BUILDING SUPPLEMENTS

CHRISTINA VEIDERS / Additional reporting: MATTHEW W. EVANS

PRINCETON, N.J. -- Well known as a destination for its fresh foods, produce and top-quality gourmet meals, Wegmans Food Markets, based in Rochester, N.Y., has chosen an integrated merchandising approach to its vitamins and nutritional supplements.

SN visited Wegmans' newest 100,000-square-foot superstore here in this highly competitive, upper-income university town to find out how it merchandises the hot-selling nutritional-supplement category. The retailer declined to answer questions or participate in this category profile.

For the 52 weeks ended June 28, vitamin/supplement sales rose 11% to $3.2 billion across all three mass-market trade channels, according to statistics compiled by Information Resources Inc., Chicago. Sales increases generated by Northeast retailers were slightly higher, nearly 15%, to $543 million. Both on a national and regional basis, supermarkets are posting double-digit dollar growth, yet growth in unit sales remains at a minimum. Nationally, sales at supermarkets rose nearly 11%, to $775 million. Units were up just 0.16% to 114 million. Food chains in the Northeast posted dollar volume up 18%, to $152 million, and unit volume rose 0.96% to 23 million.

Drug stores, both nationally and regionally, currently do the bulk of the vitamin/supplement business. However, when looking at Northeast retailers, food stores have a greater share of category sales than the mass merchandisers.

Wegmans' Princeton store, situated off the densely trafficked U.S. Highway 1 at 240 Nassau Park Boulevard, opened in August with a Target as its neighbor and a Wal-Mart directly across the street. Other retailers within close proximity are Drug Emporium, Big Kmart, Grand Union, Pathmark Stores and CVS. There is also a Vitamin Specialties store and a Holsome Teas & Herbs shop 10 miles away in Princeton. As a food destination, Wegmans draws from a highly dense population and is situated within an hour's train ride from New York City and Philadelphia.

Nature's Marketplace serves as Wegmans' one-stop destination for whole health. The 5,000-square-foot boutique, which specializes in all-natural, organic foods, and other beauty care and wellness-related products, is home to an extensive dietary supplement offering that beats most everyone in the area in terms of breadth of selection, assortment and presentation. However, when it comes to price, Wegmans is most likely not the cheapest in the area. Nature's Marketplace has evolved into a format similar to that found at natural-food supermarkets such as Whole Foods Market and Wild Oats Markets.

The format is distinctive in appearance from the rest of the store. Wooden fixtures and a suspended canopy ceiling with hanging flora convey the natural aspect of the department -- "high-quality foods, free of artificial colors, flavors, preservatives and sweeteners, and certified organic items whenever possible."

In the center of the department are three 16-foot gondola runs containing approximately 1,500 to 2,000 stockkeeping units of supplement specialties, vitamins and natural herbal and homeopathic products. This section is located in front of a glass-enclosed counter, containing aromatherapy products and essential oils, manned by a store clerk.

Various shelf schemes are used to organize one seven-shelf section. The specialty gondola, which contains energy and power supplements on the opposite side, is divided by function. Products fall under men's and women's health; brainstorm, relaxation, hair, skin, nails; joint support; essential fatty acids; antioxidants; energy/fatigue; children's allergies; immune support; and digestive.

Facing specialty supplements are multiple and alphabet vitamins on eight shelves, merchandised by their respective type. Brands include Schiff, Twinlab, Natural Factors and Wegmans' private label.

On the oppose side of the natural vitamin section, Wegmans merchandises about 350 SKUs of natural herbs. The 16-foot, eight-shelf gondola has four sections that contain products from Nature's Way, Twinlab, Herbal Factors and Natural Factors, Herbscience and Wegmans' private label. On a forward-slanted top shelf that ran above the first three sections, dropper bottles containing liquid herbals were merchandised. In the fourth section were two 4-foot shelves of boxed Boiron herbs and homeopathic items, above three shelves of A. Vogel herbs. On the bottom shelf were several natural cleaning products.

In addition, an L-shaped 16-foot section, located on a back wall adjacent to both Nature's Marketplace and the pharmacy, contained what a clerk described as more popular name brands and a combination of items found on the three supplement gondolas. The organization of the section was a bit confusing. Products were under headings like herbs, body benefits, vitamins, immune support, multiple vitamins, senior health, women's and men's health, stress and children.

The numerous brands on the "L" included Centrum, 1-A-Day, Twinlab and a prominent mix of Wegmans' private label. Wegmans merchandised Advanced Formula Centrum with its private-label equivalent. At $6.97, the retailer's 130-count store brand was positioned next to a specially packaged Advanced Centrum 130-count, regularly priced at $8.99.

The special Centrum package was discounted at Wegmans and promoted with a small shelf sign advertising a 60-cent discount at $8.39 for shoppers-club cardholders. That same two-bottle Centrum package was merchandised on one of two round special-display units right in front of the "L." Centrum Silver 100-count, also on the L-shaped set, was discounted for all shoppers with a small shelf sign advertising a $2 discount from the regular price of $9.97. Target's Centrum Silver 100-count was priced at $8.49.

Wegmans also had several hanging end-panel displays of vitamins it cross promoted in the health and beauty care department across from the pharmacy. Featured were Wegmans' Vitamin E, Multivitamin and Vitamin C.

In merchandising the category, the retailer also emphasizes information. It distributes its monthly Wegmans Nature's Marketplace monthly magazine that focused this month on women's health.

At the end of the natural-supplement gondolas, directly in front of the manned counter, was a telephone and directory containing a menu of herbs and supplements.

To obtain information on supplemental benefits, customers could pick up the phone and dial the number that corresponded to the item listed in the directory.

The section also contained an 8-foot reading rack of health-related publications.