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What’s Keeping Natural Product Executives Awake At Night?

Like most things today, the natural products industry suffers from an abundance of complexity. Consider the tasks involved to develop, produce, brand, distribute and retail superior products. Depending on your role, there are conditions, circumstances or constraints that drive the day to day activities designed to produce profits. That’s how it’s supposed to work.

 

Yet at every level of the natural products industry, we are impacted by issues that consume resources and threaten the existence of the industry as we’ve known it. Threats show up as operational, compliance, competitive or political. And don’t forget media that seems to love any opportunity to disparage an industry born of a simple idea, that food and nutrition are good things.

 

These essential components and their importance to the quality of our lives, rarely makes page one news. Consumers are confused. The context is decisive. Our context seems to embrace confusion. It includes:

  • The FDA censorship of health information. We can’t say food or supplements are medicine until we prove it.
  • There’s the possible repeal or modification of DSHEA. (At ExpoWest 2015. less than 10% of a room of thousands had ever heard of DSHEA)
  • New NDI guidelines that can potentially imperil operational abilities.
  • Disruption in the Big Food Sector
  • There’s the proliferation of non-profit watchdogs and certification agencies. (Where there’s smoke there’s fire?)
  • Cooperation to adequately address adulteration,
  • Supply chain transparency and truth in labeling.
  • Blaming the sports nutrition segment for the industry’s reputation issues. (We fail to recognize that the category is no different than any other performance driven category. There’s big money behind both the sports and big pharma sectors).
  • Can’t find qualified staff willing to work.

 

These are some of the concerns keeping industry stakeholders awake at night. Complexity is the norm. We chose this path as our best strategy to grow the natural product category. In the beginning, the idea that food was important for good health was enough. Changes in the food system and food supply have opened opportunities for nutritionally dense foods and supplements. This has resulted in even more complexity for the natural product industry and even more confusion for the consumer.

 

After 40 years of industry observation, we see well established, well run companies making the promise of optimal health available to all. A growing body of new research has yielded innovative new products. Industry statistics verify the growing importance that nutritional supplements play in consumers’ lives. We’re selling more but growing less.

 

Nutritional companies invest in clinical trials yet few of the study results ever show up in medical journals. Medical professionals our primary influencers, receive little nutritional education but frequent pharma messages.That’s because big pharma owns the ad spaces in most of those journals and they spend lavishly to engage doctors.

 

In 2015, medical journal ad pages were up 7.9% with ad spending increasing 8.4% to $372 million. Guess now we know why doctors continue to think there’s no science behind the nutrition claims their patients bring to their attention. The pharma industry is actively engaged in aggressive content marketing to doctors. Big pharma even takes advantage of the Brand Film Festival to celebrate the best, heartstrings pullng drug videos of the year.

 

These are the circumstances the natural product industry faces. We can’t outspend big pharma. We can’t compete with nutritional products by following a drug model. And we can’t possibly think consumers are ready, willing or able to buy under these circumstances.

 

We have succeeded in growing a complex category by making it even more complex. It is filled with competition, commoditized to the point where it’s available everywhere, and soon from Amazon’s first brick and mortar location. By 2019,digital transformation investments will triple, drawing funds away from store capital and profoundly changing the retail industry. Consumers are still more confused than ever. Yet they still want to buy. Amazing. Congratulations all around! How much more they spend is up to us.

 

Perhaps it’s time to explore the mechanisms that drive sales in the nutrition category. Customers who know more, buy more. And they buy more often. This has been true throughout the entire growth curve of the industry. Education is not a price conversation. Unfortunately that seems to be the primary message companies use as they struggle to find a way to cut through the clutter and get their message to consumers. Everybody seems to think that price is the most important element for a consumer sale.

 

It’s not. Everybody has a price. But not everybody has a good reason or a story behind that price. The natural products industry does, and it’s failing to tell that story to consumers eager to hear it. Find out how targeted content marketing strategies from Nutrition News can help.

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