STUDY OR NO, SUNDOWN'S UP ON VITAMINS

CHRISTINA VEIDERS

Fort Lauderdale, Fla. -- Controversy is not new to the vitamin industry. For years studies have come out proclaiming and disclaiming the health benefits of various supplements.

The latest reports to hit the front pages of the national media involved the preliminary findings of the effects of antioxidants in preventing cancer. The research was sponsored by the National Public Health Institute in Finland and published in the New England Journal of Medicine this spring.

The study indicated that, contrary to previous reports, use of antioxidant supplements such as beta carotene and vitamins A and E taken by 29,000 middle-aged men in Finland, all of whom smoked, showed no beneficial effects in preventing cancer.

"It made national news because there has been such an avalanche of positive articles," said Nick Palin, senior vice president of Rexall Sundown here. "The media elected to showcase this one study, which is far from conclusive. The media loves controversy."

Palin said the vitamin industry is "consumer-driven" rather than driven by manufacturers or the media. He pointed out that despite little positive publicity in past years, the industry has grown into a $3 billion business. He expects vitamin business growth to continue, given the direction of the country in containing health care costs and the consumer trend to self-medication. "In the next few years, wellness will be a bigger issue than ever and vitamins will play an important role in keeping people healthy and enabling them to have more active lives," he said. "You will see more vitamin supplementation and alternative remedies in the future."

Despite the negative publicity about antioxidants, Sundown's sales continue strongly for antioxidants as well as multiple vitamins, calcium and herbal supplements.

Rexall Sundown reported net sales of $93.1 million last year, a 25% increase over the previous year.

The supermarket industry also is enjoying double-digit increases in the category. For the 12-month period ended May 31, supermarket sales of vitamins were up 16% to $493.9 million, according to Towne-Oller & Associates, New York, a subsidiary of Information Resources Inc., Chicago.

"We look upon supermarkets as an untapped area of opportunity," said Palin. Presently, about 20% of Sundown's sales are generated at supermarkets, 60% at drug stores and the remainder at other retail outlets, including mass merchandisers.

Palin said the biggest challenge he faces is gaining proper supermarket shelf space.

"It's often a Catch-22 scenario," said Palin. "Those supermarkets that allocate too little space don't do a lot of business [in vitamins]. Some that allocate enough space wind up putting in a multitude of brands at different price points that result in redundancy of product."

Sundown's philosophy is to create a vitamin center within the retail environment with a broad selection of products. For example, Sundown recommends carrying one brand with 80 stockkeeping units and a private label in an 8-foot section, instead of replicating the same 45 to 50 stockkeeping units among multiple brands.

"We'll pack in a lot of SKUs and thus reach a broader consumer base and capture more pedestrian traffic for the retailer," Palin explained.

In managing supermarket shelf space, Sundown will planogram the vitamin location, section and types of products based upon store sales, demographics, the store's overall health and beauty care department, types of brands carried and whether or not the store has a pharmacy. Palin's optimal profit goal for turning the vitamin section is six to seven times a year.