An interesting dynamic is emerging around the market for sports nutrition products. Some companies see it as a stepping stone for growth while others already in the category are transitioning away from it in an effort to grow into the much larger market for products focused on health and wellness. What is forming is a blurred category featuring products geared toward performance, recovery, hydration and overall health.
The blurred focus is a product of the growing number of mainstream consumers who are trying to maintain active and healthy lifestyles, according to Fortitech, a business unit of DSM, Heerlen, The Netherlands. In its latest white paper, "Strategic nutrition for sports," Fortitech said the greater focus on fitness and health is reflected in the number of gym memberships in the United States. There are now more than 30,000 health clubs that cater to the needs of 45 million members and create an industry with revenues approaching $19 billion.
"These market trends support the need for food companies to develop more of these products directed to different segments of the population, including weekend warriors, sedentary individuals initiating exercise programs, active regular exercisers, dieters, active healthy adults, elderly, athletes and other sport enthusiasts," Fortitech said.
On Aug. 12, The Dr Pepper Snapple Group established a more direct position in the market when it took an 11.7% stake in BA Sports Nutrition L.L.C., the maker of the BodyArmor branded sports drink. The investment is worth approximately $20 million, according to Dr Pepper Snapple.
"We've been pleased with BodyArmor's growth over the past two years and believe it has strong potential as a premium sports drink," said Rodger Collins, D.P.S. president of packaged beverages. "It's already a great part of our allied brand portfolio, it has a management team with the experience and passion to succeed, and we're looking forward to contributing to that growth and success over the long term."
The BodyArmor SuperDrink was introduced in 2012. Ingredients in the product's formulation include coconut water, vitamins and cane sugar. It may be perceived by consumers as clean label since it has no artificial flavors and is available in seven flavors.
"We are very excited about the investment by Dr Pepper Snapple Group," said Mike Repole, co-founder and chairman of BodyArmor. "Through our partnership with D.P.S., we are continuing to gain distribution throughout the United States, and we are on our way to becoming a national brand. BodyArmor has tremendous momentum, and the strength of the D.P.S. organization and its system will continue to fuel our amazing growth for years to come."
Dr Pepper Snapple has been a distributor of the BodyArmor brands since 2013. The investment also marks the second time the beverage manufacturer has worked with Mr. Repole. Prior to launching BodyArmor he was a co-founder of vitaminwater, which was a part of Dr Pepper Snapple's legacy bottling and distribution system. Vitaminwater and several related brands were later sold to the Coca-Cola Co. in 2007 by its parent company Energy Brands, Inc. for approximately $4.1 billion.
The challenge of establishing a position in the market for sports nutrition products that is dominated by such brands as PepsiCo's Gatorade, Coca-Cola's PowerAde, Glanbia's GPN and Abbott Nutrition' EAS, among others, may seem daunting, but there are those who are willing to try. This past May, The Glukos Company, Inc., Phoenix, made its debut. The company manufactures and markets what it calls "natural performance energy foods." Product formats in the new line include gels, powders, tablets, gummies and bars. The products are formulated with water, glucose and such electrolytes as potassium and sodium.
Another company attempting to gain a foothold in the category is PowerIce, Inc., Steamboat Springs, Colo. The company's line of frozen bars are formulated with electrolytes and have the dual benefits of offering hydration benefits as well as cooling athletes post workout. The line of products is available in four flavors — lime, grape, orange and pomegranate raspberry — and are 30 calories per serving.
This past March, Myos Corp., Cedar Knolls, N.J., introduced its Re Muscle Health line of products, which includes protein bars, shakes, pudding mixes and ready-to-eat powders. The products are formulated to help rebuild and maintain lean muscle and are for consumers who are seeking a product with a natural market positioning.
Re Muscle Health products are formulated with Fortetropin, which is a fertilized egg-based protein and lipid complex that increases protein synthesis and inhibits muscle degradation, according to the company. The products in the line also have 20 grams of protein per serving.
In a report released this past April, the market research firm Euromonitor International said the sports nutrition market is expected to experience a compound annual growth rate of 8% from 2014 to 2019. Health and wellness trends are expected to remain important as consumers seek to mitigate health issues, such as diabetes and obesity, by engaging in more rigorous workouts, according to Euromonitor. Consequently, demand for sports nutrition is expected to be positive as consumers seek products to assist in achieving more effective workouts and shorter recovery times. The on going mainstream positioning of sports nutrition is expected to increase consumer familiarity with products as well as increase channel distribution, further driving growth over the forecast period.
The increased penetration of sports nutrition products into the mainstream market may be one reason GNC Holdings, Inc., is in the process of shifting its product portfolio so there is less of an emphasis on sports nutrition and more of a focus on health and wellness.
"GNC has built a tremendous, tremendous business focused primarily on the performance side or what might be sometimes called the sports nutrition side of the business, which is a great sector and has historically been one of the fastest and, at times, the fastest growing segment within the V.M.S. (vitamin, mineral and supplement) sector," said Mike Archbold, chief executive officer of GNC, during a June 2 presentation at the Stephens Inc. New York Conference. "But that sports nutrition/performance segment is about $5 billion of an industry, which is great, but the broader industry written as health, wellness, and performance is a $35 billion industry with very consistent growth.'
Through GNC's customer loyalty program, the company has begun to engage its most loyal customers in learning about their health and wellness goals beyond sports performance and recovery.
"Everyone has unique health, wellness, and performance goals," Mr. Archbold said. "So we determined that we could go to a broader customer set and focus on the health and wellness consumer, and to do that, one of the first things that we did was focus on broadening to functional foods, some probiotics, some nature-based proteins, plant and natural-based proteins."
During his presentation, Mr. Archbold was upfront about the fact the changes GNC has been making will not be "nirvana."
"This is retail," he said. "We have 2,000 s.k.u.s (stock-keeping units) in the typical GNC store and these are important to begin the process of broadening our customer base."