Packed with Power

Consumers are increasingly embracing sports nutrition products for fitness as well as weight-loss aids. Global market intelligence firm Euromonitor expects sports nutrition products, which include protein powders, ready-to-drink supplements and hydration products, and bars, to reach $8.8 million in sales in 2019.

“Retailers are showing robust growth in the sports nutrition category, especially in the liquid segment,” says Kurt Jetta, president and founder of TABS Group, a Shelton, Conn.-based technology-enabled analytics firm. According to Jetta, the charge was led by Cytosport’s Muscle Milk, which was recently purchased by Austin, Minn.-based Hormel. “Pure Protein, Premier Protein and EAS have all done well, and Muscle Milk continues to show double-digit growth,” he adds.

A recent survey from TABS Group revealed that 37 percent of adults 18 years of age and older have purchased sports nutrition products in the past year. Adults in the 25-to-29-year-old age group account for the highest category penetration rate, at 63 percent, with a sharp drop off of heavy buyers at age 40. Fifty percent of all purchases occur in mass-market outlets.

“The results from the survey highlight that sports nutrition is a category deserving of more space and support in mass-market outlets,” notes Jetta. “With half of all sales already occurring there, that number has considerable upside, particularly given retailers’ focus on Millennials.” Jetta continues that sports nutrition products also represent an efficient way for retailers to appeal to Hispanic consumers, since Hispanics are two times more likely to be heavy buyers of sports nutrition products than non-Hispanics. Among adults in the core 18–44-year-old age group, 74 percent of Hispanics have purchased a sports nutrition product in the past year, compared with 50 percent of non-Hispanics.

Manufacturers and retailers are seeing big growth potential in the category. “We’re listening to what our consumers want,” affirms Pam Nisevich Bede, manager of professional partnerships and education for Abbott’s EAS Sports Nutrition brand. High-quality protein sources and electrolyte-heavy flavored hydrating drinks are two segments garnering attention.

Not Just for Kids

“Drinks, which are a nice blend of electrolytes but don’t have a lot of calories, are playing well in that space,” adds Bede. Cleveland-based Abbott has seen a big spike in adult use of its Pedialyte electrolyte drink, which fits the high-electrolyte, low-calorie profile. Adult usage of the brand has grown by almost 60 percent since 2012, according to the company, and adults now make up more than one-third of Pedialyte’s sales, up from a historical average of 10 percent to 15 percent. Social media coverage of the brand, as well as its use by celebrities such as Pharrell Williams, has contributed to the brand’s increased popularity with adults.

Protein supplements are also a growth area in the sports nutrition category. “Public perceptions of sports nutrition products vary by niche,” observes Ashley Sellers, a spokeswoman for Euromonitor, “but the average American views protein products more favorably today than a decade ago.”

Nikki Brown, chief marketing officer for CytoSport Inc., maker of Muscle Milk, agrees. “Sports nutrition and protein products have gained mainstream popularity as consumers have begun to understand the benefits these products can have as part of their everyday lifestyle,” she says. “We help provide as much information as possible on the benefits of protein for recovery, lean muscle growth, and to support a healthy, active lifestyle.” One tool the Benicia, Calif.-based company uses to communicate this message is its Protein Calculator, which shows how much protein a person’s body needs every day.

Take a Powder

TABS Group’s Jetta notes that protein powders and liquids are reaching a much broader audience and that, while sales of powders remain strong, ready-to-drink liquids are showing consistent growth and could outpace powders as consumers migrate to the more convenient form.

“Brand assortment is really what’s driving the powder segment; it’s not really based on brand depth,” says Jetta. “Powder sales are growing at 10 percent to 15 percent, but the item count has grown by 50 percent.”

Liquid’s dollar sales are up 20 percent, while SKU count in the segment is up only 10 percent, according to Jetta. “The average item is selling better, suggesting that the products are gaining a wider audience. Powders are never going to generate mass appeal, because they’re just not convenient enough,” he says.

Euromonitor’s Sellers notes that ready-to-drink protein allows consumers to dabble in protein products without fully committing themselves to a tub of powder. “They are a convenient, on-the-go protein option,” she points out.

Muscle Milk experienced a 4 percent jump in dollar sales to $52 million in the supermarket channel for the 52-week period ending April 19, 2015, according to Chicago-based IRI. The brand began as a protein powder and has since expanded into other categories, among them protein bars, oatmeal and ready-to-drink products.

Brown says that Cytosport has increased resources to the Muscle Milk brand, which will get a refresh this year focused on product innovation. “Our team is finalizing exciting programming ideas, with limited-edition bottles to highlight and activate our partnerships with elite athletes, college athletic departments and local communities,” she notes. “Innovation will also allow us to expand our bar business and enter new categories like smoothies in 2015.”

Abbott’s EAS carb-control product saw a 5 percent increase to $15 million in the supermarket channel, while its weight-control product jumped nearly 30 percent to $11 million, according to IRI. To make powder products more convenient for users, Abbott has introduced a circular tub for its EAS powders. “The scoop is built into the lid so it’s easy to open the lid and find the scoop with a sweaty hand,” says Bede.

The EAS brand, she adds, is growing “by leaps and bounds,” noting, “Across the aisle, everything seems to have a little more protein.” In fact, Abbott recently launched a Do More With Protein program with Minneapolis-based Target, which “includes recipes that give consumers new ways to use protein beyond a protein shake made with milk and protein powder,” notes Bede, adding that Abbott is working with other retail partners on value-added programs.

Learning Curve

In-store merchandising hasn’t helped the category gain traction, however. This might have something to do with their typical placement in stores. Bede notes, “It can be hard for consumers to find protein powder next to the pharmacy, since people who are healthy aren’t always shopping there.” Also, since endurance athletes tend to have a high economic profile, she continues, stores that aren’t courting this consumer’s needs could be missing a key opportunity.

Abbott is developing displays with an educational component that explain what specific products are for and when they should be used. “Kroger is using the new display,” says Bede. “It can be used near the pharmacy, in the dairy aisle where users are also buying milk to make protein shakes, or in the hydration aisle, near water and sports drinks.”

TABS Group research, meanwhile, showed a strong correlation between purchases of sports nutrition products and men’s shaving and grooming. “Proximity to men’s grooming,” Jetta suggests, “might facilitate a boost in sales.”

“Sports nutrition and protein products have gained mainstream popularity as consumers have begun to understand the benefits these products can have as part of their everyday lifestyle.”
—Nikki Brown, Cytosport

“It can be hard for consumers to find protein powder next to the pharmacy, since people who are healthy aren’t always shopping there.”
—Pam Nisevich Bede, Abbott