Supplement Industry Still Has A “Pink Tax” Problem
Did you know that 51% of Americans are unaware they’re paying a tax that costs them on average ~$1,300 annually? Are you curious if this tax is impacting you? Answer the following questions:
Are you a female?
Do you buy goods and services?
If you answered “Yes” to both questions, you are indeed paying what is referred to as the pink tax…
What is the Pink Tax?
The pink tax officially dates back to 1994, when a governmental report from the State of California found that the majority of stores in five major cities charged more to wash and dry clean a woman's blouse than they did a man's button-up shirt. Simply put, the pink tax refers to the extra amount of money women pay for specific (usually identical) products or services. Pink tax products commonly use specific characteristics (e.g. colorful packaging) to try to appeal to women. In economics, you’ll hear it described as gender-specific pricing or gender-based price discrimination.
Is Price Discrimination Bad?
The word “discrimination” has quite the negative connotation. Grouping price discrimination into that “avoid at all costs bucket” is natural, but this pricing strategy essentially means charging different customers different prices…
introductory offers
age-specific pricing
coupons
quantity discounts
As you can see from those examples, price discrimination doesn’t typically refer to something illegal or derogatory…and in most cases it can actually increase consumer welfare.
Is Marketing to Blame?
When there is no difference between the male and the female versions, apart from a meaningless feature, how can it be fair to charge different prices?
The classic example used is with those cheap single blade razors…
Men’s Version = Blue
Women’s Version = Pink
Despite the only difference being color, the women’s version is almost always more expensive than the men’s product.
So why does price discrimination get accepted by the market?
I love the cheap razor example, but it can sometimes feel like an outlying data point. The problem with it is that we don’t live in a binary “blue” and “pink” world. Because of countless different features/components, comparing gender-specific goods and services usually ends up looking more like different shades of purple. It’s also doesn’t help that marketing strategies make consumers feel that they need to buy gender-specific products when gender-neutral or men’s products would be sufficient.
Bigger Problem than the pink tax
“Pink It and Shrink It…”
This is a business strategy that takes an existing product (especially one for men) and simply makes it smaller and pink. In the supplement industry, it refers to:
watered down formulas
pink packaging
I was introduced to this concept when I worked at MusclePharm in the early 2010s. At the time, we were developing the female version of MusclePharm (called FitMiss). As a mid-20s MBA grad trying to make a splash inside a new industry, I hadn’t considered that there was a negative side to…
Improving overall supply side economies of scale by basically creating watered down smaller servings per container MusclePharm products
Pricing FitMiss products at (or above) comparable MusclePharm products
It was financially prudent, but it was also only considered efficiency instead of fairness.
Pinkwashing Pre-Workouts
The supplement industry is unfortunately full of “pink it and shrink it” type examples. Even without sharing more stories, just consider the fact that you’re mixing a group of arguably the most opportunistic marketers with an underserved but growing segment of the market (aka females).
While no statistically valid studies have come out (at least to my knowledge) covering the prevalence of the “pink tax” within the supplement industry, I did perform a rough analysis three years ago with pre-workout products sold on Amazon. I found that the top 10 female-marketed pre-workout products on Amazon were priced 9.5% higher than the top 10 gender-neutral or men’s pre-workout products.
Final Thoughts
After reading California had joined New York in passing a bill to ban the “pink tax” this week, it got me thinking about if things had improved with Amazon pre-workouts…
Again, I’m fully aware that this rough analysis has more holes in it than a slice of Swiss cheese…
the servings per container are all over the place
product ingredients are wildly different
If anything, my hope for taking time to compile an updated version was to visually show what I think most in tune professionals can feel…we still have a lot of work left to push towards gender equity/equality in the supplement industry.