How COVID-19 shook the sports nutrition market. Is recovery in sight?

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Much has been written about the impact of the COVID-19 pandemic on the economy, specifically on the business sector. While it’s been widely acknowledged that the immunity product category is sprinting beyond the finish line, it’s also been presented that at the other end of the track, the sports category stalled, at best, and stumbled, at worst.

For example, TSI Group Ltd. (Missoula, MT) President Larry Kolb realistically shares that “Globally, we feel the COVID-19 pandemic [negatively] impacted the sports category the most out of all consumer health categories.” He estimates the global business contracted between 60% and 80%, depending on the geographic territory in question.

However, as sports nutrition/performance ingredient companies reflect on the pandemic-driven havoc that forced many of their category’s consumers out of gyms, taking with them their regular sports supplement regimens, it turns out that these same companies, including TSI, also have reasons for optimism.

“The category significantly impacted brands that were focused on gyms and specialty retail like GNC,” says Kolb. However, he advises, “We saw an increase in brands online as well as significant growth in brand diversity online.”

For Mariko Hill, product development executive, Gencor (Irvine, CA), “The pandemic impacted the sports category in a unique way, by changing the positioning of products in order to cater to the emerging demographic of work-from-home individuals.” With consumers becoming more conscious of their own health and well-being than ever before, Hill believes the sports nutrition industry has the ability to grow in different ways.

“During the initial phases of the pandemic, there was concern that without gyms, the active/sports nutrition market would falter, and product development would stop,” says Steve Fink, vice president, marketing, PLT Health Solutions (Morristown, NJ). “And things did slow down during Q2 of the year. Then, like we have in other phases of our lives, the industry adjusted.”

In fact, Elyse Lovett, vice president, marketing, Nutrition21 (Harrison, NY), points to forecasts from Nutrition Business Journal (NBJ), which in October 2020 projected that sports nutrition supplements could “experience a healthy boost in growth” when final 2020 numbers are tallied—up 8.7% in 2020 from 6.3% in 2019. Also, it noted that 36% of consumers reported increasing their protein powder intake during the pandemic’s early days.¹

Business as Usual in a Pandemic? Not!

Still, the pandemic interrupted the best laid plans for businesses to move forward, and some plans couldn’t be stopped—or, companies believed, shouldn’t be stopped. For example? New product introductions.

Although Nutrition21 actually launched its most recent sports nutrition ingredient, nooLVL, about six months prior to the pandemic, the traction of COVID-19 could have meant disaster for this patented non-stimulant nootropic ingredient that specifically targets consumers looking for an edge, especially gamers who require focus and energy. Instead, esports may have gained trajectory during the pandemic, and according to Lovett, nooLVL is a success story in this category. “Fortunately,” she says, “our customers have not slowed down or delayed any of their product development projects. In fact, several consumer products containing our ingredients launched during the pandemic, and the ingredient is already in more than a dozen products.”

It likely didn’t hurt that “nooLVL is supported by 30 safety and efficacy studies,” she adds. “The most recent clinical study we conducted evaluated its effectiveness in 60 healthy adult gamers who played video games for five or more hours per week for at least six months prior to screening.” The results showed nooLVL started working within 15 minutes, safely increasing energy (defined as perceived energy measured by the validated Profile of Mood States questionnaire) compared to placebo.²

In 2020, PLT Health Solutions introduced three major ingredients for the active/sports nutrition market: Zynamite PX (launched pre-pandemic), Dynagenix Joint+Muscle Formula, and RipFactor Muscle Accelerator. “Each of these ingredients were step-change solutions for the industry,” says Fink. He explains that Zynamite PX addresses mean and peak power in a low dose that clinical studies showed was effective in one hour. Dynagenix, meanwhile, targets the recovery segment and, he claims, is the first ingredient clinically demonstrated to improve both joint and muscle recovery, getting people back in the game faster. RipFactor is a botanical complex that has demonstrated substantial gains in endurance, strength, and muscle growth in a low-dose format.

PLT is especially excited about RipFactor and the science for the branded ingredient that includes two clinical studies. The first study, according to a press release, showed improvements in strength, endurance, and muscle size throughout the eight-week study period for young adult males familiar with weight training; the second study confirmed and expanded on the results of the first.³

Fink attributes the success of all three product launches in this way: “For PLT, the lesson we learned is that, regardless of economic or market conditions, there is always room for really innovative ingredient solutions that address pain points and that deliver demonstrable, significantly better results. Disruptive solutions thrive in disruptive times.”

He discloses that RipFactor in particular was featured in a number of new products in Q4 2020 and is slated for another dozen in early 2021. “We are looking at the potential for millions of units featuring this product [to be] sold in 2021,” he says.

Karen E. Todd, RD, CSCS, vice president of marketing for Kyowa Hakko (New York), says, “As a result of the pandemic, competitive athletic events like marathons were cancelled, and so the demand for high-performing nutrition products decreased; however, people did still work out to maintain their health—they just had to adjust the way they did it when the gyms closed.”

That didn’t stop Kyowa Hakko from launching last April its new ingredient Velox Patented Performance Blend, a clinically studied combination of Kyowa’s L-citrulline and L-arginine—a pairing that, according to the company’s press release, has been shown to increase nitric oxide production and boost nitric oxide levels more rapidly than L-arginine alone.^4,5,6

Nor did the impact of the pandemic affect Kyowa Hakko’s active promotion of its other ingredients that generally benefit from athletic competitions and open gyms. “Setria Patented Performance Blends as well as the made-in-the-USA Kyowa Quality amino acids with citrulline, arginine, and glutamine,” says Todd, “all are powerful workout ingredients.”

She continues, “While there was a bit of a slowdown midyear as consumers adjusted, it picked up, and in fact a few of our clients launched new finished products [with our ingredients] in the fourth quarter.”

Other companies, too, were quick to adapt plans so as to not let the pandemic get the better of their businesses.

For instance, FrieslandCampina Ingredients (Amersfoort, The Netherlands) launched a new protein gel concept in April 2020, which, according to Ramon Mommersteeg, marketing manager, performance nutrition, “is one of our application suggestions designed to demonstrate to our customers across the globe how dairy-derived ingredients can be used in innovative new formats to respond to the consumer trends currently dominating the sports nutrition market.”

He explains that “this particular concept uses the company’s Nutri Whey Isolate Clear ingredient to inspire brands to tap into the growing demand for easy-to-use, on-the-go sports nutrition products such as squeezable pouches and spoonable pots.” Such concepts no doubt appeal to harried at-homers looking for a quick and convenient delivery method.

What about an ingredient rebrand? Would that get lost during a pandemic?

NuLiv Science’s (Brea, CA) decision to rebrand its ActiGin ingredient was based, in part, as a way to avoid confusion and differentiate the ingredient from the company’s flagship ingredient, AstraGin. Both are part of the company’s sports nutrition portfolio but contain different ingredients and serve different purposes. AstraGin is a proprietary, blended botanical ingredient that helps with nutrient absorption and increases bioavailability of other nutrients such as proteins and amino acids. ActiGin, which has since been rebranded as Senactiv, is also a proprietary botanical ingredient, one that enhances physical performance through energy nourishment and optimized cell turnover specifically in exercised tissue. With four clinical studies supporting the ingredient’s benefits, Josh Beaty, NuLiv’s director of content, says the company is confident the rebranded name better reflects what the research demonstrates: the clearance of senescent cells attributed to intense exercise activity.^7,8

The company was set to launch the rebrand in February 2020, according to Beaty.

“But with the increasing concern and speculation of the pandemic spreading,” he says, “a campaign launch [in February] just didn’t seem like the right timing.”

By mid-summer, the company “decided that September would be a good time to pivot, with an uptick in brands inquiring about new ingredients,” states Beaty. “In addition, some gyms were opening regionally on an ad-hoc basis.” He also indicates that early fall was a good time since brands were likely considering new or reformulations going into 2021.

Beaty advises, “We wanted to advance the debut of Senactiv at a time when innovation and reimagining products was ripe for opportunity.” And, based on the response, it appears to have been a smart move. “Looking back,” he says, “we believe the timing was right, as we have brands thrilled about the rebrand and newcomers onboarding.”

TSI faced a potentially different problem. In November 2019, TSI’s Kolb says his company executed an agreement to acquire Metabolic Technologies LLC, and by January 2020 operations were integrated. So, there was no going back—only forward—even as the pandemic bubbled up.

According to a TSI press release announcing the acquisition, Metabolic Technologies is responsible for the discovery of beta-hydroxy beta-methylbutyrate (HMB), a popular ingredient discovered in the early 1990s for strength, recovery, and improved body composition benefits in highly trained and competitive athletes. Additionally, there is a compelling body of evidence showing HMB provides muscle health benefits to a much larger base of consumers beyond traditional sports nutrition shoppers. In its press release, TSI signaled its commitment to communicate these benefits through “its awareness and education growth strategy behind its branded HMB ingredient, myHMB.”⁹

Says Kolb, “Incorporating the Metabolic Technologies (MTI) employees into TSI was a very smooth transition and really business as usual. TSI and MTI have been working together for two decades in a close partnership, so the transition into TSI’s corporate structure was smooth.”

Where some might have been concerned the pandemic would have disrupted the transition, Kolb believes “the pandemic might have actually helped us, as the Missoula and Ames offices both adopted our new Zoom business culture due to the pandemic, and the Zoom meetings have worked well by enhancing communication. This helped facilitate the smooth integration.”

This past November, HMB got a boost of its own with publication of a year-long randomized, double-blind, placebo-controlled trial that found healthy older adults who supplemented their diets with HMB plus vitamin D3 experienced improved muscle function, even without exercise, according to a company press release. MTI Biotech physiology researcher Lisa Pitchford, PhD, stated, “Those taking HMB+D also reported feeling more active and energetic. While HMB+D does not replace exercise, it can help fill certain lifestyle gaps by helping to protect and even improve muscle health.”¹⁰ The study was funded by the National Institutes of Health, and the supplements were supplied by TSI.¹¹

Lessons Learned

With the pivots required, many ingredient suppliers discovered some silver linings—and some issues that still concern them. Perhaps, above all, they learned the lesson of adaptability, for their own companies and for supplement specialty retailers who had to quickly shift focus from brick-and-mortar to an expanded online presence.

Annie Eng, CEO, HP Ingredients (Brandenton, FL), also points to the adaptability of the category’s consumers. HP Ingredients manufactures LJ100 Eurycoma longifolia, shown to help promote desirable anabolic balance and boost testosterone for energy; ParActin Andrographis paniculata, which assists in recovery by managing inflammatory response; and Bergamonte Citrus bergamia Risso for supporting healthy weight management and performance by improving vasodilation. “All three have desirable applications for adults of all activity levels,” Eng says.

Eng says LJ100 sales remained robust and steady. “People who are devoted to fitness found other ways, such as in-home group participation like Peloton. Many bought weights and carved out spaces in their homes to work out; many others literally hit the road, jogging/walking.”

For Mark LeDoux, chairman and CEO, Natural Alternatives International Inc. (Carlsbad, CA), “The impact of the pandemic was significant when venues such as gyms and vitamin retailers that sold dietary supplements were forced to close their doors.”

LeDoux’s company supplies CarnoSyn, a patented ingredient popular in pre- and post-workout supplements. Without access to gyms and specific retail outlets, many consumers needed to find another avenue to purchase their workout products. Fortunately, LeDoux says, a considerable number of people transitioned to securing their products for home use via other means, such as through mass-market retailers or health food stores that were counted as essential businesses, or online.

LeDoux raises what he views as an industry-wide issue brought to light by the pandemic. He says, “When the pandemic hit the industry in the U.S., the real concern expressed by supply chain managers was how to deal with supply shortages of essential materials, including vitamins, amino acids, proteins, minerals, and other compounds. This also extended to basic items such as packaging containers and lids.”

As he explains it, “While many suppliers had ample safety stocks of inventories to deal with the Chinese New Year celebrations [in 2020], when many Chinese producers were shuttered due to the annual holiday, those supplies became largely oversubscribed by April and May of 2020.” This, he says, is an issue that should create a long-term strategic objective for industry leaders, namely boosting domestic production of raw materials and packaging components in North America. LeDoux adds, “This is also true of things as basic as surgical masks, latex gloves, and other personal protective equipment, and I fully expect to see companies repositioning their supply chains closer to home with repatriation of many of the basic chemical or manufacturing materials that had largely ended offshore over the past three decades.”

NuLiv’s Beaty addresses another issue unveiled by the pandemic. “Standard operating procedures (SOPs), particularly quality and safety protocols that might have been nested as more of a departmental responsibility, were suddenly a high priority organization-wide,” he says. “Both ingredient suppliers and consumer brands had to adapt on the fly, taking into consideration changing guidance from governing bodies.”

The pandemic also led to another quick swivel for marketing and communications efforts that needed to shift from the promotional and general product education messages towards, as Beaty puts it, “an organizational commitment to transparency and safety along the entire supply chain process to the customer experience.”

Innovation and Product Line Expansions

With the decrease in demand for some sports supplements, some companies took the opportunity, in many cases already underway pre-pandemic, to branch out their product lines with added functionality or different delivery methods.

Gencor’s Hill says, “Although the sports supplement market took a hit during the initial stages of COVID, the industry picked back up as consumers started to settle into their new routine of working out at home and/or outdoors. In order to cater to this new demographic, we started to offer more bespoke formulations in order to offer convenient and ‘fun’ formats for consumers to enjoy consuming supplements from.”

She points to active consumers leaving gyms behind to being homebound as leading to a change in perception as to how existing products can fit into their new routine. As an example, Hill mentions switching out pre-workout stimulants to ready-to-drink (RTD) beverages to enhance cognitive function.

With regard to the sports nutrition market undergoing a significant shift, FrieslandCampina Ingredients’ Floris Daamen, marketing manager, performance nutrition, explains that “previously, there was a clear line between performance nutrition and active nutrition, with protein powders being the go-to staple for serious athletes and a general lack of diversification beyond that. This has been changing over recent years, but the pandemic has sped up the process of blurring lines as ‘ordinary’ people are more proactive in managing their health.”

Daamen also points out that the pandemic has also expedited a change in the kinds of products consumers are seeking. Facing closed gyms and the need to exercise at home while juggling work and home schooling has led to less-structured mealtimes and demand for even more convenient nutrition products. “Now more than ever,” he says, “the everyday active consumer is seeking enhanced benefits from everyday food brands, as well as the traditional sports nutrition brands, in quick and convenient formats to help them embark on a healthier, active lifestyle.”

Of course, Daamen recognizes that convenience isn’t a brand-new trend. He says, “It’s just that the factors driving it are different than they were two years ago.” FrieslandCampina’s high-concentration protein gel concept, providing up to 15% protein content in a small, convenient portion formulated with Nutri Whey Isolate Clear, is one such example.

Customer Relationships Count, Especially During a Pandemic

The lessons learned during the pandemic weren’t surprising to sports ingredient suppliers. But they certainly reinforced—and heightened awareness for—the importance of some very basic business principles.

“Well, first you have to always be nimble,” says Kyowa Hakko’s Todd. “You have to be able to quickly change direction and have multiple ingredients or products that can be positioned in a different marketplace or in a different way. Good communication is important in being able to move quickly, both internally and with clients.” It was vital, she says, that her company understood its clients’ situations in order to support those needs.

At a time when business was especially fragile, customer relationships truly counted.

Nutrition21’s Lovett says, “Brand marketers that have good, longstanding partnerships with their suppliers have fared better through this cycle than brands that have not made the effort to build those relationships.”

She adds that “throughout this pandemic, we made sure we stayed close to our customers to meet their needs and help them pivot where necessary. We also helped them explore unique categories like esports as a way to take advantage of the increased screen time and surge in video game playing.”

Todd, too, focused on Kyowa Hakko’s customer relationships in innovative ways. “We worked closely with our customers to provide finished products to health and fitness trainers who were conducting virtual training sessions with their clients,” she says. “We also were able to focus on the other benefits of some of those nutritional ingredients—for example, the additional immune health benefits of glutamine, or the heart health aspect of citrulline and arginine.”

Other companies, too, recognize the need to adapt, to pivot, and to move quickly as a means to support their customers.

FrieslandCampina’s Daamen notes that performance nutrition has always been a rapidly evolving market, and the closure of gyms meant big changes—practically overnight—to the ways people usually exercise.

“As more people began exercising at home—including those who weren’t regular exercisers before but who wanted to improve their health because of the pandemic—our priority continued to be to help our customers create innovative solutions that responded to these changes,” says Daamen. “During the pandemic, we also feel that we can support our customers by working with them to facilitate formats that combine ingredients like dairy proteins with other on-trend ingredients, like probiotics, to target broader health issues which are also increasingly a concern for consumers.”

With tradeshows and other in-person conferences either cancelled or conducted virtually, the lack of human touch created a void in relationships. It also created the need to shift some branding strategies. For example, Gencor’s marketing strategy, notes Hill, evolved to being more present online, “where we started presenting the benefits of all our brands through content generation and advertorials.”

“Yes, many lessons were learned from the pandemic, especially how it can impact a consumer market category like sports nutrition and the retail outlets sports products are sold through,” advises TSI’s Kolb. “Consumer market and retail marketing decisions have a huge impact on winners and losers in a pandemic. Brand positioning and diversity are very important lessons learned.”

All Eyes on the Future

As the country, one hopes, rounds the corner leading back to “normalcy” in 2021, companies in the sports category are especially eager to put the pandemic behind them, to focus on lessons learned, and view the future with optimism.

“In 2021, we can already see how gyms are opening up,” says Kyowa Hakko’s Todd, “and I do think it will rebound as new innovative products will continue to be launched.” She believes that distribution was, and will continue to be, important with this business. “As always,” Todd adds, “with this category, taste, convenience, and the ability to deliver a product that assists people with their performance goals will lead to the rebound in sports nutrition.”

Nutrition21’s Lovett says, “As consumers’ lives start to ‘normalize,’ slowly but surely we believe this will bring customers back to retail and help them ease back into their fitness routines. We also believe esports will be one of the success stories born out of the pandemic.”

Kolb, of TSI, also sees the category coming back overall. He notes, “GNC is very active now that they have emerged from Chapter 11 healthy and well-positioned, and our ingredients and brand partners who are aligned with GNC are performing well. That’s a really good sign for 2021.” And he remains positive about innovation, about which he says, “I don’t think innovation ever left; it was just delayed and disrupted by gym closures and limited retail access.”

Natural Alternatives International’s LeDoux also expresses hope, but it comes with a reality-check for companies to recognize the value in maintaining safety stocks of essential materials for their customers. He advises, “It is very tough to sell finished goods from an empty warehouse, and executives in charge of supply chains and financial needs of industry will be changing their attitudes from a ‘just-in-time’ model to something requiring more investment of resources in physical inventory.”

On the bright side, LeDoux wants the industry to “take heart.” He expects to see continued advances in the industry as science continues to publish benefits and observations from interventional studies. “This pandemic will surely pass, but the benefits will be demonstrated in years to come by more informed consumers who have learned that nutritional supplementation is a critical component of their daily lives,” he states.

Fink, of PLT Health, says, “In general, we are very optimistic about the active/sports category and believe it will continue [with] strong growth. It just might grow differently than it has in the past, with products requiring differentiated features and benefits, better and more believable clinical science, and experiential—or fast-acting—results.”

“Looking ahead, I see a bright future for sports nutrition, even if it does take a while to get over the remaining hurdles of the pandemic,” says Daamen of FrieslandCampina. “Innovation and a keen understanding of what consumers want will help to maintain growth in the sector. For many, the pandemic has been the catalyst for wanting to take their health to the next level, and consumers will continue to educate themselves about health and wellness long after the pandemic ends.”

According to Gencor’s Hill, “Sleep, mood, and immunity will be the categories that will see huge focus,” particularly, she says, as anxious consumers start to take a holistic approach to wellness and seek to minimize the risk of stress and illness.

Hill predicts that overall, “I believe we will see tremendous innovation in [the sports] category in months to come as brands will start to merge the needs of active consumers” looking for solutions for performance and recovery with strategies to help prevent conditions such as stress, poor immunity, and pain.

PLT’s Fink similarly says, “One unexpected factor we encountered in 2020—and it may or may not be pandemic related—is the rise in the inclusion of cognitive-support ingredients in active/sports nutrition formulations. Our Zembrin Sceletium tortuosum ingredient saw a dramatic increase in sales—particularly in active/sports products. This might suggest that people are using exercise as a way of maintaining balance and a good outlook on life.”

LeDoux also sees an opportunity to expand his company’s versatile ingredient, CarnoSyn, beyond sports nutrition. “We continue to see companies evaluating the inclusion of CarnoSyn in their arsenal of supplements designed to help bolster the human immune system and healthy stress response,” says LeDoux. CarnoSyn is a component of the dipeptide carnosine, and LeDoux says there is “…evidence that the ingestion of CarnoSyn can help increase muscle and tissue levels of carnosine…”.^12,13 He also notes that carnosine has been effectively studied in a variety of clinical undertakings, including those showing possible protective effects on respiratory lung function.¹⁴

Of sports nutrition, HP Ingredients’ Eng says, “The category will remain strong and growing. There are many boutique entrepreneurs who are engaging influencers to create a hybrid of fitness and wellness. Sports ingredients continue to evolve...”

She enthuses, “The beauty is that the pandemic taught people to really monitor their health and that they can be stronger, they can be resilient, they can get into shape physically, mentally, and emotionally to better withstand significant stressors that occur in life. This refreshed mentality is a goldmine for our industry. We believe that sports nutrition will morph from an isolated category to a popular part of overall wellness—being active, being metabolically robust, which will improve immune function. It’s a great time for innovation.”

Beaty with NuLiv sums it up this way: “The pandemic forced everyone, organizations included, to reevaluate their priorities personally and professionally. Change is always difficult, regardless of the circumstance. Ideally, a decade from now our industry can look back with amazement at how we all adapted to the shift and grew from this significant disruption.”

References

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13. Hoffman JR et al. “Effect of high-dose, short-duration β-alanine supplementation on circulating IL-10 concentrations during intense military training.” Journal of Strength and Conditioning Research, vol. 32, no. 10 (October 2018): 2978-2981
14. Tanaka KI et al. “Preventive effects of carnosine on lipopolysaccharide-induced lung injury.” Scientific Reports. Published online February 16, 2017.