Unlike most of the large, traditional OTC players, small, independent OTC companies have recently recorded double-digit sales growth. These companies often outpace market growth by offering unique brands, uncommon and often natural ingredients, focused distribution, and a strong online presence, frequently combined with compelling digital marketing that resonates with today’s OTC consumers. Identifying these market disruptors and learning the factors that make them resonate with consumers and retailers is crucial.
One such example is Olly vitamins and nutritional supplement maker. Olly sells consumers on the benefits of the supplements rather than the ingredients they contain. This is a simple yet significant departure from the way traditional vitamin brands have been marketed for years. The line contains adults’ and children’s multivitamins, sleep aids, probiotics, protein smoothies, and supplements that help with stress, energy, skin, beauty, and brain health. The company operates rather differently than most other consumer products or supplements companies. First, Olly treats retailers as clients and “thought partners” and pitches product concepts to them as such. Second, Olly prefers to execute its plan in “bite-sized chunks,” such as rolling out a line with only one retailer and a limited number of SKUs, which allows for efficient scaling without being overwhelmed by the logistics of manufacturing and fulfilling orders of a large product line. And third, company founder Eric Ryan doesn’t see Olly as a business but as a cause where employees “live the brand” and buy into the philosophy of work/life balance, natural products, and transparency. Olly uses unconventional tools with its employees, including “recess,” which allows the team to participate in yoga, kickball, or musical chair during work days. Ryan’s team is also known for holding meetings while walking through the Presidio National Park, where the company is headquartered near the Golden Gate Bridge in San Francisco, California.
Another rapidly growing company is Irwin Naturals, based in Los Angeles, California. Founded in 1994, Irwin Naturals is a producer of soft gel-based herbal formulas sold in more than 90,000 retail outlets and online. The company markets a series of targeted herbal formulas in different lines for men, women, weight management, performance, and joint, heart, brain, and mood and energy support. In addition, the company also markets the RED line brand of targeted brands that provides nitric oxide to the body. The RED line contains L-citrulline, an amino acid that readily converts to L-arginine in the body, which can then be converted into nitric oxide. Nitric oxide occurs naturally in the body and plays a key role in cardiovascular health by helping blood vessels relax and dilate, allowing more blood to flow throughout the body.
Since 2015, Irwin Naturals has pursued aggressive new product launches which have driven sales gains into the triple digits, albeit from a small base. In 2018, the company appointed a new CEO, Marc Washington, who is known for his successful track record of transforming and scaling wellness businesses. He had previously served as president and COO of Beachbody, a $1 billion nutrition and fitness company. Prior to that, he acted as the CFO of The Wonderful Company (formerly Roll Global), a $3.5 billion consumer products business focused on health and wellness.
Irwin Naturals’ brands are sold largely in alternate retail channels such as natural and specialty stores, independent health food stores, and vitamin and supplement stores. Some retailers that sell Irwin Naturals brands include Super Supplements, GNC, Smoothie King, Sprouts Farmers Market, Whole Foods, Lucky Vitamins, Natural Grocers, Earth Fare, Swanson Health Products, The Vitamin Shoppe, and iHerb.com. While natural and specialty stores are the foundation for the company, it plans to expand to mass merchandisers and drug stores as a part of its omni-channel strategy. For instance, Irwin Naturals was a part of CVS Pharmacy’s 2017 initiative to expand offerings throughout the health and vitamins area. The brand is a part of CVS’ “discovery zones” that facilitate easy navigation through educational displays and product assortments for emerging areas like connected health, sleep and mood, and immunity.
For detailed information about Olly, Irwin Naturals, and 68 other independent OTC players, view our brochure, OTC Indies: U.S. Analysis of Independent OTC Companies. This study includes extensive primary research with large and small OTC marketers and retailers, and will be published in Q2 2019. To learn more, contact us.