A REGIMEN RICH IN VITAMINS

MICHAEL SLEZAK

ST. LOUIS -- When it comes to merchandising vitamins, Schnuck Markets here tries to offer what many call the spice of life: variety, that is.

SN visited a Schnuck location in the south end of the city here to get a look at how the 63-store chain typically sets a vitamin section.

The section included 142 vitamin stockkeeping units, including three different brands of single-ingredient supplements, packed into 8 linear feet of high-profile space.

"Our philosophy in vitamins reflects our philosophy in total health and beauty care. That is, have a drug store variety in a supermarket environment so the customers we have that come through our store week after week will have a true one-stop-shopping experience," said Denis Oldani, the former HBC category manager at Schnuck who recently was named director of video.

"If consumers can get all their vitamin needs, all their total health and beauty needs, at our supermarket, we've effectively prevented them from going to a different supermarket or another class of trade."

Schnuck's three full lines of single-ingredient supplement products -- Nature Made, Your Life and a private-label Schnucks brand -- provide testimony to the chain's commitment to the category. Oldani said most supermarkets don't carry three lines of vitamins, but his chain has always aimed to have the best selection.

"When every supermarket had one [brand line], we had two. When every supermarket got two, we went to three. There's not too many supermarkets that carry three lines of vitamins," he said. Schnuck has had the Nature Made line for more than 12 years, Your Life about five years and the Schnucks about 14 years, according to Oldani. Vitamins were among "our first HBC private-label products, among our initial 50."

Oldani said few products have a large share of the vitamin market, barring a couple of brands of multivitamins and children's vitamins. Because sales of the vitamin section are spread out among so many products, he explained, it is important to have many SKUs within the section to reach its maximum potential.

"A lot of the category is not very brand-loyal either, especially when you get into the single-dose vitamins," he added, explaining the reason the chain carries three lines of single-ingredient supplements.

But it's not just enough to have variety and quantity of product to be a successful vitamin retailer, said Oldani, who has been at Schnuck since 1979. Having the right variety, one that is abreast of the ever-trendy needs of vitamin users, is essential, too.

Oldani summed up his views on the category by saying, "If there's a trend in vitamins out there, we'll have it."

"To quote an old phrase, 'I don't try to smell it, I just try to sell it" when it comes to vitamins, said Oldani. "If you've got manufacturers out there putting millions of dollars of advertising behind a new type of vitamin, I'm not going to quarrel with them; I'm going to put it out there so I can sell it. Whether it works or not, I don't know. I'm not a scientist or a doctor. I'm a good old-fashioned retailer."

But knowing what's the "hot" product of the moment is a good idea, too, he said.

"Fish oil was trendy for a while. Now antioxidants are the buzzword. Some of these trendy products go away totally, but some don't," Oldani said. "A while ago there was a calcium rage. All the women came in buying calcium. Then [experts] said if calcium doesn't have vitamin D in it, it's no good, so there was a wave where everyone bought calcium with vitamin D.

"You can see we still have a calcium section, though not as big as it used to be. And we have some fish oil, and our share of antioxidants," he continued. "Even though the trends come and go, the guts of the business is still in C's and E's and your name-brand, big-mover multis."

Oldani said, to his knowledge, nothing will eliminate antioxidants from their perch as the category's top sellers in the near future.

In addition to the antioxidant rage, Oldani also has noticed two other recent trends in vitamins:

· Name-brand multivitamin vendors, including Miles and Lederle, are expanding their product lines into the single-dose vitamin business.

· There's an upswing in packets of vitamins, which are often "a lot easier for customers."

Schnuck, which counts 47 food-drug combo stores under its 63-store banner, merchandises most of its vitamins in 8-foot to 12-foot sections, depending on the store, Oldani said. At the store SN visited, the section is 8 feet, but it is a high-profile section against the wall, about 84 inches high. Low-profile sections, where the gondolas are not as tall, are usually 12 linear feet.

So how exactly does Oldani decide what to do with all that space?

"I use the vendor as the expert to tell me which vitamins are hot and which are not, which are on their way up and which are going out. There are some basics you always stock: B's, C's, E's, A's," said Oldani.

To merchandise vitamins, Schnuck places single-ingredient vitamins on the top of the shelf, with children's, multivitamins and specialty vitamins on the bottom.

Single-ingredient vitamins are placed in a horizontal row across the shelf, with each individual brand on a different shelf. The single-ingredient vitamins are also run "ribboned" vertically by vitamin type, from "top to bottom for each type of vitamin: A, B, calcium, zinc, etc.

"You'll notice the Schnucks [vitamin brand] is at eye level. And that's obviously our most profitable item," said Oldani. "Our multivitamins are grouped together by type. Children, adult, multiple and so on. Our specialty items are along the bottom. We believe in having a wide assortment, no matter what section we're in."

Schnuck's mix includes a prenatal vitamin (it retails for $22.09), garlic and even a product called SSS Tonic.

"You'll find we do carry those specialty products. They'll always be toward the bottom of the shelf, but we have them," Oldani explained. "That's so if someone has a special need, they don't need to go to another store."

Oldani said his fiercest competitor in the category is Walgreens, because the vitamin category is "a traditional drug store item." Other competitors include Wal-Mart, Target, Venture and "the rest of the supermarket businesses in the area, though not to the degree as the other outlets."

The vitamin category, however, is "really only competitive in a few name-brand SKUs: Centrum, One-A-Day, Theragran, those kinds of products," according to Oldani. "I don't know if you know what the [wholesale] cost of Centrum is, but that price is close to it," he added, pointing to the product on the shelf (Centrum Advanced Formula, 60 tablets, sold for $6.49).

Single-ingredient vitamins are "not super price-competitive," said Oldani. Margins are shrinking in HBC, but in this area of vitamins, it's not as bad."

To promote vitamins, Schnuck pushes the category in its advertising "about once every three weeks, or at least once a month," said Oldani. "Advertising and signage help. And we have our compare-and-save program. In-ad, manufacturer-redeemable coupons seem to work really well in the category, too."

On single-ingredient vitamins, "you can run some different items at the same price point, like a C, B and E all at the same price point, and that seems to work well," added Oldani.

Additionally, in-store promotions can add excitement to vitamins, he said.

"We run floor displays and power wings sometimes [for vitamins], depending on what promotions are available. The seasonality of vitamins is more back-to-school. Vitamins can really move with the right time frame and placement during a peak selling time like back-to-school or winter, in a high-traffic area," he said. "There's always this perception if you're not out in the sun, you need vitamins, and since we're not in Florida, we sell a lot from back-to-school through winter."

With category management shaping both the retailer and vendor side of the vitamin recipe, Oldani said he sees a bright future for the products at Schnuck.

Category management can help retailers in their decisions on which vitamins to stock, he explained, especially when "progressive manufacturers really sit down and take a look at the category and the business and are willing to say what products make sense and what ones don't for each retailer.

"But," Oldani warned, "I still ask vendors to show me everything. They can give me their recommendations; that helps, but I want them to show me everything they have, so I have all the information I need to make the best decision. Any knowledge you have helps you."