Adapt Or Die: Sports Nutrition Industry Is Changing
I don’t know about you, but I feel as if the world is changing faster and more dynamically than any other time in recent history. If you work in the sports nutrition industry, you already sense that your professional life is not insulated from this extreme environmental change. Everywhere you turn, iron-clad brands are now showing cracks in their armor. This is especially true for legacy sports nutrition brands. These brands are feeling the squeeze to stay relevant against an onslaught of emerging competitors that have entered the market, due to today’s lower barriers of entry stemming from technological advancements. Over the past decade, the increased popularity of social media and e-commerce has made it easier for new brands to communicate with and sell their products directly to consumers. This has given rise to a plethora of new sports nutrition startups, that are in turn fragmenting the market and fundamentally changing how consumers purchase products.
Gone are the days of generating a reliable, perpetual growth trajectory through the previous sales and marketing models that fueled decades of industry success. These legacy sports nutrition brands now face great pressure as consumer behaviors shift and the channel landscape changes. To win in the coming years, sports nutrition brands need to reduce their reliance of, and diversify their physical retail channels. Despite sports nutrition products being a relatively difficult category for consumers to shop for, online, without prior product knowledge, online sales continue to dramatically increase. This increase of the self-directed consumer has given online retailers like Amazon a further cognizance to invest in the category. Today, sports nutrition brands should not be pondering whether they should have an e-commerce presence, but rather what level of presence they need to sustain long-term relevance in the market. Reality is, sports nutrition brands must start building an extensive digital commerce and marketing strategy to be able to compete with more agile, digitally-native challengers.
With challenges come opportunities to grow, and the global sports nutrition market has sustained its feverous 7 percent compounded annual growth rate (CAGR). Moreover, lifestyle and mainstream consumers have been aggressively entering the market with an interest in “healthier for you” functional food and beverage sports nutrition products that are growing at 50 percent more than the traditional industry CAGR. These popular functional food and beverage offerings have forced food, drug, mass, and convenience (FDMC) channels to expand their healthy living and active nutrition sections. This perfect storm of opportunity delivers an advantage for legacy sports nutrition brands that can invest in these brick and mortar channel relationships and product innovations that have higher barriers of entry relative to e-commerce and traditional offerings of capsules, powders, and pills.
Even with the dynamically changing business landscape, hope should not be lost for legacy sports nutrition brands, as they can take a page from the competition’s playbook and pair it with industry expertise. While presenting brands with unique challenges, the sports nutrition industry is ultimately a space filled with innovation and opportunity. Legacy sports nutrition brands that are romantic about yesteryear’s sales and marketing models or channel preferences, will be left behind with the Millennial buyer.
I would like to leave the readers of this article with one final question…
Will your brand can take advantage of the industry’s continued growth by adapting to win in this new environment or will you be left in a race to the bottom?