Innovation is key for independents

We talk to Tej Lalvani, the most recent business mogul to enter the BBC Dragons’ Den and CEO of the UK’s top vitamin company by sales value, Vitabiotics.

Product innovation sits alongside personal advice and customer care as a distinct advantage that independent retailers have over the multiples and online-only shopping pages.

Tej Lalvani believes that a surge of innovative developments in the delivery of VMS, not to mention an explosion of research leading to ever higher quality, can be used by savvy independents to further build their customer base.

Increased supermarket and internet sales of supplements at keen price points makes life tough for independents, he says, but there is an opportunity for independent health food stores.

“A lot of companies are having issues supplying the supermarkets, mainly because of the downward pressure on prices due to online competition,” says Lalvani. “Sadly these pressures work against investment into new product development.”

The supermarkets themselves like to stick with tried and trusted brands and are therefore reluctant to take chances. “That’s counterproductive for the industry because ultimately we do need innovative products coming to the market,” he adds.

That’s where the opportunity lies for independent stores.

“Independents have the flexibility to regularly bring new products into the market and also offer customers a personalised experience,” says Lalvani.

“Supermarkets struggle to offer customised advice and customer care to the same degree that independents do so well.

“If staff are highly trained, friendly and knowledgeable on the latest products, customers will keep coming back, whether it’s to find out the latest skin supplement or herbal remedy for example.”

Turning back the clock

Vitabiotics started out in 1971 with a mission to get its products on the shelves of independent stores throughout the land.

“That’s how we got distribution, going door-to-door to the independents who remain very important to us,” says Lalvani. “This is a great place to bring new products to the market and get important customer feedback.

“Getting into the multiples is a significant challenge, making independent stores an easier channel to bring new and innovative products quickly to the market. This allows suppliers to build their brands to a reasonable size while testing feedback without too much risk and costs.”

Selling by category

He also believes independents can succeed in this respect by organising their shelves in a category style, rather than by brand.

“A lot of independents used to organise products by brand, but displaying by category takes away a lot of confusion for customers,” he says. “If they are in a hurry and looking for a particular ingredient, searching through each product of each brand is time consuming and ultimately frustrating for customers who may just end up walking out. That’s less likely to happen if the various health categories are conveniently signposted.

“The in-store customer experience and having something new to find are big advantages for independents.

“Independent retailers may have limited shelf space but it’s important to keep it fresh. So rather than just adding more SKUs, if 15% of their range every month is being replaced by new products, then there’s a huge opportunity to keep customers coming in.”

Lalvani observes that a lot of his competitors sadly don’t support independents. “We think [the sector] is very important so we have our own independent sales team that talks about the products to sales advisors, helps with merchandising, POS materials and so on.

“We’ve been doing that for years because it helps to build strong relationships and ultimately a larger customer base. Our team educates and provides useful product information to the staff and their customers, whether health food shops or pharmacies.”

What’s new?

On Dragons’ Den, Lalvani has often referred to new innovations that he wants to bring to the UK market. We asked for some examples.

“We have been researching a new range of vitamin-infused toothpaste,” he says. “Toothpastes have come a long way in the last 15 or 20 years and there’s still plenty of innovation to be done with nutrients for teeth and gums. This is something we are looking to bring out in the future, as natural as possible and with no harmful products in them.”

An expanding category is pet nutrition. “The amount customers spend on their pets today is growing significantly and there are more products available for pets. Nutrition for the health and wellbeing of pets is going to be increasingly important in this area.

“We get incredible stories from our customers whose dogs had been slightly lethargic, or less active, perhaps even suffering, and now their owners have expressed a huge change in vigour and energy after giving them Vitabiotics SuperDog. We are looking to expand this category further to include cats as well, however for now we’re now focusing on approaching the medical community such as vets to recommend our joint range of Superdog supplements to owners.

“Independents should look at the pet nutrition category. A growing percentage of the population have pets and when shopping they consider their pets as part of the family.”

Another trend is alternatives to pills and capsules. “For example, gummies and soft chewies have been successful for a while in the US and I think that is now filtering to the UK,” he says.

“The new generation in particular is looking for more taste-driven edible foods (as opposed to traditional tablets and capsules), so we have launched our Perfectil collagen drink, one shot a day for hair and skin. It’s becoming a very popular format.”

Worth investing in

Lalvani reports that his first season on Dragons’ Den was “phenomenal, really enjoyable”, seeing 102 businesses over a six-week period.

“For me, one of the discoveries was T Plus Drinks – tea with vitamins,” he says. “We thought about this a while ago when herbal teas were taking off and we considered vitamin-infused teas.

“However, it got pushed back on our list of priorities, so when this came before the Dragons I thought it was the right time and a great idea. We are now doing a deal with them to co-brand with Vitabiotics and launch nationally.” The initial range includes vitamins with teas for detox, immunity, energy and a multivit tea blend.

Other investments made by Lalvani included Shakesphere patented protein shaker bottles and Wool Couture – yarn DIY made easy.

ONLINE SALES?

Lalvani has seen the trend for independents to set up their own online shop, but he has a warning: “Unless you can build a strong brand online it’s probably not worth it. It takes time and costs money, not least for shipping.

“But if you build a good enough brand within your community and you are quite well known, why not try it? Or maybe set up your store in an Amazon marketplace or eBay environment so you don’t necessarily have to build up your own brand to get customers to buy from you. Customers searching for a particular type of product will find you that way.

“The cost of building a brand even online is still expensive because there’s digital marketing, social media and so on, and it all costs money.”

Hitting the right notes

Tej Lalvani started his career more than 20 years ago working in the warehouse of his father's company, proving his worth before becoming CEO.

He was named Young Entrepreneur at the Asian Business Awards in 2012 and Young Entrepreneur of the Year by the entrepreneurs’ network TiE in 2013. In October 2017, he ranked at number 48 on the GG2 Power List of the most influential Asian people in Britain.

Along with his wife Tara, he runs a property investment business in London. His hobbies include composing music and playing drums, keyboard and guitar.