Don Mills: The king of supplements in Canada

Article content

Supplements as a product category is big business. Few Canadians do not take a supplement of some sort for nutritional or health reasons, whether it be probiotics, Omega 3 or multivitamins. The market in Canada is estimated to be worth more than $1.5 billion and is expected to grow by a compounded annual rate of six per cent between now and 2030.

Supplement market

Supplements are widely available in Canada through a variety of channels including big box retailers like Costco and Walmart, grocery stores, pharmacies and online through sites like Amazon. There are also specialized retail outlets that sell only supplements. The two biggest retail chains in Canada are Popeye’s Supplements and Supplement King. Interestingly, Supplement King (supplementking.ca) is headquartered in Nova Scotia.

There have been on-going concerns related to product safety and efficacy for supplements over the years. There are few clinical trials to back up product claims. In Canada, there is a natural product number (NPN) that is now required by Health Canada indicating the product has been approved by Health Canada and is safe, works as described and is of high quality. Of interest, Supplement King only carries products with this designation. In addition, the company endeavours to carry as many Canadian made products as possible, with the majority of its products currently being produced in Canada.

The Supplement King

Supplement King was founded in 2004 by Nova Scotian Roger King, originally from Rothesay, New Brunswick. The company was started while King was attending Saint Mary’s University as a means of providing him a source of student income. His interest in supplements was driven initially by his involvement in weightlifting. It led to the opening of a small kiosk in Scotia Square and then the opening of his first retail in 2006 in Park Lane.

Recently, King opened his 100th retail store in British Columbia and opens on average two new outlets per month. The chain has revenue of more than $100 million according to King who was reluctant to provide an exact revenue number being a privately held company. Supplement King employs 1,000 people across the country and a head office staff of 20 in Dartmouth that primarily provide centralized financial and accounting support, and marketing services, as well as manage the chain’s merchandising and online sales program and product distribution.

He has been recognized for his business success by being named to Atlantic Business Magazine’s Top 50 CEO Hall of Fame, as an E & Y Entrepreneur of the Year in Atlantic Canada and as the Halifax Chamber’s Businessperson of the Year.

Growing pains

One of the biggest challenges growing the business was sourcing product manufacturers and establishing vendor relationships with those that manufacture supplements. Having now reached scale for his operations, Supplement King is able to negotiate better price and volume discounts for his retail chain. With each additional retail store that King opens, his ability to secure improve pricing and volume discounts increases.

Growth strategy

The rapid growth of Supplement King over a relatively short period of time has been driven by the decision to license his brand to others. King’s licensing strategy is focussed on finding those interested in owning multi-retail stores. This helps secure the success of his expansion plans as most new outlets are being managed by experienced and successful operators. In fact, King told me eight out of 10 new openings are with existing licensees. It also has the added advantage of dealing with fewer licensees and having stronger relationships with those licensees as a result. It currently requires an investment of about $400,000 to become a Supplement King licensee which includes the costs of fitting up the retail outlet.

The selection process for potential new retail stores is also key to the company’s success and growth. Supplement King prefers to locate their retail stores in close proximity to major health and fitness facilities to be nearer to a key customer base for the chain, those interested in sports nutrition and health.

Another key to the company’s success is the product knowledge of its staff and the company places a great emphasis on the training of its frontline staff to build confidence and long-term relationships with its customer base. King places a strong emphasis on building a corporate culture that focuses on helping Canadians achieve their fitness goals.

It is interesting to note one market the company has yet to penetrate is Quebec. In a recent Insights Podcast, King acknowledged the challenge of entering a mainly francophone market, but the company is looking at that market and expects to eventually have a presence in that market.

It should be noted Supplement King is the official supplement retailer for both the CFL and the CHL.

What’s next?

King has ambitious plans for growth. He expects to double the number of retail stores to 200 within the next three and a half to four years, with 26 new stores scheduled for the current year alone. If he succeeds with this growth plan, he is likely to establish Supplement King as the leading specialized supplement retailer in Canada. Currently Popeye’s Supplements and Supplement King have about the same number of outlets. One thing driving the aggressive expansion plan for the company is population growth across the country.

When asked about possible expansion into the U.S., King indicated the company is considering that market, but unlikely to enter the U.S. until it has achieved it current expansion goal in Canada.

Looking ahead

Supplement King is a rare example of an Atlantic Canadian based company achieving success nationally as a retailer. With the possible exception of Sobeys, there are few national retailers that have originated and been based within the region. There are many who have had success expanding beyond the region, including Irving Oil. What is encouraging about Supplement King is the company’s success nationally demonstrates it is possible to achieve such success while headquartered in Atlantic Canada. But it does require a certain ambition we need more of within the region.

Don Mills is the co-founder and former owner of Corporate Research Associates Inc. (now Narrative Research), an active advocate for change and involved as a partner with several private companies. He is also the co-host of the weekly Insights Podcast.