True paradigm shifts are only visible in hindsight. You won’t know it was the-day-everything-changed on that day itself, and, of course, it’s harder to capitalize on the moment when that moment has already passed.
But sometimes you get a glimpse of it in the headlights before that moment recedes into the rear view mirror.
Such is the case with supplements in the practitioner channel. Multiple factors and forces suggest the channel, and the legions of practitioners creating the future there, are drawing closer to a number of next big things, any or all of which could drive the supplement distributors and brands working in that space into a new era of acceptance and success.
It’s not that growth is in urgent need of a new era. Including health clubs in the channel, NBJ estimates practitioner supplements sales grew 7.8 percent to hit $3.7 billion in consumer sales in 2016. For perspective, the entire supplement industry looks to come in at 6.2 percent growth. By-the-book projections have the channel growing in that range through the end of the decade, but, more than perhaps any other channel, the potential for a major boost in momentum is aligned across a convergence of trends. Some combination of those trends coming to fruition could easily spring the practitioner brands past the modeled projections into a new era of growth.
The forces and factors at play are only part of the story primed to play out in the channel. Every story needs a setting, and in this case the setting is the broad range of practitioners that take products directly to consumers. Naturopaths, chiropractors and acupuncturists have always been central to the plot, but more MDs join the integrative medicine community every day, and the growing field of players now includes more certified nutrition specialists and health coaches than ever before. Dentists, optometrists, physician assistants and specialist are now part of the story. Nutrition is making inroads—and sales—in professions where penetration was shallow to nonexistent in years past.
Every story needs conflict too, and conventional medicine plays the bad guy in almost every practitioner epiphany. The path from conventional to integrative practice is paved with personal experience, some instance or episode when drugs and invasive interventions failed to provide relief. Indeed, in an NBJ survey, more than half of the allopathic doctors who choose to sell supplements attribute their move into the integrative modalities to a frustration with the pharmaceutical options.
Stories also need heroes. For the practitioner channel, a whole posse of heroes could be ready for major roles.
The biggest white hat belongs to personalized nutrition: the concept that genetic testing and more traditional but also now more accessible lab tests could help practitioners design supplement regimens that lower health risks specific to the individual. Such tailored plans also stand to improve the quality of life for people who never before had much more than a “cucumbers give me gas” view of how nutrition interacts with their genetic makeup, their microbiome and every organ and system in their bodies.
Other hero trends include baby boomers moving into old age with a consciousness that they don’t have to age like their parents and an awareness of the toll of polypharmacy and overprescribing on the elderly. Millennials, more likely to be uninsured or underinsured, have a higher rate of trust in supplements than any age group surveyed by NBJ and are intuitively inclined to use digital tools that could reshape how they receive care. Technology—from basic activity monitors like the FitBit to the Internet of Things that might link those monitors with scales and what’s-in-the-fridge apps—could offer practitioners a look over their patients’ shoulders and tools to keep them in compliance with their regimens (by the way, Millennials account for more than a third of all supplement sales). Then there is the great unknown of politics, with the new administration stumbling in healthcare reform that would have included healthcare savings account subsidies that could free up money consumers might spend on alternatives to allopathic care.
The issue of public trust—a villain, or at least a threat to the supplement industry as a whole—swings into the hero category in the practitioner channel. Among the biggest motivations for seeking a practitioner’s brand recommendation, or buying that brand right in the office, is a need to trust that the supplement they are buying delivers on quality and efficacy.
Setting, heroes, and villains combine to tell a story that’s not without peril, but gives reason to believe in happy endings.
The story from the lab
Finding a way to those happy endings is the challenge for individual companies that want to play a part moving the story forward.
For the top companies, among the most important strategies is establishing legitimacy with both the public and the practitioners, especially physicians. Kyle Bliffert is the president of professional brands at Atrium Innovations, overseeing practitioner brands Pure Encapsulations, Seroyal and Douglas Laboratories. Bliffert sees the MD arena as holding the greatest potential for growth and says Atrium’s involvement with the high-profile research institutions brings the kind of credibility that MDs want to see. The company’s products have been the subject of more than 30 peer-reviewed and published studies in recent years, an achievement noted in NBJ’s decision to give Atrium the Science and Innovation Award for 2015, the same year Atrium brand Pure Encapsulations announced a four-year, $1 million partnership to fund clinical research, education, and medical curriculum development at the Cleveland Clinic Center for Functional Medicine. More studies are in the works, and demand for the clinic’s services is so high that management recently announced plans to double the size of the operation. “When that happens, it drives positive attention to our efforts in functional medicine,” Bliffert says.
Metagenics President and CEO Brent Eck also believes a beachhead in mainstream medicine is vital and calls his company’s focus on clinical research a key to building those connections. Last year, two studies sponsored by Metagenics were published in the Journal of the American Medical Association, a publication famously unfriendly to supplements. It’s a big credibility win, he says. “That’s what our clinicians are asking for.”
It’s certainly what Fred Pescatore is looking for, and he’s already among the converted. The New York MD has written several books on nutrition, appears on TV shows promoting natural medicine and has two supplement lines, one sold in the office and another through an online newsletter. But he still demands the science. He wants quality, backed by science, enough that he can “unequivocally say ‘You are going to take this and this is going to happen.’”
Molly Maloof, a San Francisco MD who focuses on the intersection of tech and nutrition wants the same thing. “At the end of the day, it’s all about what is the science behind the special sauce?”
Among practitioners surveyed by NBJ, clinical trials for the products was the third most important factor in choosing what brands they’d sell, right behind efficacy and trust. For practitioners, especially the MDs, science is always the question and the answer is always “more.”
In personalized nutrition, science is the next and endless frontier, and practitioners want to see supplement companies exploring that frontier for them. Only a third of the practitioners in our survey report using genetic tests currently, but 54 percent say they plan to do so. More than a quarter say they want supplement companies to partner with genetic testing companies to push the research and validate the personalized nutrition promise.
Metagenics has been on the leading edge of that movement, and that research, since the company was founded in 1983. They intend to stay there, Eck says. The rest of the world may be catching up—“Epigenetics is at the center of what everybody is talking about these days,” Eck says—but the science keeps moving faster. Professional channel supplement makers, and programs like Pure Encapsultions’ PureGenomics genetic analysis platform, are helping practitioners keep up.
The practitioners of the future are going to expect supplement brands to keep up.
Impersonal personalization
For practitioner brands, the promise of personalized nutrition carries an ironic kind of competition. Call it “personalized lite,” or an oxymoron of one-size-fits-all customization, but companies attempting to personalize with an online algorithm, or something as simple as a mobile-friendly questionnaire, could steal a share of a space so seemingly well suited to the channel. New entrants to the supplement space like Care/Of are presenting supplement regimens in daily packets that are “personalized” by a 5-minute online exercise in questions as probing as how many servings of fish a customer might eat in a week and whether they live in the northern or southern regions. Even more advanced algorithms that incorporate genetic testing and biomarkers, as the Bay Area-based VitaGene is attempting, will have limitations. The difference between a patient’s self-reported answers and a practitioner’s office visit and lab report observations could be critical.
Not surprisingly, the gimmicky and glorified questionnaire approach has few fans in the practitioner ranks. Personalized medicine is complicated. Even the most studied practitioners need constant updates on the emerging science. There’s not an app for that, after all. “I don’t think we’re going to reduce medicine to an algorithm,” says Corey Schuler, director of clinical affairs for Integrative Therapeutics.
Designs for Health founder and CEO Jonathan Lizotte is equally dismissive. “I do not believe that there is some online form that you are going to fill out and you’re truly going to figure out what you need to achieve optimal wellness as an individual,” he says. “It’s just not possible without a quality healthcare practitioner.”
Innovations in retail present additional challenges. Industry observers predict brick-and-mortar stores as mainstream as a CVS could install kiosks that build regimens of recommended private label supplements. One Midwestern mass grocery chain has a dietitian in every store. It’s innovative. It’s pro-supplements. But it could also cut practitioners out of the picture.
Cyber shaped
Anybody with a sick kid or a cough that won’t quit has consulted that most ubiquitous of practitioners, Dr. Google, but whether the bewildering information onslaught of the internet is bane or boon to the practitioner channel remains unclear. A little knowledge is a dangerous thing, but a little curiosity gets people in the door.
Doctors like Pescatore report patients doing their homework before they even get to the office. “They come in with all this knowledge and we can actually have very educated conversations about it,” he says.
People who believe everything they read online are all too common, but people who read just enough to get confused and want an answer from a real person, a real expert, are probably not rare either.
The Amazon effect is where the internet presents its biggest challenge to practitioners and practitioner brands. Shopping online offers the instant and endless price comparison, with cyber outfits consistently beating the practitioner premium with big discounts. The discounts come on products the brand intends to be practitioner only, but the channel faces the same problems as every other supplement company doing battle with the shadowy cyber storefronts. Companies in the practitioner channel are attempting to control that and help practitioners hold on to sales, but packed somewhere in the channel-splintering threat of online sales lies another of the forces and factors that could boost the challenge.
Distributors like Emerson Ecologics and Natural Partners are not just making it easy for practitioners to hold onto sales. Emerson’s Wellevate and Natural Partners NP Script offer more than an online sales portal. Practitioners are presented with an online presence with room for branding and outreach, as well as layers of education to engage patients and clients. Auto ship and auto reminder programs increase compliance, which increases the likelihood of positive outcomes, which, in the end, increases loyalty to the practitioners and builds a reliable income stream into their practices.
Brands are also trying to get into the game by connecting consumers with practitioners. There is a great deal of space for that feature to evolve, with a more carefully crafted user experience key to helping build momentum for the channel.
For nutrition, the internet has been called “the great equalizer.” Trends that start in the cities get to the heartland faster than ever. People in the country can know as much as people in the cities, instantly. That’s becoming obvious in the sales distribution. Naturopaths and integrative physicians aren’t stuck on the coasts anymore. Every company interviewed for this report is seeing sales growth in the Midwest.
“The upper Midwest has been our shining growth star,” says Jonathan Lizotte, founder and CEO at Designs for Health, an MD-focused brand.
Metagenics’ Eck says their sales distribution is identical to a “heat map” of the U.S. population. It’s national, not regional. It’s a simple matter of “where the people are,” Eck says.
Making it easy
Consumers go to see practitioners because they’re not sure what their nutrient needs are and they’re not sure what products they should take to meet those needs. The challenge for many practitioners is that they are equally confused. That’s what Bliffert sees as a primary issue facing physicians, and the company is focusing on building collections of products suited to a condition or need into “platforms” that the doctor can use to narrow the focus. “It’s a ‘Where do I start?’ for the consumer, but it’s also a ‘Where do I start?’ for the practitioners,” Bliffert says.
The platforms can be condition specific but also specific to a specialty. There is a platform for weight loss, a platform for cognitive concerns. Bliffert says the Atrium brands have focused more efforts on streamlining the practitioner’s options. “It gives the doctors what they are looking for, which is solutions,” he explains.
That’s one avenue of outreach, but education remains a primary entry point for new customers. Atrium and other companies are deeply involved in education. Metagenics is engaged in three or more educational events every week. With the number of integrative medicine programs growing, there have never been more opportunities to connect with practitioners. This is crucial to the mission of moving supplements into mainstream medicine.
“The biggest risk right now is identifying where the MDs are coming to market and making sure you are there,” Bliffert says.
Companies must also be there with the highest quality products. That, coupled with the science, is what Bliffert calls a compelling “reason to exist” that resonates with physicians and other practitioners. Educated and aware, they are staking some piece of their reputation and practice on the line, which means practitioners have questions that the customer in the aisle at a natural retailer would never know to ask, and the top brands in the channel are there with answers.
At Emerson, part of the answer is the EQP Emerson Quality Program. Emerson thoroughly vets manufacturers with GMP inspections and testing at a third-party certification level. Brands boast of quality assurance programs that represent a substantial share of the company budgets. At Designs for Health, 10 percent of the employees work in quality assurance. Bliffert says of the Atrium brands, “I would challenge any company to try and at least match what we’re doing.”
Consumers in the channel expect that. They know they are paying for quality, and they pay for it because they trust the practitioner. NBJ consumer research last year found that practitioners are the most trusted source of information on supplements. That leaves room for practitioner brands to manufacture premium products and charge premium prices.
“We have flexibility that a lot of the retail market doesn’t. We are not compelled into competing on price nearly as much as the retail market,” Lizotte says. Quality eclipses cost in an office setting. “There’s less of a pushback from our end customer.”
Shared vision
Trust and quality issues, however, are not limited to what goes into the bottle.
Companies are also engaged in a constant vetting process for the practitioners they serve. It’s an area where brands have cooperated before, helping to identify questionable certifications and diploma mills handing out unearned degrees to unqualified “practitioners.” Defining what qualifies a person to be a wellness or health coach is among the current issues.
Here, more than in some categories within the supplement industry, there is a sense of shared vision and cooperation among the practitioner channel brands. With science and quality at a premium, the barrier to entry in the space is high, and up-and-coming new entrants are virtually non-existent. Small brands make up a surprisingly large share of the pie—brands with less than $5 million in annual sales are still 16 percent of the channel—but many of those are physician’s private label products.
More than a quarter of all wholesale sales in the channel come from three brands: Atrium Innovations, Standard Process and Metagenics.
It makes for a tight peer group with common interests, common goals. As Eck puts it, “We’re all just here to help these practitioners down the journey of functional medicine.”
That shared vision is going to be important to bring the channel to that elusive tipping point, where all the forces and factors set to propel the cause combine to make supplements and nutrition a first-choice option for both mainstream medicine and consumers.
Personalized nutrition, a nutrition-focused self quantification movement, the biohackers, new interests in healthy aging, the internet of things—the cast of possible protagonists in the story of the practitioner channel is both numerous and robust.
There have been multiple tipping points to bring alternative/natural/complimentary/integrative medicine into the national health conversation. The tipping point that brings supplements and nutrition more deeply into the mainstream MD conversation remains elusive. A 2014 assessment by Kaiser Associates found that just 25 percent of practitioner channel supplement sales came through MDs. That could sound like a small share of the pie, but the same study found that only 2 percent of MDs were selling supplements. At the same time, the Kaiser research showed 31 percent of MDs recommend supplements for general health. The math is obvious and encouraging.
Bliffert discounts the idea of a tipping point. What the channel needs is “a catalyst,” he says.
“What keeps me up at night is how do we become further integrated into this massive machine that is medicine in the United States?” The catalyst may not come from inside that machine or inside the channel at all.
In interview after interview for this issue, the same theme came up again and again. Researchers are driving the science. Practitioners are insisting on quality and seeking education. But, like many great movements in healthcare, the changes coming to the professional channel are going to be driven by the people receiving the care. Consumers walk into the practitioner’s office looking for trust and expecting quality.
Nutrition is healthcare. And the public knows that.
“The patient of the future,” says Bliffert, “is going to demand it.”
For those patients, the paradigm shift has already happened. For brands in the practitioner channel, the opportunity is still to come.
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