[By Ann Cooney, Specialized Livestock Marketing Research Group, Dept. of Ag. Economics, University of Saskatchewan, Saskatoon Canada. Reprinted from her report - "A Review of Scientific Literature on the Health Benefits of Velvet Antler"]
Velvet antler has been entering the North American market very slowly through pharmacies and health food stores. Discussions were held with health food stores and pharmacies in Saskatoon (Canada) to understand the marketing strategies for these products.
Velvet antler is considered to be a nutraceutical. It is available on the market mainly in encapsulated form, although skin care cream made from it is also available. The current regulatory framework for nutraceuticals in Canada (and the USA) precludes antler products from having health claims on their labels.
Here is what we discovered in our discussions with velvet antler retailers.
People aged fifty and above tend to purchase antler products mainly as a natural remedy for arthritis. Customers access information about these products from Internet advertisements, magazine articles (Alive magazine), radio commercials, pamphlets available in health food stores and pharmacies, and from cultural medicine.
However, velvet antler products are not as well-known as other traditional remedies such as ginseng and echinacea. Most pharmacies are not familiar with this product.
Velvet antler products may increase in popularity if they can access large chain store pharmacies. Most pharmacies and health food stores set their own standards for the products they stock. Some of the standards used by stores are discussed below.
Most of the retailers identified the reputation of the processor as one of the most important factors determining purchasing decisions for nutraceuticals. Processors must be reputable.
One health food store owner suggested that independent deer antler producers should get their product marketed through renowned antler manufacturing companies to improve market penetration. This would also help ensure consistent product quality and safety. Product safety concerns include animal health (chronic wasting disease), bacterial contamination (E. coli, Samonella spp.), chemical contamination, and physical contamination such as dander.
Many retailers require some level of good manufacturing practices (GMPs) in the processing plants to ensure product safety and quality. A Hazard Analysis Critical Control Point (HACCP) system implemented in processing plants is preferred. In some cases, stores send representatives to inspect the processors to verify sanitary processing conditions.
Several retailers expressed a preference for Canadian products or Canadian companies, but will sell imported nutraceuticals from reputable sources. One company verifies the original manufacturers of these imported products. Other issues include the ability to provide appropriate, professional labeling and informational brochures.
Another significant factor that retailers consider when choosing nutraceuticals is product quality. However, the definition of quality differs from retailer to retailer, ranging from raw ingredients to the finished products. Several stores verify sources of raw materials to ensure quality. One retailer requires Canadian raw materials from natural sources.
Another store requires the manufacturer to provide a full ingredient list. If any ingredients are unknown, the store conducts further verification on the product. Another retailer selects products containing the least amount of food additives such as artificial colours and artificial sweeteners. The purity of the finished product is also assessed, as several stores require independent laboratory analysis of nutraceutical products before the products are purchased.
Most stores named the health benefits of nutraceuticals as an important consideration in making purchasing decisions. Several stores require the manufacturer to provide information about a product's benefits, including independent scientific or sponsored studies, journal articles, or magazine articles, before stocking a product. One retailer listed proven scientific benefits as the most important factor in determining purchasing decisions.
Although the health benefits of the products are the most important factor to one retailer, customer demand was identified as the most important consideration by another store. The store was confident buying products that are well known to consumers such as vitamin C, and glucosamine. However, this store was very reluctant about buying a new product such as velvet antler because it perceived a lack of customer demand. This particular retailer suggested that antler product manufacturers should promote the health benefits of their products through the media to raise consumer awareness.
Price was also mentioned by several retailers as a factor to consider when stocking a product. At least one store stated that quality outweighed price. Another store identified package size and labeling as important considerations.
Current marketing approaches
Most stores visited for this study stated that manufacturers approached either their stores directly or their head offices to sell their products. Methods of product procurement include independent store retailers purchasing directly from manufacturers, centralized buying by a purchasing office for a chain, and independent and chain stores ordering products from a wholesaler.
Most wholesalers or manufacturers provide product information in the form of brochures, pamphlets, independent scientific studies, and monographs either to the head office or directly to the stores. Pharmacists receive this information and have access to supplemental information from the Internet, Drug Information Line, academic institutions, the MEDLINE database, and doctors. Some stores have compiled their own manuals that include product characteristics, or they may request further scientific literature from the manufacturer. Manufacturers periodically offer "crash courses" on the benefits of their products to stores.
Once in stock, several stores have a trial period for nutraceuticals. One store keeps a product on the shelf for a three-month trial period, after which point the price is reduced. If the product remains unsold, the store returns the product for credit or exchanges the product for another from the same manufacturer.
Some stores have a "guaranteed sold" clause in their agreements with the manufacturer that credits the store for product that has not been sold before its expiry date or that has not sold with a defined period such as three to six months. After that period, the store returns them to the manufacturer with approximately a 5% restocking charge or a full refund.
Most stores surveyed keep the product on the shelf until the best before date or expiry date. One wholesaler credits any pharmacy clients that return expired nutraceuticals, and then return the product to the manufacturer for credit. Another independent retailer does not return the product for credit, but reduces the price.
Several stores inform customers of the correct dosage of every product, and review customers' diet, lifestyle, medication, and medical condition to ensure correct usage of the product.
The comments from retailers show there are a variety of policies for evaluating product quality, stocking products, procurement and product information. This suggests that there is a need for a coordinated industry strategy or to set standards as to what constitutes good velvet antler products. For example, standards could entail processors working with producers who are part of an on-farm quality assurance program that has protocols for traceability, animal husbandry and velvet antler harvesting.
The processors themselves would likely have implemented a food safety program such as Hazard Analysis Critical Control Point (HACCP) and a quality assurance program. This would help provide markets (retailers and consumers) with long-term confidence in products, especially in light of the situation with CWD.
A consistent set of product standards would also alleviate confusion for marketers, processors and wholesalers. Currently, different retailers have different product requirements. Therefore, devising a product development and marketing strategy based on a retailer who has low requirements would preclude doing business with others who have a much higher standard. Low standards may create a poor image of the industry, which in turn would result in poor consumer acceptance. There are clear advantages to a coordinated industry strategy in responding to retailers' information and product quality needs.
Need for research
The importance of market research and having credible scientific information cannot be overemphasized. An industry strategy to continue searching for other existing reference materials and investing and encouraging scientific research on health benefits is important for continued growth and to secure retail/consumer confidence. Communicating the benefits of the product to retailers and consumers in a user-friendly fashion needs to be done in a targeted and professional fashion.
Product literature must include information about side effects due to medical conditions. Although anecdotes and testimonials may encourage consumer experimentation with a new product, they do not provide retail outlets, such as pharmacies, with the scientific information required to promote the product with confidence. The risk is that velvet antler may be perceived as a fad product, lacking in scientific credibility with potentially detrimental side-effects.
Most importantly, the industry must recognize that in order to be successful in the nutraceutical business, velvet antler has to compete with a large variety of other health products. Velvet antler marketers have to work closely with retailers to share information, to get feedback from them on customer reactions to the product, on promotional strategies, and producing literature that addresses consumer questions and concerns. This on-going process of information exchange is a management tool that will help sustain and grow the markets.
Competing in the nutraceutical industry also demands high quality standards for products, scientific information, labeling and promotional tools. Industry co-ordination in these matters is essential to ensure that consistent and accurate product and industry information is disseminated.
Success in the nutraceutical industry also demands that producers understand the alliances they are undertaking with marketers so that they are supporting marketing efforts that will help create the desired product image in a manner that produces sustainable markets.