Azbuka Vkusa launched sales of its own brand of dietary supplements

The departure of IHerb from Russia and the decrease in the share of presence in the Russian market of foreign manufacturers of dietary supplements (BAA) attracts non-core players to the segment. The Azbuka Vkusa retailer began producing its product line at the facilities of the French Irati. Other networks have similar plans. However, experts warn of high competition in the market, especially from pharmaceutical manufacturers, as well as a shift in demand from traditional retail to online channels.

“Azbuka Vkusa” has launched the production at the facilities of the French Irati of 12 types of dietary supplements under its own trademark (private label) “Azbuka Life,” the retail chain told Kommersant. Irati did not respond to Kommersant’s request. The cost of dietary supplements at retail will vary from 1.2 thousand to 2.7 thousand rubles, which, according to DSM Group CEO Sergei Shulyak, is noticeably higher than average market prices. “American Solgar drugs are sold in approximately the same price category,” he adds. The high cost of ABC of Taste dietary supplements is associated with production abroad, the cost of which increases during periods of unstable ruble exchange rates, notes Kommersant’s interlocutor in the retail market. According to DSM Group, in August 2023, the average cost of a package of dietary supplements was 347 rubles, an increase of 22% year-on-year.

The niche of dietary supplements turned out to be free, including after the IHerb marketplace left Russia, which opened up opportunities in this segment for local retailers, says General Director of Infoline-Analytics Mikhail Burmistrov. Thus, Vkusville told Kommersant that the chain’s line of private label dietary supplements and vitamins exceeds 100 items, which are produced in Russia. X5 Group and Magnit did not respond to the request.

In the spring of 2023, the authorities of the Moscow region reported that the cosmetic retailer Mixit would also produce dietary supplements at a new production facility in Solnechnogorsk. As Kommersant discovered, Health Laboratory LLC, associated with Mixit co-owner Elena Nazarova, submitted applications to Rospatent to register the Mixvit brand in June of this year. The company did not respond to Kommersant’s request.

According to Mila Grosheva, director of marketing for the BUYMI service, a year ago the share of dietary supplement orders from IHerb on the platform reached 7–10%, but today it does not exceed 2%. Demand for goods from IHerb is falling due to a noticeable increase in the dollar exchange rate, rising costs of logistics and an increase in the supply of Russian networks of analogues of Western dietary supplements, she explains. The expert adds that competition in the Russian market in the dietary supplement segment is already very high. Added to this is the active flow of demand for dietary supplements online, while, for example, in pharmacy chains this segment is practically not growing, notes Mr. Shulyak. Executive Director of the SRO Union of Dietary Supplement Manufacturers Alexander Zhestkov believes that manufacturers will increasingly move online.

According to DSM Group, over the eight months of 2023, 248.1 million packages of dietary supplements were sold in pharmaceutical retail, which is only 1.2% more year-on-year; in monetary terms, sales increased by 13.7%, to 78.7 billion rubles. Natalia Prokopyeva, Chairman of the Board of Directors of Evalar CJSC, explains the increase in money by a price correction due to the volatility of the ruble exchange rate.

Among the largest manufacturers of dietary supplements in the Russian Federation in terms of sales volume are Evalar, Polaris, VTF and Kvadrat-S. At the same time, the American Solgar dropped from second to fifth place. In general, according to DSM Group, the share of imported dietary supplements in the structure of pharmacy sales in monetary terms in August 2023 decreased from 40.3% to 32.1%. Buying foreign dietary supplements is not always justified, says Mila Grosheva: drugs that cost around 3 thousand rubles on IHerb. per package, in retail can reach 7 thousand rubles.

Alina Savitskaya, Anastasia Tikhomirova