8th Annual Vitamin and Sports Nutrition Study Webinar

Webinar Series

Wednesay - May 20th, 2015

TABS Group’s 8th Annual Vitamin and Sports Nutrition Study

TABS Group’s 8th Annual Vitamin Study

2

Research Specs: Survey of 1,015 Consumers via Caravan Panel, part of ORC International. Geographically

and demographically dispersed and weighted. New research vendor.

Each survey from 2010-2015 was fielded in April or May.

Definitions – FDMCD (aka Mass Market) = Food + Drug + Mass + Club + Dollar Non-FDMCD (aka Specialty) = Nutr Specialty + Natural Food + Online + Catalogue + MLM + Other Meijer now classified as Mass (Other SuperCenter)

Sports Nutrition = Performance and Protein Powders, Drinks and Pills. Energy Bars and Shots excluded.

Questions: How Many Types of Vitamins and Nutritional Supplements Purchased?

What Types Purchased and which Regularly (3+ times per year)?

Outlets where purchase Vitamins and where purchase Regularly?

How often purchase various Types of Sports Nutrition?

Outlets where purchase Sports Nutrition?

TABS Group Vitamin & Sports Nutrition Study

3

Recordings of TABS Group webcasts can be found at

webinars.tabsgroup.com

TABS GROUP EXPERTISE & THOUGHT LEADERSHIP


4

20% 25% 30% 35% 40% 45% 50% 55% 60% 65%0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

R² = 0.942767754053641

Survey vs. Panel CorrelationPanel: Total Purch Occasions

Survey: % of Respondents Stating 3+ Purch

as indicated by its high statistical fit with PanelSurvey is a valid indicator of Sales Potential…

Additionally…Share of Outlet Mentions has solid correlation to AOC shares by outlet


5

Percentages reflect % of Adults 18+ Purchasing

Source: TABS Group Annual Vitamin Study of 1,000 US Adults Age 18+

Vitamin Category Penetration and Purchase Levels

Slight drop in Category Penetration coming entirely from Heavy Users .

Light Users (1-2 Types) Heavy Users (3+ Types)


6

Vitamin Category Penetration and Usage by Gender


TOTALPenetration % of Buyers Heavy

MENPenetration % of Buyers Heavy

WOMENPenetration % of Buyers Heavy

201020112012201320142015201020112012201320142015201020112012201320142015201020112012201320142015201020112012201320142015201020112012201320142015

71%73%

66%

74%

68%

75%

35%

37%37%

31%

40%

32%

67%

60%

70%

65%

71%

74%

34%

38%35%

30%30%29%

77%

80%

72%

78%

71%71%

39%

44%

36%

40%

35%33%

Longer term trend of decline in Heavy Usage among women.

Dropoff in category Penetration and Buying Rate a function of attrition by Men.


7


Vitamin Category Penetration by Vitamin Type


Adult Mult Fish Oil Vit D Vit C Calcium Vit B Joint Vit E Probiotics Other Herb Other Min Child Multi Melatonin CoQ10 Wmn Herb Eye Multi

201120132015201120132015201120132015201120132015201120132015201120132015201120132015201120132015201120132015201120132015201120132015201120132015201120132015201120132015201120132015201120132015

0%

10%

20%

30%

40%

50% 51%51%

56%

47%

28%

29%

29%

26%

31%

21%

21%

17%

25%

27%28%

23%

19%

23%

21%

24%

22%

21%

28%

20%

24%

17%15%

10%

14%

19%

19%

20%

10%

10%

7%8%

11%

10%8%

8%

11%

8%

11%9%

11%

7% 7%

10%6%

8%

10%9%

7%

7%7%8%

9%9%10%

6%7% 6% 8%

0%

9%10%

6%

8%

4%7%

4% 4%

6%

6%5%

7% 7%

5%3%

4%5%4%

2%3%

3%

0%

3%

3%4%

2010 2011 2012 2013 2014 2015

GAINS: Probiotic

LOSS: Adult Multi, Fish Oil, Calcium, Joint Relief, Co-Q10, Other Herb

Dip not seen in Mass Market

sales yet.


8


Vitamin Category Penetration by Channel


1-2 TYPE 3-5 TYPE 6+ TYPE

2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 20150%

10%

20%

30%

40%

50%

60%

11%

9%

9%

8%

11% 12%

40%40%

47%

39%

39%

36%

7%7%7%

6%

8%

6%

13%13%

15%

12%

16% 16%

6% 6% 6%5%

6%

6%7% 6%7%

7%6%

8%

MASS MKT SPECIALTY

Specialty Outlets saw slightly higher purchasing among Light buyers, and slightly lower among Heavy buyers.

Mass Market saw a big jump in penetration among marginal category buyers.


9

Light Shaded Areas Indicates YAG Shares

Outlets of Choice among User GroupsStated as a % of US 18+ Population

Source: TABS Group Annual Vitamin Study of 1,000 US Adults Age 18+. TG modeling for Share of Occasions

Mass Market has recaptured lost share from 2014 due to the surge in Light Buyer penetration.

“Specialty Only” Purchasing dropped vs. YAG.

% of Buyers % of Dollars


10

Vitamin Category Share of Occasions by Outlet


Walmart CVS Online Walgreens Grocery Costco Target VitSpecialty

Sam's Rite Aid NaturalFood

OtherMass

Dollar OtherOutlet

Catalogue OtherDrug

MLM BJ's Gym

21.5

1.4 1.4

4.5

2.3

9.8 9.7

6.7

1.8 1.80.7

7.9

4.9

9.0

2.0

6.2

0.2

7.1

1.1

$1.9 B

$0.6 B

$1.7 B

$0.7 B

$0.5 B

$0.4 B

$0.9 B

$0.3 B$0.3 B

$1.0 B

$0.2 B$0.2 B$0.2 B $0.1 B

$1.3 B

$0.1 B

$1.2 B

$0.1 B$0.0 B

0

.

0

.

0

.

Share of Occ - 2015Share of Occ - 2014Est VMS $ - 2015

FDMCD roughly 2/3 of retail dollars.

Total Outlet Sales = $11.8B, +3% vs. YAG

Online the #1 Outlet, but share down vs. YAG.

Gainers: WM, Costco, Rite Aid

Losers: Online, Vit Specialty, Grocery, Sam’s


11

Vitamin Category Share of Online Occasions by Domain Pure Play share surged to 80% of online sales vs. 67% the last two

years. Amazon has 36% of online occasions.



12

Passive Tactics Active Tactics

1.56 1.331.75 1.66

Light Buyers Heavy Buyers

What’s with these Shifts? Retailer Promotions

Passive Tactics Active Tactics

1.72 1.611.46 1.32

Mass Buyers Specialty Buyers

Deals drive more purchasing among Heavy Buyers, particularly Active Tactics.

Both types of Deal Tactics have more impact among Mass Market buyers than Specialty.

Promotional Activity was cited as a cause for sales softness among some Specialty retailers.

+24%+12%

Average Deal Tactics per Buyer

Source: 2013 TABS Group Vitamin StudyPassive = EDLP, PVL, Bonus Pk, Value SizeActive = Circular, Shop for Deal, FSI, Online Cpn, Rebate, Loyalty Card.


13

ECRM Promotional Tracking in VMS

PROMOTIONAL QUANTITY PROMOTIONAL QUALITY

Mass Market Ad Support was much stronger in 2015 relative to YAG and to Specialty.

Source: ECRM, April 2015


14

Any Sports Nutr Soy or Plant-Based Prtn

Other Prtn (e.g. Whey, Casein)

RTD Sports Shake Performance Pill/Pwd/RTD

37%

16%24% 28%

17%

Incidence: Adults 18+

Soy or Plant-Based Prtn Other Prtn (e.g. Whey, Casein)

RTD Sports Shake Performance Pill/Pwd/RTD

46% 46%36% 39%

31% 28% 29% 26%16% 18% 20% 24%

7% 8%15% 11%

Purchase Frequency by: Type

Sports Nutrition: Incidence and Buying Rate

23% 26% 35% 35%

% Heavy Buyers


15

18-20 21-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75+0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

55%

60%

65%

70%

49%

59%63%

51%53%

37%33%

27%25%

20%

14%17%

5%

27%

38%40%

29%31%

25% 23% 22%20%

11% 12%

17%

5%

22% 22% 22% 22% 22%

12%10%

5% 5%9%

2%0% 0%

TL-US (All) = 37%

TL-US (Light) = 24%

TL-US (Heavy) = 13%

AGE

Sports Nutrition: Incidence by Age and User Profile

Gradual dropoff in Light Purchase starting at Age 30, Sharp drop after Age 60.

Sharp dropoff in Heavy Purchasing after Age 40.


16

Sports Nutrition Incidence by Gender and Hispanic Origin

Men Women Hisp 18-44 Non-Hisp 18-44

58%69%

25%

50%

27% 22%35% 31%

15% 10%

39%

19%

Men heavier purchasers of Sports Nutrition, but not as much as many believe.

Hispanics 2x more likely to be Heavy buyers than Non-Hispanic.


17

FDMCD = 50% of Category Dollars

Sports Nutrition

Category Estimate = $2.6B Annually

% of Buyers% of Dollars

19%33%

22%27%

59%40%

Sports Nutrition: Purchasing by Outlet

FDMCD Only Non-FDMCD OnlyDual


18

TABS Group estimates the VMS category at $11.8B, which is about +3% vs. 2014 levels. Growth will likely come in Mass Market vs. Specialty

Overall incidence was down slightly. There was also a shift of above average users (3-5 Types) shifting to below average users (1-2 Types Regularly).

Probiotics was the only Type to show a penetration increase vs. YAG. All Others were flat-to-down.

Calcium, Joint and Fish Oil are seeing longer term declines in Penetration.

Women are showing gradual declines in Heavy Usage over time, this will depress category growth potential.

SUMMARY IMPLICATIONS&


19

Category Growth driven primarily by gains in Mass Market, particularly for Walmart, Costco and Rite Aid.

Specialty Outlet is flat-to-down for the second straight year. Importantly, Online saw a share drop for the first time in 8 years.

Online is the #1 outlet, followed by Walmart, Costco, Grocery, CVS and Walgreens.

Brick-and-Mortar domains lost online share for VMS. Potential causes of online declines: 1) Lack of compelling promotions, 2)

Changes in SEO, 3) Negative Herbal PR

Retailer Promotions have helped to prop up sluggish trends in the Mass Market. Promotional activity continues to have high explanatory power for Mass Market trends.



20

Sports Nutrition is estimated as a $2.6B in US Retail Sales Category. 37% of Adults 18+ purchase the category.

Ready-to-Drink Shakes are the most popular Segment with 28% Incidence and 35% Heavy Usage.

Protein Powders (e.g. Whey, Casein) tend to have lower category commitment with less than 30% of Buyers purchasing 6+ times per year.

May be “Jug-O” effect of taking consumers out of the market, or Could indicate doing good job at bring in marginal users.

Very strong demographic skews to the Sports Nutrition category: Men Heavy usage 50% higher than Women, but Women still important. Sharp dropoff in Heavy usage after Age 40. Hispanics 2x more likely to be Heavy buyers.

50% of Category sales occur in Mass Market

22% of Buyers are loyal to the Specialty Channel only: 3x more loyalty than VMS


8th Annual Vitamin and Sports Nutrition Study Webinar

Data & Analytics