Herbal products have grown in popularity with consumers over the past ten years. The herbal products industry exceeded $4.3 billion in sales last year. Where once a customer would have to go to a speciality shop to purchase herbal products, now those same products are available at the local supermarket. The demand has created a cottage industry of supplying herbal products to companies who then market these products under their own brand name.
Currently, the industry can be divided into two segments:
Gentle Touch Creations will focus on two target companies:
Herbal health products dominate sales but herbal beauty products have been growing in popularity each year.
There are 10,000 herbal health product companies that are competing for market share among consumers. Most of these companies are regionally focused but 15% of these companies distribute their products nationally. This is compared to only 2,000 herbal beauty product companies. Most of these companies also only compete regionally though there are a handful (4%) that dominate the national market. As sales grow in herbal beauty product, more new companies will enter the marketplace.
Gentle Touch Products will focus on the small companies serving the East Coast regional market. Many of these smaller companies aggressively seek out new products that they can add to their product line. The cost of manufacturing all these items themselves is prohibitive so they contract with third party vendors to supply product.
As the herbal market has grown into a multi-billion dollar industry, so has the opportunity for small firms and farms to supply product to larger herbal companies that then repackage and market the product under their own brand. The size of these suppliers can range to a one-person operation to a small farm that can have 20 or more employees.
As the larger and second tier companies face off to win greater market share, they are constantly looking for additional product items that will improve their advantage in the marketplace. Routinely, a product like an herbal therapy pack, is an attractive cost efficient addition to a product line.
Quality and timeliness are the essential factors in being successful as a supplier to an herbal product company. This is especially true when the product is re-packaged as part of a gift basket. A delay in delivery will impact the company's ability to meet delivery deadlines.
Quality is also an important factor because word of mouth is one of the strongest marketing tools with herbal products. The local success of an herbal product many times leads to a larger company procuring the product for their line.
Joanne Lovejoy has sold her herbal products at craft fairs in the region for the past five years. The popularity and customer satisfaction of these products was an important selling point when WindWalker Products first approached Joanne about her herbal therapy packs.