Industry opinions: Has added VAT affected the nutrition goods market?

BikeBiz talks to distribution and brand representatives about the product, price and demand for sports nutrition
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The nutrition market has seen plenty of movement in the past few years, with an ever-growing number of brands, a 20 per cent price hike, perhaps overshadowed by the ‘Pasty Tax’ and the all-important issue of taste still driving many buyers. Mark Sutton speaks to some market experts about the future…

Matt Hart, Torq Fitness

On VAT: I think it’s too early to say at the moment how the addition of VAT to products has affected the market. Although the changes hit in October, this was just before the winter and performance nutrition sales tend to slow down during this time, because only the hard core are riding. Nutrition sales tend to pick up after Christmas with the biggest sales kicking in after Easter.
From a point of principle, we have been extremely disappointed with the Government’s decision to add VAT to energy and recovery drinks. Taxing a healthy lifestyle is something that we are fundamentally opposed to and we have been surprised at the lack of awareness among the public about the levy.

On what sells: We’ve noticed that this is very much weather dependent and as last summer was so wet and cold, our gel sales went through the roof with only moderate increases in energy drink sales. This is because bike riders still need the fuel for the events and training they’re doing, but don’t need to hydrate as much. If we have a hot summer this year, we’d expect energy drink sales to be higher in comparison to gels. Bars and recovery drinks tend to be good consistent performers.

On packaging: I think the danger is that someone picks up a gel and they know it’s supposed to give them energy and it says ‘take two per hour’, but there’s nothing to explain that if they’re drinking a fair bit of energy drink, they don’t need to consume so many gels.
It’s hard to get the amount of information you want to onto a label, especially on gel packs! All of Torq’s new labelling has a QR code now, which links to our ‘TORQ fuelling system’ at www.torqfitness.co.uk/tor-fuelling-system, which explains clearly how to use our products in combination with each other.
On education: I do think that the education is still generally very poor, which is what we’re always trying to address at Torq. There was a documentary from BBC’s Panorama last year called ‘The Truth About Sports Nutrition’, which highlighted that many people are being miss-sold energy drinks, which we commented on our website at TORQ as being in full agreement with.

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Andie Walker, Walkers Cycles

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On education: The recovery side seems to be in its infancy in the cycle trade, while energy products are quite established in the industry. Most energy users are well aware why they are now regularly using it, and what benefits it has for them, but recovery is another story – consumers and even most dealers don’t realise it’s as, if not more, important to feed the fatigued muscles after exertion.

On Product: We are stocking all the energy products and gels, with a great range of tasty flavours, and then we are ranging a good depth of protein recovery powders, and ready-made drinks, as well as mega tasty protein bars with minimal carbs and kcals in too.
We picked up the USN brand as it’s been an extremely well established name in two sporting sectors I take part in – the gym and rugby worlds. It’s one of a few that taste lovely and for instance in the post recovery side, the quality is extremely high with very little ‘rubbish’ added to make them palatable. I had used USN well before we picked up the exclusive distribution.

On VAT: For the H5 brand, which we have distributed for circa 15 years, I personally have not come across individual concerns over the VAT rise brought into place last year. As for USN, the VAT application on nutrition was rolled out on before we took on the exclusive distribution for the cycle industry.

Martin Ingham, The Cycle Division

On VAT: My belief is that, post VAT hike, consumers may have traded across to flapjacks and similar promoted products in the supermarkets – bar sales in the vast majority of multiples are totally dominated by consumers seeking promotions.
On what sells: My sources tell me that bars are more popular than the gels and powders.

On packaging: Packaging is certainly an important part of the buying process. Our sales rose three fold after we had rebranded our packaging to reflect the nutritional components further.

On product: The feedback I have (and my own preference) is that cyclists are looking for taste, almost as much as they are looking at the nutritional content.

Ashley Brown, Marketing Manager for CNP at Paligap 

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On VAT: The rise definitely has had some impact. We saw some customers ‘stock up’ in advance of the increase before a quiet period post increase.

On what sells:
Gels are always a popular product, although cyclists and endurance athletes are becoming increasingly aware of protein products for improved recovery and reducing body fat. Our new flavour CNP bars have seen a spike in bar sales.

On packaging:
With EFSA regulations kicking in last year, packaging and instructions are extremely important. We have very transparent ingredient lists, unlike some which state ‘proprietary blends’ and hide filler ingredients. We have also rebranded our product to reflect the quality, and the inclusion of Sky and BC logos show our products are developed with and used by the best teams and athletes.

On product:
Definitely cyclists are taking the market more seriously. Cyclists increasingly understand the importance of high quality ingredients in their purest forms. The public has seen the likes of Wiggins transform his body shape by effective use of high quality protein and now have access to the same formulations.

Simon Klima, Marketing Manager at Science in Sport (SiS).

ON VAT:
Any adverse effect has not been as profound as some predicted. What little there has been, has been felt most at the entry price point of the SiS range. New advocates tend to be slightly more price sensitive when first engaging with the brand.

On product:
We have enjoyed growth across all product types. We have been particularly pleased with how SiS GO Isotonic gels continue to grow; it’s a product we first developed back in 2002 and it changed the market. Another highlight has been SiS GO Hydro, since launching this product last year we have seen strong growth across all sales channels.

On packaging: We really believe in the importance of responsible and informative packaging in the nutrition industry. We take this very seriously and that is why we made a significant investment in redesigning all of our packaging a little over a year ago.

On the market:
Cyclists are taking nutrition very seriously. They want to understand more and more so that they can make informed decisions. Some of our newer products, like SiS GO + Nitrates and SiS REGO + Fruitflow are market firsts, and our consumers are really keen to learn more and more. SiS aims to educate its consumers as extensively as possible, after all, it is only through better understanding that cyclists can truly benefit from good endurance nutrition.

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