Supplement Industry Innovation Dilemma: Condition-Specific vs. Multifunctional
Condition-specific versus multifunctional. This juxtaposition in product development approaches has been on mind for a while now. There are so many considerations at play here coming from both the brand-level and supply side of the supplement industry, but also with how it all interacts to consumer behavior.
So, what’s the future of product development within the supplement industry heading towards? Condition-specific or multifunctional formulation approaches?
Condition-Specific = a supplement that targets a health condition. There are dozens of health conditions that supplements might provide prevention benefits for, such as brain health, healthy aging, beauty from within, heart health, diabetes, menopause, and weight management.
Multifunctional = a supplement that mashes together two or more condition-specific intents that are usually complementary or have adjacency in the consumer’s mind. You could at times here industry jargon like “name a condition-specific” plus (i.e. gut health plus or immune health plus).
Definition wise, fairly easy to understand, but what I think we’re all much more interested in is the motivations between the various stakeholders in this situation, right?
Supplier-Brand Motivations
It’s important to recognize that condition-specific doesn’t mean ingredient-specific. Certain ingredients could have tremendous potential to support multiple health conditions. So, why do ingredient suppliers focus on bringing condition-specific innovations to market? It’s coming from a demand signal that starts way down at the consumer-level. Moreover, suppliers frequently hear from brands that are developing condition-specific products and are looking for specific ingredients with focused benefits.
The condition-specific B2B marketing approach has become a commonly used method to differentiate products, as it’s easy to do, can be very efficient, provides focus, and is easy to replicate if the supplier has multiple trademarked ingredients. On the flipside, while the condition-specific concept helps suppliers with what I mentioned and gives formulators a better understanding of how an ingredient can be used, anchoring bias could sabotage the ingredient’s expansion into one with multifunctional benefits.
Brand-Customer Motivations
But far and away…when we talk about condition-specific versus multifunctional, it’s more of a question of interactions between supplement brands and consumers. Condition-specific is not a new approach in the supplement industry, as you can find references to the trend from two or more decades ago. It has gotten more prominent in the last few years though because of the overwhelming product proliferation within the supplement industry. Since consumers are easily confused by the array of options available to them, condition-specific products can help these overwhelmed consumers feel empowered and enable them to take charge of their lives in a way that is convenient and understandable. That seems obvious enough, but let’s go a few layers deep on this debate….
For one, I previously mentioned convenience and that word can be defined in a variety of ways. Yes, saving time by making the discovery process of beneficial supplements quicker is convenient, but so is the ability to consume less supplements daily in the form of multifunctional products, right? We would be ignorant if we didn’t believe a subset of consumers appreciate convenient multifunctional products that can meet several wellness goals. But there’s also some other attributes at play in this condition-specific versus multifunctional debate.
Think about one of the most important purchase criteria…price. Now…this isn’t universally true, but the more health conditions a supplement is targeting, a decision usually needs to happen by the brand owner. The product is dosed efficaciously and it’s crazy expensive or the product is underdosed to meet an acceptable consumer price point. Again, this isn’t always a black and white situation. I can think of many things that can poke holes in my statement but generalizing this all…when consumers seek the best of the best supplement that’s also priced acceptably and targeting a health condition, it would come in the form of a condition-specific solution.
Moreover, that consumer behavior transitions into the desire for personalization. Again, a consumer might find a multifunctional product that’s dosed appropriately, at the right price, and targeting the exact health conditions they desire, but when we’re talking about make-to-stock products…meeting all these combinations consistently is unrealistic. Either something will be under-formulated, overpriced, over-engineered targeting undesirable health conditions, or the opposite of that. The multifunctional approach creates a situation where personalization overall goes way down.
Another important purchase criteria, when talking about ingestible CPG with delivery systems that have a flavor element, like powders, beverages, gummies, or foods, is the fact that blending way too many ingredients could present some challenges regarding taste, but also stability, or solubility. Taste is king…so just because you have a multifunctional product that’s dosed efficaciously and price right to the consumer…if it tastes like shit…you will rarely be successful in today’s supplement industry. Similarly, the more ingredients you include…the availability of using non-flavored delivery systems like capsules, tablets, or pills go down because it would create another consumer behavior red flag of increasing the quantity too high.
Finally, I want to talk about retail merchandising and commerce overall. When you create multifunctional products, it can cause some issues with legacy retail merchandising models. I always say…products are built to fit with sales channels. Sales channels do not mold to products. So, if you have a nutricosmetic product that is also focuses on weight management…where does that retail partner merchandise you at in the physical stores. I admit this can be less worrisome for the supplement category because most large retailers have a dedicated healthy living catch-all type section, but it shouldn’t diminish the concern all together. With ecommerce (and Amazon-specifically), there’s another natural consumer behavior to be conscious of when thinking about the condition-specific versus multifunctional decision.
This was among a collection of insights captured during a recent conversation I had with Richard Wang, the CEO of ingredient company NuLiv Science, at the 2022 SupplySide West tradeshow…
Final Thoughts
We know that ingredient advances are enabling formulators to create products that can address a broader cluster of health concerns. At the same time, supplement brands are finding opportunities in smarter, more targeted products that appeal to specific subsets of consumers. Is there a central “best” approach to attack the supplement market? No…but, if I was looking to start a supplement brand today…I would be more inclined to build condition-specific solutions that are a mile deep and an inch wide, while using a diversity of formats. While there’s no “hacking your way to success” in today’s ultra-competitive supplement industry, I believe that approach gives you a marginal advantage.