TABS Analytics: Walmart helped propel online VMS sales

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TABS Analytics: Walmart helped propel online VMS sales

By Michael Johnsen - 07/20/2017

SHELTON, Conn. —  Online sales for vitamins, minerals and supplements surged 20% this year, growing from $2 billion in 2016 to $2.4 billion in 2017, according to TABS Analytics’ 10th Vitamins, Minerals and Supplements Study. Much of the growth is due to the performance of brick and mortar online retailers, which outpaced Amazon and other pure play outlets in growth and gained almost 19 percentage points in online transaction share.  



Brick and mortar stores sales of VMS grew 3%. TABS Analytics estimates the annual U.S. VMS market grew 6% over 2016 and now stands at $13.5 billion in sales annually.



“This is really a breakout year for Walmart’s online sales of VMS which have helped propel the online sales for the VMS category to a ten-year high of 17% of all sales,” stated Kurt Jetta, president TABS Analytics. Although Amazon grew its number of transactions by almost 15%, it experienced a major nine-point loss in share as the gains did not keep pace with brick and mortar retailers’ online gains in purchases, which nearly tripled from last year.



“With our last three studies in baby care, personal care and vitamins there is mounting evidence that brick and mortar retailers, particularly Walmart, are carrying a larger load at bringing ecommerce retail to the masses,” Jetta said. “Prior TABS studies have shown a limited market for consumer packaged goods online, primarily focused on upscale consumers.  We are now seeing brick and mortar gain share in ecommerce by expanding the demographic base and offering a broader assortment of mainstream brands to online shoppers.”


Online sales are strong and growing.

According to the TABS analysis, online purchasing for VMS grew dramatically, increasing 20% over 2016, led by significant increases by brick-and-mortar retailers’ online sales, especially Walmart.com. Amazon and Walmart are the No. 1 and No. 2 online retailers for VMS, respectively, with Amazon accounting for an estimated 4.5% and Walmart.com accounting for an estimated 1.6% of all market transactions in the category.



VMS category shows signs of maturity.

Mass market (food/drug/mass/club/dollar) sales growth doubled to 4% in 2017 due to pricing and volume growth. However, there have been no new types of VMS products that have exhibited sustained growth, and channel shifts have moderated overall. “With ten years of VMS studies and data to draw from, VMS is showing all the characteristics of a mature category so 2018-2020 gains should moderate to the plus 3% to 4% range, assuming pricing of plus 2%," Jetta said. "At this level, continued dramatic growth in ecommerce would, by definition, come at the expense of brick and mortar store sales although we have not seen that shift yet,” he said. “With only one year of the recent ecommerce surge, however, continued dramatic growth in ecommerce is not assured.”



VMS volume and dollar sales grow.

VMS category purchase penetration reached an all-time high of 78% for the TABS study. Following two years of relatively flat growth, VMS sales volume increased slightly as a result of greater purchasing by heavy buyers and higher penetration from those who purchased just one or two types of products regularly. Dollar sales for the category grew 6% to $13.5 billion.



Heavy buying gains momentum.

Heavy buying increases (consumers purchasing 3 or more types) were driven by: gains from very heavy buyers (6 or more types purchased), younger buyers (ages 18-54) and women.



Adult multivitamin reverses declines, with niche products making first-time appearances.

Adult multivitamins increased this past year, reversing a three-year decline. This year’s survey also includes two new categories - hair/skin/nail multivitamins and brain supplements - both which appear to be types with niche appeal with 8% and 2% of adults purchasing these types, respectively.



Vitamin outlet trends since 2005 track broader trends in retail.

FDMCD penetration grew by 15% from 59% of adults to 68 percent of adults. Specialty outlets (such as natural food or nutritional specialty outlets) saw a slight decline in penetration from 19% to 18% and ecommerce penetration went from 9% to 13%.