Vitamin and supplement marketer NBTY has named Droga5 agency of record across brands including Nature's Bounty, Osteo Bi-Flex, Sundown Naturals, Pure Protein and Met-Rx. It's a sign the leading manufacturer in the $11 billion-plus industry wants to advertise more to raise its profile with consumers.
"In general, NBTY is looking to build deeper more engaging relationships with consumers, so we want to give our brands more meanings," said Andre Branch, the company's chief marketing officer for the Americas, who came to NBTY from L'Oreal in April. "We have used a number agencies in the past, but we're looking to build stronger relationships with key strategic partners, so we're streamlining our agency relationships and looking to really leverage their expertise." Havas Media will continue to handle media planning and buying, Mr. Branch said.
Mr. Branch described Droga5 as "having a great track record of success" and "respected and admired in the creative world." The shop also has "a very similar approach to brand strategy as we at NBTY have," Mr. Branch added.
The challenge, he said, is that "brand loyalty has been low in this category due to clutter and a lot of trade spend that has happened. We're looking to really change that. We think there's a huge opportunity for us to continue to differentiate ourselves with better marketing."
Echoing the critique of Eric Ryan, the Method Products co-founder who also co-founded the Olly brand of vitamins launched earlier this year at Target, Mr. Branch said: "There is a lot of confusion in the category. People aren't sure what's out there, with a lot of ingredients and a mess at shelf. We're looking to clean that up and really set ourselves apart."
NBTY, which is a portfolio company of publicly-traded private-equity firm Carlyle Group, had reported sales of $2.4 billion for its Consumer Products Group last year. It had $1.3 billion in U.S. retail sales excluding Costco, online and specialty stores, according to Tabs Group, which tracks the industry.
But despite $74 million in measured-media spending on NBTY brands last year, per Kantar Media, and $203 million in reported global advertising spending, the company remains a relatively low-profile player with consumers, like others in the industry. Much of its marketing is focused on trade promotion, including frequent buy-one-get-one-free deals, said Kurt Jetta, CEO of Tabs Group.
That promotion actually has been working of late, both for the category and for NBTY, Mr. Jetta said. After a slowdown last year, linked in part to critical medical studies but also to some retailers pulling back on promotion, the vitamins and supplements category rebounded to 3% growth in the past year. NBTY has led the way with 5% growth, with positive momentum in recent months, he said.
"Because you are starting with brands with such low awareness," even relatively low increases in media spending can have a big impact, Mr. Jetta said. "Most consumers would struggle to name four or five brands of vitamins across all the various segments, because it's just not one of those categories that's heavily advertised."
Household penetration is also relatively low, with only around 30% of households buying vitamins or supplements three or more times per year, he said, so the potential to grow the category and individual brands through promotion or advertising is high.
High margins and the potential for increased household penetration have also attracted growing interest from packaged-goods players such as RB (Reckitt Benckiser), Procter & Gamble Co., and Church & Dwight Co. to supplements in recent years, increasing pressure on incumbent players like NBTY.
CORRECTION: An earlier version of the story said NBTY is publicly traded. It is not, though it reports earnings separately from parent Carlyle Croup.