8 Differences International Nutrition Companies Need to Know
The United States represents the largest market for nutritional products in the world, accounting for nearly 40% of global nutritional product sales. Gaining marketing and distribution in the United States is a huge accomplishment for any nutrition product company but it requires understanding of this unique market. Here are 8 important factors of the US Market that every international company needs to know when approaching distribution in the USA.
- Size: Geographically, the United States is massive and the demographics and trends are unique among regions. For a point of reference, the single state of Texas represents the same share of the market as all of Scandinavia combined.
- Difference in States: What works in one state may not work in another, and retail distribution is subject to state regulation. Each state may be thought of as its own individual market, and major retail store chains and distribution companies will differ between states. Product preferences will vary based on states as well, for example, California consumers are statistically much more preferential to organic and natural products.
- National Distribution: There are many stores and distribution companies, though, that do maintain representation in all 50 states. Gaining nationwide distribution can be very profitable, however it also requires nationwide advertising to reach audiences in all areas.
- Distribution in Big Retail: Large multi-purpose retail chains, such as Walmart, make up the bulk of the purchases for nutrition products in the United States. These stores exist nationwide, in both cities and rural areas and are a part of everyday American life. Americans are much more likely than any other nationality to do all of their grocery shopping in one weekly trip, rather than broken up over several small trips. Being able to stop at one large store to fulfill all of their shopping needs fits in with the American ideal of convenience. However, because of their immense power in the retail market, it is nearly impossible to gain distribution without a significant advertising budget to accompany the product’s release.
- Convenience Stores: Convenience stores are a miniature market that often accompany gas stations, or may be standalone stores. In some areas of the United States, consumers rely on convenience stores to get the bulk of their groceries. Most are stocked by large distributors but many carry products from smaller companies that would not be distributed to larger retail giants.
- Standalone Stores: While shopping malls may be synonymous with American retail culture, the majority of sales actually occurs in standalone stores and strip malls. While this includes the aforementioned large retail chains and convenience stores, this also includes smaller, independent stores, as well as smaller chains including nutrition-based chains and gyms. Gaining marketing and distribution in independently owned shops is much more feasible without a multi-million dollar advertising campaign and a great entry point into the market.
- FDA Regulation: A huge aspect of marketing and distribution in the United States market is compliance with the Food and Drug Administration. This is the government body that regulates food and medication, including ingredients and health claims on labels. The FDA heavily regulates what may or may not be accompanying a nutritional product in terms of health benefit claims. In some ways, the FDA regulations are less stringent than some European regulations, however the FDA regulations must be followed precisely and require very specific language in labeling and marketing of nutraceuticals to ensure compliance.
- E-Commerce: E-commerce is gaining huge ground in American markets which should be taken into consideration, however, e-commerce in the United States is much less common than Europe and some other parts of the world. Americans appreciate the convenience and instant gratification of being able to purchase something in a nearby store and receive it the same day, and do not mind driving some distance to find it. It is expected though for e-commerce sales to increase and soon be on par with the rest of the world, particularly as e-commerce becomes more and more convenient.