Are personalized vitamins the future of wellness?

If you’ve ever been confused about what vitamins can do for you and which vitamins you should be taking, Walter Faulstroh and Brad Helfand can relate; they were once baffled consumers, too. They’ve since learned a lot about vitamins and are now CEOs of vitamin companies—HUM Nutrition and Vous Vitamin, respectively—that offer consumers personalized products and advice. In this episode of the McKinsey on Consumer and Retail podcast, they speak with McKinsey’s Monica Toriello and Sandra Welchering about personalization and other major trends in consumer health and wellness. The following is an edited transcript of the conversation. Subscribe to the podcast.

Monica Toriello: One of the big trends in consumer products today is personalization. If a company can use data to accurately tell you, “Here’s a product that you want or that is right for you” or “Now is the time for you to buy this product,” that’s going to be an increasingly big competitive advantage for the company. This might be especially true in consumer health and wellness, which is a $1.5 trillion market growing at 5 to 10 percent each year, as a recent McKinsey report has said.

Personalization is now becoming a differentiator in vitamins and supplements, which is one category within consumer health and wellness. Today we’ll hear from the CEOs of two innovative vitamin companies: Walter Faulstroh of HUM Nutrition and Brad Helfand of Vous Vitamin. In separate interviews, Walter and Brad spoke with me and with McKinsey associate partner Sandra Welchering, who is based in Berlin and is one of the leaders of McKinsey’s work in consumer health and wellness.

Before we hear from the CEOs, Sandra, you’ve studied the consumer health landscape, and there are lots of start-ups. Why were HUM Nutrition and Vous Vitamin interesting to you? Why did you decide these two were worth learning more about?

Sandra Welchering: It’s exactly the point you mentioned in your introduction: the personalization aspect. We’ve seen, in our “future of wellness” research, that personalization is a big topic for consumers across the world, and consumers are increasingly willing to share data so long as they see a benefit. That’s why I’m excited to talk to Brad about Vous Vitamin’s approach to personalized vitamins. We also found that consumers are increasingly looking for products that have natural ingredients. HUM Nutrition is really focusing on that. It’s also focusing on sustainable packaging design. Those two trends have become increasingly significant in the consumer health and wellness space, so that’s a reason I’m excited to talk to Walter about HUM Nutrition.

Consumers who became CEOs

Monica Toriello: Let me say a little bit about HUM and Vous. HUM Nutrition is a Los Angeles–based company that, according to its website, offers “clinically proven nutrients personalized to your goals.” You may have seen its products on the shelves of Sephora, Nordstrom, or other retailers; they’re also available on Amazon. The products have colorful packaging and cheeky names like “Flatter Me,” which is a vitamin for healthy digestion and a flatter stomach, and “Gut Instinct,” a vitamin for gut health. On HUM’s website, you can take an online quiz to get personalized recommendations from one of HUM’s nutritionists, whom you can then contact anytime.

Vous Vitamin takes a somewhat different approach to personalized vitamins. Vous, which in French is the plural or formal “you,” is a Chicago-based company that offers an all-in-one custom pill. So it’s not a customized combination of pills; it’s a customized pill. Vous also has an online quiz that asks you your age, body type, lifestyle, et cetera. Based on the results of your quiz, the company can make a pill—which you take twice a day—that contains all the vitamins you need.

One thing that Walter and Brad have in common is that they each had a personal experience that made them huge believers in their respective company’s mission. Let’s hear them briefly tell their personal stories. First, here’s Walter Faulstroh talking about why he founded HUM Nutrition.

Walter Faulstroh: Basically, I struggled with acne throughout my entire adulthood. For those of you who haven’t dealt with acne, I will tell you that it’s extremely painful. It’s emotionally scarring, too. Your confidence is not great when you have these deep breakouts. They’re also painful to touch. They really prevented me from being comfortable and in sync with my skin and feeling good about myself.

I had launched a company in the UK called V Water and partnered with a very forward-thinking nutritionist who wrote a book about the importance of gut health and its connection to mental health and the skin’s well-being. We partnered with her on a formula. She also helped me figure out my skin through changes in my diet, so there was a huge educational aspect.

I suddenly saw results by just having a healthy diet and including certain supplements and nutrients in my diet! When I saw these results, my confidence went up. My skin improved, of course, but my energy was also higher. I thought, “You know what? Maybe there are other people like me out there who could benefit from an expert-curated approach to skin health from within.” That’s how the idea of HUM was born.

Monica Toriello: And here’s Brad Helfand on how he ended up at Vous Vitamin.

Brad Helfand: My story mirrors that of so many consumers out there. I was the quintessential lost vitamin shopper, overwhelmed in the vitamin aisles. I went to my primary-care physician four years ago for an annual checkup, and he told me, “Brad, go get vitamin D and melatonin.” I had never taken vitamins as an adult. I walked the aisles at my local pharmacy and couldn’t remember the dosage of vitamin D he wanted me to take and whether I should be taking a multivitamin or an iron supplement because I’m a vegetarian. I just didn’t know how to do it myself in those aisles.

So I started a research journey. I have 20 years in the healthcare industry, and I’ve been a longtime healthcare consultant. It shocked me how unnavigated the vitamin industry was. Through my research, I found out that there was a company in Chicago where one of the founders happened to be my wife’s primary-care physician. When I got to know her and her cofounder and the mission that they had started—to customize all-in-one supplements using data and data science—it invigorated me because so much of what I’ve seen in healthcare is a move from volume to value, and what they were doing represented a new value-based play in the industry.

I see myself as more than a simple classification: say, a man buying a men’s multivitamin. I know that there’s the capability to do better. So when I met two experts who were committed to that cause, it motivated me to take it seriously and reflect, “Is this the future of vitamins?” In my mind, yes, it was.

Who’s buying vitamins—and where?

Monica Toriello: These companies both play in the vitamin and supplement space, but their customer base is very different. Here’s Walter describing HUM Nutrition’s customers.

Walter Faulstroh: Given that we did this all online, we obviously collect data, and we understand who our user base is. Who is the HUM customer? I would say millennials and Gen Z. That’s really our core demographic. The majority of our customers are women. That was a big surprise to me—to see how much of a gender split there is. But I understand now that, especially in the US, the decision makers around health and well-being in many households are women.

The gender split, I would say, is 90/10—90 percent female and 10 percent male. But that’s who our customers are; it doesn’t mean necessarily that they’re just buying for themselves. A lot of them make decisions for the whole household, so they may purchase for a partner, who may be a man.

Monica Toriello: And here’s Brad talking about Vous Vitamin’s core customers.

Brad Helfand: When we launched, in 2014, we thought this was certainly going to be a millennial company; millennials were going to be interested in personalized vitamins. Today, what we’ve learned is that many of our customers are Gen X and baby boomers. Our core customer tends to be a 35-plus consumer.

Older consumers may have other chronic conditions. They don’t want handfuls of vitamins. The “pill pack” idea—swallowing eight, nine, ten pills and powders a day of different shapes and sizes—does not necessarily appeal to that customer. The older demographics are also very value conscious. For many of those consumers, the idea of personalization at a one-dollar-a-day price point is preferable to a service that might be recommending a number of pills that end up costing $100 to $250 a month. Part of our value proposition is reducing the number of pills and powders they take every day and lowering cost in the category.

Monica Toriello: Both HUM Nutrition and Vous Vitamin have seen strong growth. Walter said HUM’s revenues passed the $50 million mark in 2021. Brad said Vous Vitamin has digitally assessed more than 100,000 consumers and has seen triple-digit growth over the past two years. For both companies, online subscriptions make up the bulk of their sales, but both companies now also have a presence in brick-and-mortar retail. Here’s Walter talking about how HUM Nutrition thinks about its sales channels.

Walter Faulstroh: We said, “Look, either we can build this ourselves from scratch or we can think much more about community and other ways of getting in front of the consumer.” That is why we looked for a retail partner that could help us amplify our message and educate our audience base. About two years into the business, we partnered with Sephora, which has been an incredible partner and helped us educate the consumer as well. We partnered with them because they’re a company that prioritizes education just as much as we do. Obviously, they have a very strong focus on beauty, and there weren’t many other vitamin offerings within that channel, so we had a lot of room to build the category together. That was one of the big changes we did that really benefited not just that one particular channel but also helped raise awareness across all touch points and helped us build the business faster than we could have by ourselves.

We decided to be very channel specific. On our website, we only offer subscriptions. On Amazon, we target a consumer who is either a Prime member or who isn’t as attached to a vitamin subscription. That’s the way we think about it: every channel has its purpose. Certain consumers want to buy your brand from their preferred retail partner, and you want to make sure you’re supporting that, as opposed to dictating where they should buy your product.

Monica Toriello: As for Vous Vitamin, you can’t buy their products off a store shelf, but you can order their personalized vitamins through in-store kiosks. Here’s how Brad describes it.

Brad Helfand: We just executed a partnership with the largest provider of in-store digital retail kiosks in the United States. These are health hubs that can be found in pharmacies and grocery stores. A large pharmacy chain on the East Coast used those in-store digital kiosks to launch our personalized vitamin program, allowing consumers to walk up to a kiosk near the pharmacy, launch our survey, find out their personalized results, and order that personalized vitamin subscription program through their home retailer. For the retailer, that’s an exciting proposition because it allows the retailer to keep those consumers in its ecosystem long term and manage the consumers in an active way.

The eco-conscious consumer

Monica Toriello: Brad and Walter then talked about sustainability, which, Sandra, as you said earlier, is one of the biggest trends in consumer health and wellness. Here’s your question to Brad.

Sandra Welchering: By combining vitamins into one pill, you’re obviously reducing waste. We found that consumers are increasingly looking for natural ingredients, which goes along with the whole sustainability trend. Would you say you’re focusing on the topic of sustainability more?

Brad Helfand: We certainly see the rise of the eco-conscious consumer, and we see them being very vocal, both to our company and other companies in the space. I can’t tell you how many social-media ads I’ve seen in our category where consumers question, “Do I really need all that packaging? Do I need to tear open packets daily and dispose of those every day? Do you offer recyclable materials in your packaging?”

What I also found interesting was that in your research—Sandra, I read “How to thrive in the global wellness market,” from January 2022—you talk about how, within dietary supplements, 40 percent of consumers globally would prefer a more natural product over a more effective product. Only 20 percent would choose a more effective product. What that tells me is that consumers really want to know what you’re doing to reduce fillers, unnatural ingredients, and genetically modified organisms, and whether your manufacturing is safe and transparent. Are you working with good manufacturing practices and certified facilities? Are they pharmaceutical-grade facilities?

Those are all questions that we try to answer for consumers. And we constantly try to get better. For example, many of our consumers have talked about their dislike of synthetic dyes. Our next-generation products are going to feature natural dyes in response to that. We’re constantly thinking about how to improve the product to meet the needs of the eco-conscious consumer.

Monica Toriello: And here’s what Walter had to say on the topic of sustainability.

Walter Faulstroh: Another big trend that we’re seeing is sustainability, and this is obviously driven by the reality of global warming and growing plastic pollution. Plastic pollution is a huge problem for the planet. Every year, millions of tons of plastic end up in the ocean, for example. While consumers are not realizing yet how big that problem is, it’s going to be a huge problem. So I do think sustainability will have a big impact.

That means packaging innovation, for example. How you address this plastic problem with your packaging is going to be key for companies to think through. In our case, we decided to use Prevented Ocean Plastic, which is a great material because it takes already-produced plastic out of the environment. It’s plastic that has been collected around the world in at-risk communities—coastal communities—and provides a living to communities around the world through recycling. You take that plastic and upcycle it into your own bottles, which then can be recycled over and over again. So that’s one of those things that we think is a big, big trend going forward.

Another trend is plant-based eating, again in association with global warming. I do think—as you mentioned, Sandra—natural ingredients are going to be key, and clean ingredients and plant-based ingredients will have a really big moment because of the context and the challenges we are facing right now.

Lessons learned

Sandra Welchering: What do you know today that you wish you had known when you started your business as an innovator?

Brad Helfand: One thing that I wish I’d known earlier is the value of combining visionaries and muscle in the market. We gravitated toward building an offering around visionaries, but we’ve seen our competitors have a lot of muscle. And we know that it takes a combination of capital, innovation, and market reach to grow these offerings. Had we affiliated with that muscle piece earlier in our journey, we might have, at this point, been the top-known brand in personalized vitamins. Today we’re certainly still an emerging brand in the category.

From a personal perspective, one thing I wish I’d known is the humility involved in starting a company on the bleeding edge of a trend and how much patience it takes to wait for the market to catch up to you. When we started, a small fraction of consumers were getting their vitamins through e-commerce and through subscription models. It’s definitely accelerated in the last two years, but we’ve been encouraging that direction in the market since 2014. Sometimes you just have to wait for the market to play catch-up, and that requires a certain degree of both patience and humility.

Monica Toriello: Here’s Walter’s response to your question, Sandra, about a lesson learned. His answer reflects the moment we are in—this unique time in the business world and in history that we’re all going through.

Walter Faulstroh: I didn’t know that building a brand will include speaking to big moments that happen in society. What I didn’t anticipate were all these things that are completely outside of health and wellness but have an impact on our business—and having to navigate those. That’s something that has been really interesting over the past few years.

Take the pandemic itself: the pandemic hits, and our entire company is suddenly all working from home, which has a huge impact on the mental health and well-being of individuals who have collective anxieties that we didn’t think we would need to address. I wouldn’t have been able to go through all that without the help of great coaches and our team, who have great ideas. That was a moment that really brought to life how uncertain life is and how quickly things change. Having the agility to navigate those moments successfully is definitely something that I didn’t anticipate when I started HUM.

The future of consumer health and wellness

Monica Toriello: Finally, we asked Walter and Brad to predict what’s next in consumer health and wellness.

Sandra Welchering: How do you see the market evolving over the next ten years or so? Paint a picture of the vitamin market in 2030. Where do you see it going?

Walter Faulstroh: I think health and fitness is definitely a huge opportunity for us. We have seen a huge correlation between our consumer and the fitness consumer. It makes sense: if you have a well-established fitness routine, I think you’re also better at taking your vitamins because you incorporate those into your daily journey. That alone provides a huge opportunity for the brand, and we’re looking into that right now.

I would say that mental wellness is going to be a big topic. Why do I say this? Social media has had a big impact on people’s emotional and mental well-being. I think people’s attention spans are shrinking as well, so cognitive performance is another area in which there will be a lot of innovation.

Here’s something very interesting as well: currently, 97 percent of health spending is postdisease. Healthcare in the developed world, in general, is all about treatment. Only 3 percent is spent on prevention. So I think what will really change the industry is a shift in focus from treatment to prevention. Ultimately, that’s where the big shift will happen, once the mindset of consumers moves more toward prevention.

Brad Helfand: In the next ten years or so, I think many consumers will abandon the mass market and that transactional marketplace where they buy a bottle and have no relationship with the company. They’ll move into more longitudinal, data-based relationships with companies like ours. We’re going to see a lot of convergence between supplements and adjacent industries, like beauty, skin care, hair care, fitness, telehealth, food, meal kits, and cannabis. You’ll see supplements start to bleed over into a number of other categories. And you’ll see us trying to find ways to meet the consumer where they are or where their brand loyalties lie.

I think we’ll be seeing a lot more focus on wrap-around solutions to manage the post-transaction journey of a vitamin taker, which, again, lasts many years. You’ll see the introduction of wearables, better apps, ongoing education streams, and content communities. I think all of that is needed to be supportive of a consumer who needs to stick with it over time in order for it to be effective.

Monica Toriello: So if Walter’s and Brad’s predictions come true, in the future, we’ll see a blurring of the lines between the many categories of health and wellness; we’ll see a shift in focus from treatment to prevention; and technology, including apps and wearables, will play a bigger role in helping us stay healthy. That’s the end of our episode. For more on health and wellness, please visit mckinsey.com/consumerhealth. Join us again next time.