I look forward to seeing how this all pans out.
Having strong sports nutrition industry contacts here in Sydney, I partly agree with the reasons for the drop in turnover. Much of which has always been an issue.
Putting big targets on retailers to spend dollars for certain discount led to fall outs with big retailers and eventually these retailers looked elsewhere for supply and began importing their own supplements.
Retailers were not able to profit off the discounts offered from suppliers like Nutrition Systems. This in turn saw dozens if not over 100 specialty stores closing over 2018 and 2019. Maybe more.
Large retailers began acquiring the struggling stores. Some doing so with success and others tried to consolidate the market but failed. As the larger retailers went from 20 stores to 70 stores or 20 stores to 45 stores, the spend with Nutrition Systems got smaller. There are stores closing down that were almost exclusive Nutrition Systems and being bought over and the growing retailers are spending less. Shelf space in 2014 was maybe 50% and in large retailers it's now well under 10%.
A huge part of Nutrition Systems ongoing success will be their ability to improve or forge better connections with big retailers.
The retail side of sports nutrition has been on the decline much the same as Nutrition Systems figures would suggest.
Competition coming from companies like Bulk Nutrients, Black Belt Protein, iHerb, Viper and many more. Most of these companies sell the exact same supplements for less than half the price and don't kid yourself the American imports are better. An ever growing savvy and switched on buyer, being led to the cheaper option.
Nutrition Systems needs to develop a way to get their supplements to market at a much lower price for the retailers with big outgoings to pay to survive. And to maintain a high margin for retailers or the decline with persist.
With the new laws coming into play it will likely play in Nutrition Systems favour but only if they can capitalise on it and offer saleable stock that the consumer wants.
And there is Amazon who are opening distribution hubs over Australia who will enter the sports nutrition area much more aggressively in 2020.
The next 6-12 months could get very interesting.
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