & powder formats. They just raised $5M from notable athletes, tech investors & health executives."
Everlywell Launches Nutritional Supplements Line:" Since 2018, GenBiome Consulting has been tracking the digital health and DTC testing sector through various client engagements helping to build personalization platforms," Voreades shares. "In 2019, it became clear the total venture capital raised by digital health and DTC testing was significantly larger versus traditional personalized supplement start-ups. This provided these companies outsized capital resources to reach and acquire customers, not to mention leverage their telemedicine platform to enable greater adoption of supplements. This trend is beginning to materialize with Everlywell launching their own personalized supplement line in May 2022.Everlywell valuation is >$1B and raised over $250M in venture capital funding. For perspective, the largest personalized nutrition transaction to-date is Bayer’s acquisition of Care/of, which didn’t sell for anywhere close to $1B. Everlywell’s program leverages their testing platform to identify deficiencies and recommends a selection of supplement options paired to the test."
What’s next for personalization?“GenBiome Consulting recommends keeping an eye on the retail health sector (grocery stores and convenience). Walmart, Walgreens, Kroger, CVS, Dollar General, RiteAid are all rebranding themselves as healthcare companies by building out in-store health clinics and on-site nutritionists/doctors/nurses,” Voreades reports. “They could easily leverage in-store testing to recommend their private label brands or branded nutritional supplements on shelves.”
Where does that leave natural products retailers? “Brick and mortar retailers can capture personalized supplement revenue by investing in digital apps, in-store testing, in-store nutritionists, or health professionals to enable customer adoption,” Voreades suggests. “Beyond the largest players, smaller players are launching their own programs to compete. Size or revenues do not matter to launching an on-site personalization initiative. It simply involves finding the right partners and having the right experts guiding the process.”
Providing case studies to support that, Voreades points to Heinen’s Personalized Nutrition Center. “In 2022, regional grocer Heinen’s launched their own Personalized Nutrition Center. For a chain of this size, it’s impressive to see the level of personalization integration and commitment by executive leadership. Their center is a collaboration with local practitioners and offers comprehensive testing options. This program could be modeled by many natural or smaller regional brick-and-mortar retailers to enable personalization.”
Another example: Schnuck’s Good For You Program. “While not truly personalization, this program enables customers to track healthy food purchases leveraging technology from Spoon Guru,” Voreades shares.
Voreades also points to Kroger OptUp and Hannaford’s Guiding Stars. "Kroger has similar nutritional ranking program, and Hannaford does too. Both rely on algorithms, nutrition ranking & scoring of food choices to reinforce better outcomes."
Brick & Mortar Personalization Strategies
To help retailers capitalize on the growing trends, Voreades offers 3 key suggestions.
Identify Partners or Experts.Resources such as Salus Optima, Spoon Guru, Sifter AI, GenBiome Consulting, digital health companies, local health systems, and practitioners can help retailers enable personalization at scale.
Build Test Health Clinic Concepts.“Leverage existing customers already visiting stores to test health clinic concepts,” Voreades recommends. “Consumers want convenience for most health-related issues, and they visit retail stores at greater frequency than medical facilities. Use this behavior pattern to make it easy to provide personalized health solutions, which can be linked to supplementation.”
Consider Digital or Telemedicine Partnerships.“Many digital health or telemedicine companies realize building brick-and-mortar clinic presence and attracting customers is expensive,” Voreades notes. “Also, retailers with pharmacies or supplement products can be places they send customers to pick up recommended items. Leverage the real estate to increase store traffic or increase sales of customers visiting the store by establishing partnerships.” WF