Method Co-founder Looks to Clean Up Vitamin Aisle

Target Hopes Better Packaging, Product Design of Olly Brand Will Give It a Boost

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Vitamins and supplements have gotten plenty of bad press the past 18 months. Even before that, they turned off many people with sprawling shelves filled with drab packages bearing confusing claims or murky benefits.

Target, meanwhile, has long failed to get its fair share of vitamin and supplement sales, said Kurt Jetta, CEO of Tabs Group, a marketing analytics firm that tracks the industry. He believes the category has never been high among priorities for core Target shoppers.

Enter Eric Ryan, co-founder of Method, a company that began working closely with Target more than a decade ago to help transform a cleaning-products category that was, similarly, focused far more on chemistry than on design.

When he looked at vitamins and supplements, he saw a similar challenge. "I could not find a worse aisle in the store that was difficult to shop or had more uninspiring brands," Mr. Ryan said. "Shoppers would literally stress out trying to find something healthy for them. It's just a sea of confusion."

It was the perfect opportunity. "I love Method," he said (he continues to work there even after its 2012 acquisition by Ecover). "But I was getting the itch to start with a blank sheet of paper again. I started looking across different aisles or big tired space that needed a cultural shift."

He first approached Crispin Porter & Bogusky co-founder Alex Bogusky to get inspiration, then took the "germ of the idea" to Target in the form of 10 slides on an iPad, outlining the opportunity and ways it might be executed. He proposed "to take the best of your thinking, the best of our thinking, and look at how we might reframe the category," Mr. Ryan said.

The Method experience helped open the door, and it didn't hurt that Mr. Ryan also worked with Target to introduce its Made to Matter collection of "natural, organic and sustainable brands."

This launch, Mr. Ryan said, "was very different than the 'snowball's chance in hell' I was told the first time I pitched Method."

By March, the new brand, Olly, was in a TargetExpress small-format store in San Francisco. And by April it was in 1,800 Target stores and on the front page of the retail giant's weekly circular. Early results indicate the gamble is paying off for both sides. Olly generated more than $1 million in sales during the first two weeks it was broadly available at Target, Mr. Ryan said.

He's joined at Olly by CEO Brad Harrington, former CMO of vitamin marketer Shaklee. Product design was handled in-house, led by creative director Rachel Loyd, a veteran of Plum Organics.

"I'm a big believer that the two things you bring in-house are PR and creative," Mr. Ryan said. "You should always own those."

Olly is working with web developer Havoc, San Francisco and New York, as it builds out its web and mobile site for a June 1 rollout of direct e-commerce sales, and plans to ultimately bring on other marketing-services shops. It will become available at other stores after an initial year of retail exclusivity at Target. The products are mostly adult gummy vitamins aimed at light or non-users of the category who have been turned off by conventional offerings. While there are other adult gummies on the market, Olly aims to make them truly adult with more sophisticated flavors like blackberry. And simple product names, such as Effortless Digestion, focus mainly on promised benefits.

"Instead of selling melatonin, we sell sleep," Mr. Ryan said. "Instead of selling biotin, we sell beauty."

So far people -- particularly women -- appear to be buying it.

"The three most popular are Women's Multi, Beauty and Sleep," Mr. Ryan said. "We've got a lot of moms out there who need more sleep and want to look beautiful." The Sleep product, in particular, is selling at six times the pace expected.

Still, it may not be the best time to launch a new vitamin brand. A December 2013 study and editorial in the Annals of Internal Medicine found multivitamins and other nutritional supplements largely don't work, leading to a slowdown in sales last year for the $11.5 billion category, as measured by Nielsen and reported by Deutsche Bank.

Then in February, an investigation reported by the New York attorney general's office found four out of five herbal supplement products tested from major retailers didn't contain any of the herbs listed on their labels. While the overall vitamin business grew 2% for the 52 weeks ended April 21, per Nielsen, Mr. Jetta said the New York investigation appears to have hit online sales, which are declining.

The news is both headwind and opportunity for Olly, Mr. Ryan said. "Wherever there's consumer confusion, the role of the brand is to bring clarity."

Mr. Ryan sees meaningful questions about test methodology behind both the medical study and New York probe. "I want to wake up in the morning and think I'm doing right for the world," he said. "We spent a lot of time thinking through whether these are products people need. And for every bad study there is a great study that unfortunately doesn't get published."

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