Hormel, Novartis push supplements to HMEs

Friday, May 31, 2002

Both companies made first trips to Medtrade Spring, beefed up staffs
AUSTIN, Minn. - The company that made SPAM famous, Hormel, and the Minneapolis-based Novartis have begun an unprecedented push to market their nutritional supplements to HMEs.

Both companies made their first-ever appearances at Medtrade Spring in April and have beefed up their sales and marketing staffs recently. Why? They say outside of hospitals and nursing homes, there's no more appropriate place for nutritional supplements like Hormel's FiberBasics and Novartis' FiberSource than HMEs.

"It's really the only outlet outside of an institution," said Caroline Osborne, one of two corporate accounts managers hired recently to market Novartis' line to HMEs. "Chain stores like Wal-Mart will sell some but not much, especially not the high-tech products and equipment."

In addition to beefing up its staff, Osborne said Novartis recently trained existing sales representatives in homecare-specific marketing strategies such as how to co-market with referral sources. Where HMEs were once the company's third focus (behind hospitals and nursing homes), this year, it's No. 1, she said.

On its part, Hormel recently signed on Scott Oesterle and gave him the title director of sales for home health care. The company's also made a series of acquisitions in the past few years, such as the acquisition last year of Diamond Crystal Brand's nutritional supplement line, that have confirmed its dedication to the nutrition business.

"We didn't have anyone focusing on this area of sales until me this year," Oesterle said.
Osborne and Oesterle said HMEs are a good place for nutritional supplements because consumers often drop into HMEs for equipment associated with enteral feeding like catheters and pumps, anyway. So why not pick up nutritional supplements, which are often suspended and used for enteral feeding, there, too? Most nutritional supplements are cash sales to boot.

"The baby boomers are the wealthiest generation in history," Oesterle said. "As they age, they're going to have the money to spend on health care."

Even without enteral feeding, for health-conscious consumers, nutritional supplement lines that cater to diabetes or help improve your diet, for instance, are head turners.

Moreover, Oesterle said the nutritional supplement market's ripe for HMEs to pick. He said in 2000, nutritional supplements garnered $439 million in sales, up 13% from 1997. More specifically, he said sugar substitutes garnered $250 million in sales, up more than 5%; and protein supplements garnered $14 million, up 180%.

Osborne and Oesterle said there is one problem: For the few nutritional products and equipment that Medicare and Medicaid covers, the reimbursement is low.

"Ninety percent of DMEs carry enteral products, and a lot are choosing to get out," Osborne said. "We have a nurse that travels the country showing how they can improve billing and reimbursement."

Hormel and Novartis join heavyweights such as Abbott Park, Ill.-based Ross Medical and Glendale, Calif.-based Nestle (a brand many Apria stores carry) in marketing their nutritional supplements to HMEs. Both companies plan to attend Medtrade in October to continue their push, Osborne and Oesterle said. HME