How the changing retail landscape is changing sports nutrition product development

16-Aug-2019 - Last updated on 16-Aug-2019 at 15:19 GMT

Getty Images / Trong Nguyen

This week, two sports nutrition brands announced new mass retail partners—Optimum Nutrition goes to a club store, while Redcon1 partners with an outdoor and sporting goods store.

AMIN_O_ENERGY_Sparkling_Grape — Amino Energy + Electrolytes by Optimum Nutrition now available at Costco stores.

Optimum Nutrition announced Wednesday that its ready-to-drink Amino Energy with Electrolytes, a sparkling beverage in a can with a Nutrition Facts panel, are now stocked on Costco shelves nationwide.

Its part of parent company Glanbia Performance Nutrition’s strategy of penetrating new different retail channels. Once found exclusively at gyms or in stores like GNC and Vitamin Shoppe, Optimum Nutrition products can now be found in convenience stores, gas stations, and grocery chains like Walmart.

Its expansion into multiple retail channels beyond supplement specialty stores, first announced at the Sweets and Snacks Expo in Chicago in 2017, has also influenced the company’s product development strategy—Optimum Nutrition now focuses a lot of R&D effort in ready-to-eat and ready-to-drink products, which fare better at convenience stores than bulk powder supplements.

It has also influenced the type of ingredients suppliers are developing. For example, Glanbia Nutritionals, an ingredient supplier owned by the same parent as Glanbia Performance Nutrition, recently launched a creatine developed to be heat-stable so it can withstand processing into ready-to-drink products.

Competing with online sales

Supplements are easy to ship and generally need replenishment, which means an online business model, especially subscriptions, fare well for supplement marketers.

That is why bricks-and-mortar offerings should be developed differently—they should be designed for impulse purchases and on-the-go consumption, and should also address consumer needs that are not yet covered by other products sold in stores that carry a wide range of products.

In convenience stores, for example, Glanbia’s internal research found that sports nutrition shoppers there are high value shoppers that spend 40% more annually compared to the average consumer, said Jean Terminiello, who leads Glanbia Performance Nutrition’s immediate consumption division.

“They are under-served in c-stores due to lack of brand availability that they know and trust,” she told us in a past interview.

Redcon1 goes ‘outdoors’

Florida-based Redcon1 announced yesterday that two of its products will be distributed nationally at Dick’s Sporting Goods, a retailer that carries sporting and outdoor activities merchandise. This new deal adds more than 800 new points of purchase for Redcon1 products, specifically its Total War Pre-Workout and Total War ready-to-drink.

Eric Hart, vice president of Redcon1, describes his company as a unicorn in the sports supplement industry because of its omni-channel approach.

“No other brand has been able to create demand in direct to consumer, brick & mortar, convenience, international, and food/drug/mass," he said.

RCDari_208 — Redcon1's Total War Pre-Workout will be available at Dick's Sporting Goods.

‘Be like Coca-Cola’

The main advantage of being stocked in everything from grocery stores to gas stations to sporting goods stores and military co-ops, according to Hart, is the visibility.

“It increases brand recognition at a rapid pace,” he said. “Much like Coca-Cola’s distribution plan of ‘within an arm’s reach of desire,’ we approach sports nutrition in a similar fashion.”

No matter where someone is, he added, if they have a desire for REDCON1 products, the company wants to fulfill that demand.

The strategy has worked well for the company. “In 2017 we did over $11 million in net sales, the next year we saw $33 million in net sales, and this year we are on pace to be over $100 million in net sales; we are consistently over 300% growth year-over-year,” he explained.

Despite aggressive penetration into bricks-and-mortar, Hart said that direct-to-consumer (online) remains an ‘extremely strong’ channel for generating revenue, averaging over 50,000 orders a month.

“That direct business and marketing creates a halo effect for the entire business,” he said.

“As we continue to push innovation, we also continue to see channel expansion,” he added. “We have our roots in specialty sports nutrition but the products and brand speak to a wide variety of consumers and consumer needs so that is how I think we’ve been able to build this unicorn of an Omni-channel brand.”