The USA market is big and personal health gets a lot of focus, and therefore spend-of-wallet. But how to position your health or wellness product in this broad market, and make sure it become a success in stead of a failure? A few tips from our experience to get you started right.
Check out your category
The Health & Wellness category covers a wide range of vitamins, dietary supplements, immunity boosters, nutraceuticals, food additives, numerous plant extracts and a myriad of natural healthcare products. They come in deliverables such as pills, capsules, sachets, gummies, beverages, nutritional bars, chocolate, honey and more. To get an idea of what your competition looks like, you should visit a couple of WHOLEFOOD stores, or some Independent Natural Health Food retailers, and if you can, attend the Expo East Natural Products trade fair in Philadelphia or Expo West in Los Angeles.
Also look from the perspective of your prospective buyers. You may know that your product is different from the competition, but how do they know? Are all the benefits clearly visible on the package, or do you need a long story to tell them. The longer the story, the less differentiation, and the more competition you will face.
Check FDA certification
If you still believe your products have a powerful and unique selling proposition, your next step would be to make sure that your product and packaging is compliant with the US regulatory requirements. Also note that your supplier (foreign manufacturer) needs to be FDA certified. For help with any FDA requirement there is a good private sector service available at www.registrarcorp.com
The FDA (Food and Drug Administration) controls the labeling of your packaging, things like listing the Nutrition Facts, all the ingredients, and even the size of the fonts on the size label. You can just look at a competing product’s label and you will see what is normally required.
The FDC (Federal Trade Commission) controls advertising and can restrict your claims of the product benefits. However, the USA is far more liberal than most countries when it comes to stating the benefit claims of natural health care products.
Stand out more with additional certifications
There are several voluntary certifications you can apply for, including.
- All Natural – No Artificial Flavors
- Verified No GMO
- Organic Certification
- Kosher (National Orthodox Union)
- Trans Fair
- Fair Trade USA
Find a sales broker
Now you need a sales broker to introduce, promote and sell your products to the natural food retail channels and guide you on how to set up your unique distribution model. We have found that the brokers all have their own preferred method of distribution. At the very least you will need to locate a 3PL to handle your most basic warehousing and shipping requirements.
The goal is to have your products picked up for distribution by industry giants like KEHE or UNFI. To get one of these multibillion-dollar distributors on board you will need to have a demonstrated “proof of retail concept” for your product and have demand from at least 30-40 retailers in each region where distribution is sought.
Legal Entity, Back Office
At some point you will need a business entity, like an LLC, to set up your USA Bank Account and enter into agreements with brokers, distributors, customers, 3PL providers, freight forwarders and a US Customs broker.
Back-office functions are no different in most countries and likewise your USA business will need a savvy Account Administrator to manage yours.
Bring your budget to enter the USA market
The potential of the United States is huge, but competition is also strong. It may not be possible to find just one agent or distributor who covers the whole market for you, mostly you will have to work with one per group of states. Unless you can do business with one of the big retailers.
If you want to enter the market, bring your budget. You will have to go there and spend time. If you want our team or any other consultant to do a distributor search for you, think of 10,000 to 15,000 euro as a base fee. Your distributors will ask for marketing materials, perhaps advertisements, retailers will ask for slotting fees. So draft a proper business case and be prepared to invest in order to gain.
Alliance experts is happy to help you with your strategy to enter the USA market. Just contact one of our team members or click below.