sports nutrition opportunities

Sports Nutrition Branding & Marketing Opportunities

A roadmap for the future

PREPARED BY KALEIDOSCOPE

HTTP://KASCOPE.COM

�SPORTS NUTRITION BRANDING AND MARKETING OPPORTUNITIES / PREPARED BY KALEIDOSCOPE / HTTP://KASCOPE.COM

INTRODUCTION

About Kaleidoscope

Kaleidoscope is a full-service product design and development consultancy with offices in Cincinnati, New York, and Deroit. We help our clients identify new markets, create new products, and make existing products better.

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�05 West Fourth Street, Suite 900 Cincinnati, Ohio 45�0� 800-930-5793

3SPORTS NUTRITION BRANDING AND MARKETING OPPORTUNITIES / PREPARED BY KALEIDOSCOPE / HTTP://KASCOPE.COM

Foreward:This document works best when presented in person. While we’ve done our best to make it stand on its own, there is no substitute for personal interaction. Please don’t hesitate to contact us with any questions or comments.

INTRODUCTION


Part 1 /Introduction: Objectives, methods, and information about this report.

INTRODUCTION


Sports nutrition is at a crossroads, whether everybody involved knows it or not. Producers and consumers have unprecedented access to technologies and ingredients, awareness is higher than ever, and sports nutrition products are available to mainstream consumers like never before. Yet sports nutrition also faces downward price pressure from new competition, and struggles with consumer confusion, skepticism and mistrust.

INTRODUCTION

�SPORTS NUTRITION BRANDING AND MARKETING OPPORTUNITIES / PREPARED BY KALEIDOSCOPE / HTTP://KASCOPE.COM

Sports nutrition must choose: Learn to build powerful, mainstream brands or become a category of commodities and snake oil. Sports nutrition branding and marketing has three key opportunities for growth: Leveraging the power of influencer marketing, engaging new consumer segments, and creating more sophisticated endorsement programs.

INTRODUCTION


What’s unique about this document? How is it different fromother market research? This report is about marketing, not science and regulatory issues. These are critical issues, but there is already a wealth of information on these subjects. On the other hand, very few resources exist that discuss branding and marketing in a sophisticated way.

INTRODUCTION


Roadmap:Structure of this report

IntroductionAbout this document: scope, methods, roadmap, etc. (You’re reading this part right now)

ObservationsGeneral dynamics of sports nutrition branding and marketing: understanding the current market & consumers

Implications & RecommendationsUsing the findings in Observa-tions to create powerful sports nutrition brands & products

Part 1 Part � Part 3

INTRODUCTION


Part � /Observations: Understanding the current market & consumers What forces shape consumer habits?

OBSERVATIONS


So many products... where do we start?!

OBSERVATIONS


Athletes purchase and use many of these, but which ones fall under the umbrella of sports nutrition?

OBSERVATIONS

1�SPORTS NUTRITION BRANDING AND MARKETING OPPORTUNITIES / PREPARED BY KALEIDOSCOPE / HTTP://KASCOPE.COM

Product format:Natural

Product format:Synthetic

Products can be divided first bytheir origins:Natural or synthetic

Whole foodsVegetables, meats,

grains, and other foods found in nature

Packaged foodsAnything found at a grocery store in a

box, bag, or can

Drugs & SupplementsOTC or prescription, these products are the farthest

from natural or raw

OBSERVATIONS


Product benefits exist on another spectrum:From simply treating symptoms of illness to achieving optimum performance

Remedies & treatmentsVitamin C, echinacea,

cold remedies, pain relievers

Product benefit:Optimum

Performance

Product benefit:Prevent or treat illness/condition

Maintain normalVitamins, fortified foods,

glucosamine, fish oil

Supplements & enhancersWeight management, energy

boosters, cognitive aids, muscle building products

OBSERVATIONS


Combining the two axes yields a map of the market, and shows us where sports nutrition fits...

OBSERVATIONS


SECTION NAME

NUTRACEUTICALS & SUPPLEMENTS

Fish oil, antioxidants, weight loss, sexual aids, remedies

SPORTS NUTRITION

Protein, creatine, EFAs, nitric oxide, RTD and shake mixes, prohormones

VITAMINS, HERBS & BOTANICALS

Vitamin C, gingko, St. John’s wort, saw palmetto, tribulus

SMART & FUNCTIONAL FOODS

Energy drinks, superfoods (acai, goji, etc), fortified foods and beverages




Performance

Sports nutrition: Market mapping

Product benefit:Symptom or con-dition treatment





Performance

Sports nutrition: Market mapping

Product benefit:Prevent or treat illness/condition


The consumer landscape of sports nutrition can be broadly divided into three groups: Core, Mass, and Outliers

OBSERVATIONS


Consumers:Core

The Core are the athletes that are heavy, frequent supplement users. While athletes in a variety of sports use supplements to some degree, bodybuilders are the driving force in sports nutrition. Supplements are optional or secondary in most sports, but they are at the very essence of bodybuilding.

OBSERVATIONS


Consumers:Mass

Mass is the category of consumers that participate in regular exercise and are current or potential sports nutrition consumers. Over 33 million Americans strength train at least once a week, including 11 million active bodybuilding enthusiasts (NSGA).

OBSERVATIONS

�0SPORTS NUTRITION BRANDING AND MARKETING OPPORTUNITIES / PREPARED BY KALEIDOSCOPE / HTTP://KASCOPE.COM

Consumers:Outliers

Outliers are the people who don’t currently participate in regular physical activity or purchase sports nutrition products.

OBSERVATIONS


Outliers come in three flavors: Strivers, who have the will to change, but not the knowledge Benchwarmers, who know what to do, but lack the will to change Laggards, who have neither the knowledge nor the will

OBSERVATIONS

��SPORTS NUTRITION BRANDING AND MARKETING OPPORTUNITIES / PREPARED BY KALEIDOSCOPE / HTTP://KASCOPE.COM

SECTION NAME

OUTLIERSLAGGARDS

COREOUTLIERS

Knowledge:Little to none

Knowledge:Extensive

Consumer map

Will to change:High

Will to change:Low


Digging deeper uncovers two segments of Outliers: Strivers and Bench Warmers,and shows us where Mass fits in.

OBSERVATIONS


SECTION NAME

BENCH WARMERS

Often former athletes, Benchwarmers know what they should be doing, but have a hard time finding

the will to change.

COREBodybuilders and competi-

tive athletes. They know how to achieve maximum performance and have the

drive to achieve it.

LAGGARDSLaggards have little knowl-edge, little will to change,

and have little interest and changing either of those

situations.

STRIVERSWhether prompted by a specific event or simply

ready to change, Strivers have the will to change,

but are looking for direction and information.


Knowledge:Extensive

Consumer map

Will to change:High

Will to change:Low

MASSThe moderate majority of

people who have some knowledge and some will

to change, but usually need some help in both

areas.


Now that we understand who the consumers are, how do we help them become healthier, happier sports nutrition consumers?

OBSERVATIONS


SECTION NAME


Knowledge:Extensive

Consumer map (it’s messy, but trust me!)

Will to change:High

Will to change:Low

BENCH WARMERS

CORE

LAGGARDS

STRIVERS

MASS

Bring Strivers into the fold by giving them

information

Make it easy to get Bench

Warmers involved

Mas

s nee

ds

a little

bit of e

veryth

ing

Laggards are a lost cause.

Forget about them.


Strivers, Bench Warmers, and Mass areThe Zone Of Opportunity for sports nutrition branding and marketing. (But don’t lose sight of the Core, the people who got you here in the first place!)

OBSERVATIONS


SECTION NAME


Knowledge:Extensive

Sports nutrition Zone of Opportunity

Will to change:High

Will to change:Low

BENCH WARMERS

STRIVERS

MASS


The fundamental difference between Core, Mass and Outliers is in the physical activities they participate in.

OBSERVATIONS


SECTION NAME


Knowledge:Extensive

Activity map: What they do

Will to change:High

Will to change:Low

CORESTRIVERS

BENCHWARMERSLAGGARDS

Heavy resistance training

Light to moderate resistance training

Light to moderate cardiovascular training

Sport-specific training

Recreational sports or games

Nothing

Nothing Nothing


90

70

�0

50

40

30

�0

10

0

Sport participation 199�-�00� (millions of people)

Data: Alexa

80

100

Walking

CyclingWorkout at clubAerobic exerciseWeight trainingRunning/jogging

1996 2000 2005 2006

Data: National Sporting Goods Association

OBSERVATIONS


Core activities more popular than ever: weight lifting up 51% to 3�MM, and working out at a gym is up �5% to 37MM . Low-effort, Mass activities like walking remain most popular, although these people can still be potential targets for sports nutrition products.

OBSERVATIONS


Even with a 33% decline in cycling, overall participation in fitness-driven activities is up 18% over the past decade according to the National Sporting Goods Association.

OBSERVATIONS


Despite the increasing numbers of Americans participating in exercise, engaging them as sports nutrition consumers isn’t a sure thing. Sports nutrition is complex and intimidating, with new information and ideas added to the mix every day.

OBSERVATIONS


We can segment consumers not only by what they do, but what they buy.

OBSERVATIONS

CORESTRIVERS



Knowledge:Extensive

Will to change:High


SECTION NAMEProduct map: Sorting the market

Will to change:Low


SECTION NAME

CORESTRIVERS



Knowledge:Extensive

Will to change:High

Product map: Sorting the market

Will to change:Low

Strivers don’t have extensive category knowledge, so they

usually use products that are familiar- some-times this is a healthy and functional choice,

sometimes not

The Core use all the basics, but are gener-

ally the first to try new supplements, ingredi-

ents, and brands

Benchwarmers are attracted to products

that promise shortcuts and fast results, even

though they often know better

Laggards tend toward “healthy junk”: products that have the trappings of sports nutrition, but

none of the benefits


We can also define the segments by how they learn about fitness and nutrition, and what media they consume.

OBSERVATIONS

Will to change:Low

CORESTRIVERS



SECTION NAME


Knowledge:Extensive

Media map: Segmenting print publications

Will to change:High


SECTION NAME

Will to change:Low

CORESTRIVERS



Knowledge:Extensive

Media map: Analyzing the clusters

Will to change:High

Publications for Strivers focus on

delivering accurate, timely information to

harness their desire to change

Core publications are about one thing and

one thing only: how to get huge and ripped, by

any means necessary

Benchwarmer publica-tions are full of short-

cuts, tips and tricks de-signed to make fitness and nutrition so easy that it brings change

within reach

Publications for Laggards are mostly fluff, with

little meaningful infor-mation on fitness and nutrition. The focus is

on sports, lifestyles, and personalities.


Core media is not easy reading. It’s often extremely technical, serving the critical function of evaluating the latest research for a lay audience.


SECTION NAME

Benchwarmer media is far less technical, focusing on communicating just the basics and avoiding cutting edge or controversial supplements


In print, Core publications remain relatively tiny, with Mass publications like Men’s Health, Shape and Prevention dominating.

OBSERVATIONS


4,000,000

3,500,000

3,000,000

�,500,000

�,000,000

1,500,000

1,000,000

500,000

0

Preve

ntion

ESPN

Men’s

Health

Outdoor L

ife

Wom

en’s Health

Men’s

Fitness

Men’s

Journ

al

Musc

le & Fi

tness

Musc

le & Fi

tness

Hers

Flex

Shape

Print media: Monthly paid circulation

Data: Audit Bureau of Circulation

OBSERVATIONS


Success in print doesn’t always translate to a popular online destination. Core sites Bodybuilding.com and t-nation.com have no print component, and much higher reach than shape.com or prevention.com.

OBSERVATIONS


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.07

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.04

.03

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0

bodybuilding.co

m

ufc.co

m

mensh

ealth.co

m

preve

ntion.co

m

wannabebig.com

flexonlin

e.com

getbig.co

m

stero

id.com

musc

leandfitness

.com

shape.co

m

t-natio

n.com

Online media: Total reach (% of global internet users)

Data: Alexa

.08

OBSERVATIONS


Bodybuilding publications are a vital means of reaching the Core, but have an inherently limited audience. Sports nutrition brands should focus on using print to reach mass, and a combination of online and print to reach the Core.

OBSERVATIONS


There are three sources of influence that guide consumers through the web of information and shape their behavior: Word of mouth, Authorities, and Claims.

OBSERVATIONS


Source 1:Word of Mouth

Online is a huge part of the sports world in general, with fantasy leagues and debates over favorite teams raging on thousands of forums all over the world, but in the world of bodybuilding, peer-to-peer interaction on forums is at the very heart of the sport.

OBSERVATIONS


SECTION NAME

Sites like bodybuilding.com’s Supplement Wars forum are a critical source of information for both Core and Outliers when evaluating supplements and training methods (although the information they get may be very, very wrong)


Source �:Pros & authorities

Unlike mainstream sports like baseball, football, or basketball, there are very few fans of bodybuilders that aren’t also participants. As such, interviews with pros tend to be very technical, delving deeply into training methods and supplement regimens.

OBSERVATIONS


SECTION NAME

Authorities like the PhDs and MDs that write for core media are a critical source of trusted information for the Core


Source 3:Claims

Despite the enormous amount of effort put into claims, they are among the least powerful sources of influence. Because many claims are overstated or just plain false, consumers place very little trust in them.

OBSERVATIONS


The most meaningful insights are found in the overlap between the three sources of influence. Understanding the nuanced interplay is key to communicating with the Coreand building powerful sportsnutrition brands

OBSERVATIONS


SECTION NAMEConverging forces: How the sources of influence interact

Word of Mouth

ClaimsAuthorities

Discussion of claims supported by science or

endorsements

Discussion of ads and on-pack claimsDiscussion of research

& industry figures

Scientist & pro athlete endorsements used in testimonials or claims


Now we understand the Core: which products they use, what influences them, and where they buy. But how do they fit into the bigger picture? How do they influence Mass and Outliers?

OBSERVATIONS


1 / Filter and editEvaluate new research, products and training methods in mainstream media� / Translating from Core to MassCreate realistic, accessible versions of hardcore training and nutrition routines3 / Disseminate information Spread results of the research through WOM and media

The Core helps Outliers become Mass in three ways:

OBSERVATIONS


SECTION NAME

Experts from the Core create realistic, attainable, and understandable versionsof bodybuilding training and nutritionprinciples when they write for Mass media, like this Men’s Health articleby Alan Aragon


What makes bodybuilders such powerful influencers?

It’s very easy to contact top pro bodybuilders, trainers, and writers. Almost all of them spend time on forums, MySpace, and on answering emails, and are more than willing to answer questions from enthusiasts. This kind of accessibility makes them extremely influential.

OBSERVATIONS


SECTION NAME

Pros are quick to share their training and nutrition routines with fans, who often model their own routines after them


SECTION NAME

It’s relatively easy to get in touch with top pros like Jay Cutler


Bodybuilding is a culture in which sharing technical information is the primary means of interaction. Enthusiasts love to talk shop, comparing results on diet, training, and supplements, and the pros are right there with them on the forums and in the magazines.

OBSERVATIONS


OBSERVATIONS

Optimum Nutrition’s �008 Protein Guide is a particularly well-done piece of marketing that capitalizes on the Core’s nearly endless capacity for research


Three factors that affect sports nutrition branding & marketing rise to the top: Compromised credibilityGlobalizationSponsorships & endorsements

OBSERVATIONS


Cat and mouse regulatoryenvironment compromisescredibility

Perhaps the biggest factor in compromising the credibility of the sports nutrition category as a whole is the constant cat-and-mouse relationship with the regulatory bodies. The constant back and forth creates the perception among Core consumers that “if it works, it’s illegal. If it’s legal, it probably doesn’t work.”

OBSERVATIONS


SECTION NAME

The various steroid knockoff products do little to help category credibility.


Raw ingredients like vitamins, herbs, and many botanicals are increasingly available from China at prices far cheaper than any domestic sources can hope to offer. For manufacturers of mostly undifferentiated products with little branding like single-letter vitamins and herbs, this is a particularly worrying development.

Downward price pressure from Asian supply chain

OBSERVATIONS


As important as sponsorships and endorsements are in gaining the approval of Core consumers, the sports nutrition industry remains relatively unsophistacted in comparison to mainstream and action sports. Creating the right sponsorships and endorsements represents one of the largest opportunities for sports nutrition marketers.

Role of sponsorships, endorsements

OBSERVATIONS


SECTION NAME

EAS’ endorsements are some of the industry’s best, with mainstream, yet credible, athletes like Brady Quinn.


Emerging segments

This is an exciting time to be part of the sports nutrition world. It is no longer just the domain of bodybuilders and gym rats. New consumers from many different backgrounds are entering the category.

OBSERVATIONS


Three of the most prominent emerging segments represent the biggest opportunities: WomenMixed Martial Arts (MMA) fans and athletesEndurance athletes

OBSERVATIONS


SECTION NAME

Brands like IsoFemme are part of an explosion of women’s sports nutrition products


SECTION NAME

While bodybuilding fans rarely talk about ball-and-stick sports, nearly every site has an MMA discussion forum


SECTION NAME

Hammer Nutrition focuses on endurance athletes like cyclists, triathletes, and runners, deploying very targeting products and marketing communications.


Part 3 /Implications: Uncovering opportunities for the future of sports nutritionbranding & marketing

IMPLICATIONS


Although sports nutrition faces some immediate challenges, the long term opportunities are enormous.

IMPLICATIONS


Those that can resist commoditization , earn the trust of Mass consumers,and build powerful brands will reap the rewards, reaching previouslyunimaginable heights.

IMPLICATIONS


Responding to low-cost rivals by cutting prices would be a critical misstep, likely sending the entire category into price wars that lower margins for everybody.

IMPLICATIONS


Meeting the challenge of new rivals and earning the trust of consumers isfundamentally a branding and marketingchallenge.

IMPLICATIONS


There are three key opportunities for sports nutrition to grow through branding and marketing:

IMPLICATIONS


Opportunities 1. Leverage the power of influencer marketing �. Engage new consumer segments 3. Create sophisticated endorsement programs

IMPLICATIONS


Contact

KaleidoscopeFinn McKentyStrategist [email protected] 7��.10�0

IMPLICATIONS

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