Low-Carb, Supplement Cross-Promotion, Sustainability Pondered By Retailers

The National Nutritional Foods Association and Natural Marketing Institute are encouraging natural product retailers to explore joint promotion of supplements and low-carb offerings, while some industry stakeholders suggest that the popular diet approach may be fading.

In a joint report presented at NNFA's Natural Products Convention in Las Vegas July 16, NNFA and NMI urged retailers to "cross-promot[e] relevant supplements throughout the store and/or within specific, relevant food sections," especially minerals and nutrients potentially absent from low-carb diets.

"We truly expect the weight-management trend via low carb is much more than a passing fad," said NMI managing partner Steven French, noting that more than 2,000 low-carb products have been launched in the last five years. French made a similar case for low-carb's future viability and supplement opportunity at Supply Side East in May (¹ (Also see "Low-Carb Health Consequences Create Supplement Opportunity – Consultant" - Pink Sheet, 10 May, 2004.), p. 19).

The consultant maintained that the movement continues to expand beyond food and beverage channels into supplement and natural health markets, and that low-carb weight managers "have a much higher belief in and use of all kinds of health and wellness products, including supplements, fortified nutritional products and over-the-counter drugs."

French argued the market remains ripe for "non-food, low-carb" products in the near future.

"As the low-carb trend matures and you take a look at various opportunities that are presented by manufacturers or to retailers...start to pay attention to the non-food type activities," he recommended. "Those are probably what's next in the natural channel."

The consultant cited the emergence of "supplement-type products that are not necessarily starch blockers, but they are supplements that help a consumer when they're dealing with higher levels of protein and less fruits and vegetables and so on."

In the same vein, several marketers unveiled supplements targeted to low-carb dieters at NNFA, including Enzymatic Therapy's Body Rewards line (see ² ). Slim Fast announced the re-launch of its entire line with a low-carb focus last month (³ (Also see "Slim Fast Forgoes Classic Products In Favor Of Low Carb Diet, Optima Lines" - Pink Sheet, 5 Jul, 2004.), p. 5).

Based on its annual Health & Wellness Database, NMI also observed growing demographic similarities between natural channel and mass market shoppers, including a narrowing of income and gender gaps. "The natural channel shopper is almost morphing themselves to look more and more like the general population each year," French said.

Given low-carb products' transition to the mass market, many natural products retailers already are beginning to think beyond low-carb and back to their core marketing beliefs. An NNFA retailer forum revealed concerns about the diet trend's future and its aftermath.

"Low-carb products continue to sell, but if you're an independent natural products retailer and you had the low-carb products in your store, chances are you may be selling fewer of them today than you did...six months ago," Retail Insights President Jay Jacobowitz opined, pointing to the increasing diversification of products in the mass market.

Retailer Randy Reinartz of Wayne & Mary's Nutrition Center in Sioux Falls, S.D., emphasized the need for nutritional retailers to maintain their "core" health and wellness business even as they capitalize on trends.

"I think some retailers have...confused the Atkins [diet] with their core business, where in reality it was a trend business, very similar to coral calcium," Reinartz said. "It is a trend; it will peak and come back down."

Jacobowitz hypothesized that the next major trend for natural products retailers will emerge from the glut of dietary research being performed at NIH and by manufacturers, as well as opportunities arising from the national obesity epidemic for nutritional and immune system-boosting products.

"We're seeing studies come about our old friends vitamin C or calcium," Jacobowitz noted. "I think the next trend is really going to be a move back toward our roots, but this time under-girded with scientific support."

"We are under attack as an industry, and if we hang ourselves out there the way we have been throughout our whole history without using substantiated science, we are going to come under the guillotine," he concluded.