Pittsburgh-based General Nutrition Centers (GNC) has been synonymous with healthy living through healthful products since 1935. Its chain of retail locations extends around the globe, and its reputation for quality products is unexcelled. That is the legacy entrusted to IMG Worldwide Inc., now that it has the rights to extend GNC’s brand equity into product categories not sold in GNC stores. IMG currently licenses sports, nutritional water and protein beverages, health electronics and small appliances with the GNC brand.
With more than $7 billion in global retail sales and over 50 years of experience, IMG Licensing – a division of global sports, fashion and media leader IMG Worldwide – currently represents more than 1,000 athletes, coaches, industry executives and sports organizations across the sports, entertainment, fashion and media industries. Its more than 4,000 employees operate in 50 countries around the world.
As for GNC, the retailer sets the standard in the nutritional supplement industry by demanding truth in labeling, ingredient safety and product potency, all while remaining on the cutting-edge of nutritional science. With its international chain of more than 7,500 retail stores, GNC is a leading global specialty retailer of health and wellness products, and is devoted exclusively to helping its customers improve the quality of their lives.
“This is the first time in GNC’s 77-year history that the GNC brand will be available to a broader retail distribution and in product categories outside of GNC’s core competency of supplements and sports nutrition,” IMG Worldwide Vice President of Licensing Randy Klein points out. “The GNC brand will now be available to retailers that understand the value of the health and wellness consumer. GNC wants to be where the consumer is and in product categories that extend GNC’s brand equity in health and wellness.”
That includes select mass retailers, health, grocery, drug and convenience stores for many of the products, and department and specialty retailers for the small appliances, as well as on-line. The high recognition and consumer loyalty of the GNC brand made the decision to license it an easy one.
“We realized that we have a very strong brand – a brand that represents health and wellness – a brand that is very trusted by consumers,” according to GNC’s Director of Business Development Rob Schwartz. “So we believe that we should leverage that brand and look at opportunities that are outside our core retail operations to use that brand effectively on products that align with our mission, align with health and wellness.”
To the Aspirational
GNC’s goal for IMG’s licensing is to extend its brand beyond its core market of sports nutrition and supplement users. “We’re hoping to attract more people to the brand, absolutely,” Schwartz emphasizes. “It’s going to be somebody who is interested in being fit and active and being healthy. They trust that GNC will provide them with products to meet those goals.”
The demographics of the average GNC customer skew young, Schwartz notes. He estimates 35 percent of GNC’s customers are under the age of 35. “We really have a core concentration between 18 and 45 years of age,” he says. “That is where a lot of our customer base is. It’s very evenly balanced between men and women. They tend to be higher-income.
“The customer that is coming to our stores is going to be more engaged in fitness and exercise than the average consumer,” Schwartz continues. “I think clearly for the mass-market consumer, they’re not necessarily going to be as focused as the specialty market. Although they link GNC with health and wellness, there’s a bit more of an aspirational target in the mass market to aspire to live that lifestyle, and maybe they haven’t gotten there yet.”
That is the goal of IMG’s efforts. “This is major news in the world of licensing and brands,” Klein stresses. “Health and wellness had been the topic of discussion not only on the consumers’ lips but in retail now for years. Now, the No. 1 specialty retailer in health and wellness is bringing their brand to a larger audience. It’s huge news because it’s an extremely aspirational brand.
“When the consumers think of GNC, they think, ‘I’m going to take this product and I’m going to get results,’” Klein continues. “Now, GNC is bringing results-driven brand consumer loyalty and science to the everyday consumer. That’s extremely powerful news for the consumer, and for retail. This is a huge win for the consumer because they will now have a broader category selection of GNC products to choose from. The retailer will benefit by adding a powerful brand that will drive traffic to their stores. At the end of the day, we want the consumer satisfied with the products, retailers happy with the sell-throughs and a partnership formed where the GNC brand now has permanence on all retail shelves.”
Schwartz at GNC is feeling the retail demand for health and wellness products. “It’s a huge, growing market, and many retailers are realizing this,” Schwartz maintains. “We’ve had a lot of retailers express interest in our brand. So we are very careful about what we do with it, as anybody who has a strong brand would be. So again, I want to emphasize the partners and types of products we’ve selected.”
GNC has high standards for any products on which its brand is emblazoned. “All the products have to represent what we represent in our supplements and sports nutrition products,” Schwartz says. “We offer high value for the dollar. Our products are innovative, different and not the typical nutritional supplements you would find elsewhere. The same thing is true for our licensees – they have to offer something additional, some innovation you’re not going to find elsewhere. They have to be different. We’ve worked hard with the licensees to get a product assortment that meets with our values and the value that we want to provide to the consumer.
“The actual quality of all items are in keeping with the equity of our brand,” Schwartz insists. “So when somebody sees the GNC brand – wherever it is, no matter what product it’s on – there’s a good fit. We’ve all been familiar with examples where a brand was extended too far and gone beyond its core competency. We’re treating that very carefully and choosing the right partners.”
Just having the GNC name on a sports drink is not enough. “We get the credibility for the name on the bottle, but we really have to deliver on the product that’s inside that package,” Shadow Beverages and Snacks COO Sam Jones stresses. Shadow will produce three different lines of drinks under the GNC brand – sports drinks, nutritional waters and protein drinks.
Jones asserts the sports drink line, called GNC Sport, is approximately three times more functional than some of the most famous brands of sports drinks. These six different types of drinks are available in performance and high-performance lines. “We have an extreme performance, where we really increase the functionality of that product from what most people are familiar with from a traditional product standpoint,” Jones says.
“You’ve got the hardcore, heavier endurance of the physically fit male or female – they absolutely need more,” he emphasizes. “That’s why they go to GNC and buy powders and pills. They do a lot of their own mixing for drinks. Sometimes they need something on the go, and our extreme performance line is built for that individual.
“You’ve got consumers that may work out a little – even soccer moms burning a ton of calories just trying to keep up with the family – they need a little something more, so the extreme performance line is not for her, but the base performance line absolutely is,” according to Jones.
The extreme and performance lines are repeated with six different nutritional waters under the GNC brand. The extreme protein drink is a milk-type product available in chocolate, vanilla and strawberry. Protein levels are 35 grams per 14-ounce bottle along with electrolytes. “You will get your protein in it, but we add so many other elements to that line to make it a well-rounded beverage for any consumer,” Jones says.
“On our performance-line protein, we dialed it down a notch to open it up to new consumers,” he continues. “It’s juice-based with 15 grams of protein in it, and it’s a 50-percent juice product in orange and wild berry. We reduce the performance package a little bit for consumers who may not have tried a protein product in their life.” Five different protein drinks will be available. “So for us, we’re starting the GNC product line in January with 17 products all at the same time.”
Development of the line began in March. “By May and June, we were all working together collaboratively on finding out what the best ingredients would be in terms of a sports drink and what is real performance in a sports drink,” Jones relates. “You want to ensure you can deliver the best taste. As far as what the functional ingredients are, they have been set for quite a while. We’ve been tweaking mouth feel, taste, drinkability and gulpability.”
For the 17 products being introduced in the first quarter of 2012, Shadow Beverage developed more than 120 possibilities, not counting the protein drinks. “It’s kind of hard to get a great gauge of what a product is going to drink like in a 20-ounce bottle when drinking 2 ounces at a time,” Jones concedes. “We’ve taken time in building up the best flavor components and increasing the serving size up to 20 ounces.”
GNC has been providing beverages in powder form for years, Jones points out. “In a nutshell, we’re taking all that science that GNC has developed over the years and putting that into a ready-to-drink product,” he says. “We worked with GNC, their labs, their product development group and our flavor house in terms of delivering a great-tasting product with all those functional ingredients at the high level we’re using.”
Jones estimates each bottle of the 20-ounce drinks have only 50 to 75 calories. “We didn’t add sugar to anything,” he maintains. “Any calories we get for the products are from the functional ingredients themselves. Sometimes we get a few calories from the colors.”
Distribution of the drinks will be wide-ranging throughout 2012, including mass retailers, health, grocery, drug and convenience stores. “We’ve gotten phenomenal acceptance from everyone – from retailers to direct store delivery (DSD) distributors – and we haven’t told anyone what it’s going to cost,” Jones marvels. “That’s a pretty exceptional story by itself. It goes back to justify the name on the bottle.”
Jones expects the GNC-branded beverage lines to be expanded. “GNC is extendable into any beverage category you can imagine,” he insists. “In doing that, you’ll see some extended combination of those categories to deliver a true functional product with the addition of caffeine or teas and juice in the future from us. I wouldn’t say it’s completely endless, but we have a pretty broad road in front of us.”
With health being the common denominator in GNC products, branding small appliances for healthy living makes sense. Assisting with that goal is Omega Products Inc., a manufacturer of kitchen equipment, and a division of The Legacy Cos., Weston, Fla. The Legacy Cos. manufactures commercial foodservice equipment and consumer appliances.
“GNC has incredible brand recognition,” The Legacy Cos. Vice President Teresa Asbury declares. “It’s very well-known in the health and wellness sector for healthy living and healthy lifestyles. With everything that is going on, that’s become a larger segment in the community than it has in the past. I see that it’s only going to increase as folks become more aware of their health and take better care of themselves. GNC is synonymous with that type of program.”
Currently, the company is offering two blenders, two juicers and a food processor under the GNC name at its website and others like amazon.com. It expects the devices to begin appearing in retail stores during the fourth quarter and into 2012.
“Our entry-level blender is still considered a commercial blender with commercial approvals,” Asbury points out. “It’s significantly heavier-duty than the average blender that would be purchased in many of the retail outlets.” She thinks the appliances are suitable for sale not only in health stores but also at mass-market retailers.
“While it’s certainly true that many people go to a GNC for their health needs, there’s also major retailers that are selling healthy appliances and healthy living,” she adds. “I think the GNC products also make sense in those locations, almost as a store within a store, if you will. And with the GNC brand name, it certainly brings instant recognition as a quality product and a product focused on health and wellness.”
The GNC brand is being licensed for use on the small appliances for five years. The Legacy Cos. is considering other appliances for GNC branding, Asbury says, but at press time they could not be revealed.
Part of healthy living is monitoring variables such as weight, pulse and blood pressure. Helping consumers do that will be a line of GNC-branded devices such as blood pressure and heart rate monitors, pedometers, digital jump ropes that track performance and eight to 10 different weight scales that are wireless, have speech capability or track body mass index.
“We’ve been working all year to really put a lot of thought behind each product to make sure they offer unique features to the consumer,” says Liza Abrams, vice president of licensing for manufacturer Sakar International, Edison, N.J., another GNC licensee. “We don’t want to be a me-too brand. The GNC brand is so respected, and it’s a high bar to reach, but that’s what we aim to do with these products.”
Additional products utilize ultraviolet cleaning with sanitizing wands and toothbrush holders for household and travel uses, and there is also a line of medication supplement dispensers and pillboxes with timers and alarms. Also planned is a men’s grooming line of shavers, magnifying nail clippers and tweezers. Innovative products include massagers and massage cushions for chairs, air purification devices, body tape measures, power grips, weights and pushup bars.
“As a company, we’re able to offer such a wide program because we already have these different divisions within our company,” Abrams explains. “So it’s something we’re incredibly excited about.”