- There’s no treatment to stave off the coronavirus, but the vitamin market is booming as Americans continue to seek out health supplements and immunity boosters like vitamin C, vitamin D, zinc, and elderberries.
- According to a survey conducted by financial services company Houlihan Lokey, overall demand for vitamins and supplements is up 34%. At the same time, 81% of respondents said they have increased their spending on wellness since the pandemic began and 90% expect to continue to do so after it ceases.
- We talked to industry analysts and wellness executives about why direct-to-consumer and e-commerce companies are uniquely prepared to respond to and benefit from unprecedented growth, while traditional brands will be forced to play catch-up.
- Visit Business Insider’s homepage for more stories.
While there is still no viable vaccine or treatment to stave off the coronavirus — and no, contrary to President Trump’s claims, hydroxychloroquine should not be taken as a preventative measure — immunity-boosting supplements are flying off shelves.
Demand for vitamins and supplements has skyrocketed in recent months as Americans beeline to health stores and pharmacies in an effort to fend off the virus. According to a consumer survey conducted by the financial services company Houlihan Lokey, immunity supplements and preventative vitamin sales are experiencing a 34% increase in demand, with a forecasted rise of 38% in increased consumption after the pandemic ends.
Further, 81% of respondents said they have increased their spending on wellness products in response to the outbreak, and 90% expect to do so even after the pandemic is over, pointing to “long-term repercussions on overall consumer behavior with positive implications for the health and wellness sector,” the analysts wrote.
“Consumers are overwhelmingly increasing spend on health and wellness during the pandemic, a trend that is expected to continue in a post-COVID-19 world,” the report states.
The increase in demand is proving especially advantageous to buzzy direct-to-consumer companies like Ritual and e-commerce sites like Lucky Vitamin, as Americans seek out alternative ways to get immunity boosters over-the-counter medication. Meanwhile, businesses like GNC, with its large fleet of physical stores and show adaption of digital, found the coronavirus has pushed them further into debt.
We spoke to several business leaders and analysts about how the coronavirus outbreak is impacting the vitamin and supplement market, and how DTC and e-commerce companies are largely reaping the benefits.
Digital wellness finds its time to shine
For DTC brands like Ritual, the pandemic has played a major role in boosting sales of its subscription vitamin products. According to a company spokesperson, the company is currently selling a bottle of multivitamins every 16 seconds.
Liz Reifsnyder, Ritual’s chief operating officer, told Business Insider that despite the increase in demand, the company was well prepared even before the coronavirus for spikes in sales, and thus has not have any major supply chain disruptions.
“We are a high growth company anyway, so we typically are prepared for big jumps in demand for when certain things we are rolling out are going well,” she said. “We were in a pretty good spot inventory wise and we work with a number really high-quality partners on the supply chain side.”
Over at Lucky Vitamin — a website that specializes in discount vitamins, supplements, and health food — the company hired additional warehouse workers to respond to increased demand, much like other essential services like grocery stores began to do around the country.
Sean Wolf, vice president of merchandising at Lucky Vitamin, said the company experienced a 200% month-over-month in demand in March, with the strongest growth in products like vitamin C, vitamin D, and elderberry. In an effort to retain both returning and new consumers and build brand loyalty, he said the company has placed added emphasis on customer service.
“We’re making sure that their shopping experiences is a pleasurable one by following up with them, making sure that they didn’t have any challenges with their order, and providing the customer service experience that one would hope to receive while trying to get the order as quickly and as fast to them as,” he said.
Having a strong e-commerce presence has also proven vital for traditional companies like The Vitamin Shoppe, which temporarily shuttered 90 of its 780 stores and began pushing curbside pickup at the remaining locations. The Vitamin Shoppe CEO Sharon Leite told Business Insider earlier this month that the company’s timely investment in a digital overhaul before the pandemic has been instrumental in helping the company maintain momentum.
“Had we not made a lot of those investments in 2019, I don’t know that we would be realizing some of the successes we’ve seen in e-commerce channels — especially when it comes to conversion rates, site speed, and the ability to execute and turn orders around out of distribution centers,” she said.
As DTC and e-commerce thrives, GNC fights an uphill battle
Still, the vitamin and supplement boom hasn’t been enough to help long-struggling brands like GNC. Though the company bought itself three months with creditors to sort out its financial woes after reports arose that GNC was considering filing for bankruptcy, its prognosis remains murky.
While GNC’s insurmountable debt problem predated the coronavirus, shuttered physical store locations and a failure to invest in e-commerce and improve its digital experience didn’t help matters, according to Shelly Socol, CEO of e-commerce agency One Rockwell.
“GNC has found itself in a similar situation to J.Crew, JCPenney, Sears, and any of those big retailers that were not on their game and investing in DTC,” she said. “They’re playing catch-up with e-commerce that has not been upgraded or optimized at the level it needs to be at to navigate the time that we’re in.”
Ben Parr — co-founder and president of Octane AI a messaging platform designed to help Shopify brands boost their businesses — echoed Socol and said GNC’s challenges proved insurmountable due to its large physical footprint and slow evolution on digital.
“GNC relied too heavily on its retail locations,” he said. “By investing in e-commerce over the past few years, The Vitamin Shoppe put itself in a place to weather the storm, while GNC may never be able to navigate its way out of plummeting sales, expensive real estate, and burdensome debt.”
GNC declined request Business Insider’s request to comment, however, a spokesperson responded with a recent statement from GNC CEO Ken Martindale, in which he says the coronavirus has “significantly disrupted” sales and pointed to a shortcoming in its digital business.
“Our transformation into a true omnichannel brand continues and we are working diligently to reposition and restructure our business for the future.”
The future of vitamins is digital
Ultimately, the Houlihan Lokey analysts said the health and wellness sector remains a “rare bright spot” amid the coronavirus.
Claude Zdanow — founder and CEO of Stadiumred Group, a collective of specialist marketing agencies — said the growth in the DTC vitamin and supplement market is in many ways mirroring the rise in remote fitness and brands like Peloton.
“This is the perfect time for vitamins and nutrition,” Zdanow said. “We see people are at home with more time on their hands than ever and they are looking to take advantage and stay active, eat healthily, and leverage supplements.”
Analysts said that companies like Ritual hold a particular advantage due to its consumer demographic, which is largely millennial women. According to the Houlihan Lokey report, millennial and Gen Z consumers are “taking significantly more” vitamins and supplements in direct response to COVID-19, with 35% and 36% of respondents noting a marked increase in consumption.
“There’s no doubt that it’s a marathon and I think the companies that have already been training for it are going to outplay the ones that didn’t focus their energy in that direction,” Socol, the CEO of One Rockwell, said.
Looking ahead, the key will be maintaining momentum. Socol said larger traditional companies like The Vitamin Shoppe can continue to grow sales by adding features that focus on personalization, customization, and features like live customer service chats.
“It’s a catch-up game,” she said. “We saw this back in the day when luxury fashion was really late to the game as far as taking e-commerce seriously simply because they thought it would dilute their brand equity, and we quickly saw that delay had its effects.”