Editor’s note: The Supply Side section of Talk Business & Politics focuses on the companies, organizations, issues and individuals engaged in providing products and services to retailers. The Supply Side is managed by Talk Business & Politics and sponsored by Propak Logistics.
Employees of Glucose Health, a nutritional supplement made in Walmart’s backyard of Gravette, have spent much of the past year trying to win a spot on the retail giant’s shelves. They’ve won, and now they are working to quadruple their production.
The Arkansas startup pitched their tea mix product at Walmart’s Open Call in July 2015 and over the next seven months met with the retailer twice to tweak labeling and negotiate lowering pricing, according to CEO Murray Fleming.
“We just got orders for 1,800 stores across the nation on March 8, and we are thrilled with the speed at which Walmart has made this happen,” Fleming told Talk Business & Politics. “Our manufacturer John Lykins who runs an FDA approved pharma lab in Gravette is also ramping up his capabilities to help us expand our distribution footprint in the next six months.”
Lykins has puchased a 20-cubic ton mixer which quadruples his capacity. He also added 1,700 square foot to the Gravette compounding lab and has ramped up his staff from five to nine in preparation for the Walmart order. He said the lab will begin mixing product next week so that it can be in stores by mid-April.
Glucose Health is powder mix that blends with water to form a blueberry tea drink that has been shown to help Type 2 diabetics maintain blood sugar balance. Fleming said the product competes with dairy based Glucerna and offers consumers a change from milk to tea. The product is consumed just once daily and is sold in 15-ounce plastic containers like Metamucil. The product will be sold in the pharmacy section of Walmart U.S. Stores, which Fleming said is among the best stocked with product specifically geared to pre-diabetics and Type 2 diabetes, which impacts 29.1 million people or 9.3% of the U.S. population. The Center for Disease Control estimates that another 86 million adults in the U.S. are pre-diabetic. (Statements about health impacts by Glucose Health have not been evaluated by the U.S. Food and Drug Administration.)
Fleming said the growing demand for blood glucose maintenance products is expanding each year, which is part of the reason retailers are interested. He said having a tea mix, instead of another milk flavor also weighed in their favor with the buyers at Walmart.
“We were one of four or five products trying to make the cut in this category and we got the word in November. Then we had to go through the new supplier registration process but that went smoothly.” he said.
Fleming said they then pitched the product at Open Call, but the main buyer Charles Greenhouse was on vacation.
“We met with his boss and a few others who were receptive to the product and they urged us to follow up with the buyer in the following weeks, which we did,” Fleming said.
He said the buyer recommended a minor tweak in the labeling which was easy to do and made a difference in shelf presentation. Fleming said the one stickler area that took the most work was getting the price down to Walmart’s level.
“I wasn’t sure that we could do it. But we went back to our suppliers three times and we finally got the cost down to the range Walmart wanted. The fact that this is a tea base and not a milk base, the cost structure is much lower and those savings can be passed on the consumer,” Fleming said.
He is still amazed a tiny company like Glucose Health can submit an application for Open Call and then have their product fully evaluated and accepted to share shelf space with the likes of Glucerna, owned by pharma giant Abbott Labs and Boost, a product of Nestle.
Cindi Marsiglio, lead for Walmart’s U.S. Manufacturing initiative, recently told Talk Business & Politics that Walmart merchants (buyers) are engaged in seeking new products made in the U.S. because they see the benefits of shorter supply chains. The distance from the Glucose Health production site is just 10 miles from Bentonville and the lab already does compounding and manufacturing of supplement products – such as Happy Joints – which are already sold at Walmart.
Fleming said Glucose Health has plans to market their new product in select stores over the Memorial Day Weekend. He said they also want to take part in health fairs and other wellness initiatives offered by the retailer. He knows just getting on the shelf is half the battle, the product will need to sell well if it’s going to be given full distribution in all 4,500 stores.
“I have spent a lot of time scoping out the diabetic aisles in grocers and pharmacies around the country in the past two years and I have been impressed with the selection that Walmart has for (over the counter) products for this growing population of consumers. It’s also well-marked with signage so consumers can find it more easily. Walmart is ahead of others in that regard and we can’t wait to get on the shelf in the next few weeks,” Fleming said.