July / August 2005

Welcome to the latest edition of Nutraceutical News from IFS. In this issue, you'll read about the rapid growth of the nutraceutical industry. You'll also find information on how rising gas prices are impacting your fulfillment costs, tips for making sure your website is the best it can be, and a suggestion to "know your numbers" in order to provide an improved customer service experience.

For additional information about what we write here or about any of our products and services, you can always visit our website, www.ifssolutions.com. To share your feedback about this newsletter, please click here. To unsubscribe, please use the link at the end of this issue.

In this issue:


INDUSTRY UPDATE: Nutraceuticals see rapid expansion;
people first, but pets are close behind

In the United States, the nutraceutical industry has already reached a whopping $86 billion. More than 40% of Americans use alternative medical therapies and nutraceuticals, herbals and botanicals account for a significant proportion of the industry's sales.

Consumers today are taking greater responsibility for their own health, turning to nutritional supplements and functional foods and beverages that offer greater natural health benefits and fewer synthetic ingredients. In fact, a recent survey in Consumer Reports showed that nutrition is the top concern driving their food and health purchasing decisions.

The food, beverage and supplement marketers have responded with a barrage of products supported with extensive advertising, scientific-sounding label claims and educational literature. Two particular categories have gained more exposure than others of late:

  • sports nutrition and weight loss; and
  • specialty pet foods.

Within the sports nutrition and weight loss category, three main products contributed to the market's dramatic growth in 2004:

  • low carbohydrate products - which grew by as much as 154% but sales have now slowed considerably;
  • sports energy beverages (e.g. Gatorade, Red Bull) - which grew by 18%; and
  • sports supplements - which grew by 6%.

Likewise, pet product companies are also responding with a vast array of specialty foods, treats and therapeutic supplements for dogs, cats, horses, ferrets and reptiles. According to the State of the American Pet Survey, a study of 2001 dog and cat owners sponsored by the Health Pets 21 Consortium found that 41% of pet owners had considered or tried various alternative therapies, including nutritional supplements (29%), herbal remedies (7%) and homeopathy (4%).

So if you're exploring other ways to grow your nutraceuticals business, you may want to consider the categories of sports nutrition / weight loss or specialty pet foods.

Information gathered from Functional Foods & Nutraceuticals (July 2005) and Nutraceuticals World (July/August 2005).

 


FULFILLMENT NOTES
How are rising gas prices impacting your fulfillment costs?

We've all felt the impact on our wallets when we fill up our cars. Gas prices have been at record highs for some time now. How is that impacting your business and are you doing what is necessary to deal with those extra costs?

At IFS, we closely track our shipping expenses. UPS increased its fuel surcharge on all ground shipments to 2.75% effective August 1 and Fed Ex has just announced that same 2.75% surcharge on their ground shipments (but for air shipments, expect a staggering 12.5% surcharge). The good news for our nutraceutical clients is that the US Postal Service has not added any surcharge. And because many of our nutraceutical clients choose to ship their products via Priority Mail or First Class Mail, they've avoided the extra expense. Plus, IFS is creating additional savings through other means.

So, although you may have avoided extra shipping charges by choosing the U.S. Postal Service, be sure to monitor all the costs you incur from your other vendors. For instance, have you incurred any fuel surcharges on incoming shipments from your manufacturer? It's possible, so make certain you double check.

As a good business person, it's critical to track every penny of your costs, so make sure you monitor any additional expenses fueled by rising gas prices.

 


MAXIMIZE YOUR MARKETING EFFECTIVENESS
Is your website up to snuff?

These days, having a website is practically mandatory. It's an important marketing tool because it can have a huge impact on your image, plus it gives a company legitimacy (especially if yours is a young business). In fact, although clients and customers might first connect with you through a variety of other channels - e.g. responding to a print ad, reacting to a direct mail piece, as a result of a personal sales call, etc. - you can almost guarantee they'll check out your website before they decide to do business with you.

Is your website up to snuff? Here are seven important elements to a first rate website:

  • It is easy to navigate
  • The images load quickly
  • It is visually appealing
  • It clearly explains what your company does
  • It is easy to scan (short paragraphs and lots of bullets)
  • It is up-to-date, meaning all the information and "recent news" is accurate and current
  • Your contact information is easy to find (include a phone number on every page)

If any of these points is lacking on your site, take action today. The resulting impact on your bottom line could be a very pleasant surprise.

 


CUSTOMER SERVICE CORNER
Know your numbers - Understanding the key metrics of your business

Do you know how many calls your Call Center typically receives on a Tuesday? What about the number of online and/or mail orders you get each week? And how many packages will your fulfillment center ship today?

These metrics may not seem that important at first, but knowing them can mean an improved customer service experience. Why? Because you know what to expect, therefore you staff your Call Center and your warehouse accordingly. And when you're fully staffed with a well-trained crew that knows exactly what they are supposed to do each day, your customers have an improved experience.

Plus, knowing those numbers means you have a solid handle on your business. That way, if you start seeing changes in those numbers - whether it's up or down - you'll know to quickly find out what's causing the changes and adjust your staffing and your marketing efforts accordingly.

So if you want to offer the best possible customer service experience, be sure to know your numbers!

 


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IFS is a world class, full service fulfillment operation with a track record of success. A woman-owned business, we proudly serve some of the country's most respected corporations. With a special expertise in the fulfillment of nutraceuticals, we can help you run your nutraceuticals business more efficiently and more cost effectively.



Innovative Fulfillment Solutions
210 NW Plaza Drive
Kansas City, MO 64150
www.ifssolutions.com
Toll Free: 1-888-275-3000
Local: 816-587-5880
Fax: 816-587-5881