Supplements should position to counter health crisis, says NBJ
experiencing accelerated growth, formulators will have to be
strategic and lure the remaining 65 percent of the population who
do not take supplements, according to the Nutrition Business
Journal (NBJ).
In its 2006 Supplement Business Report, NBJ cites the industry has doubled over the past decade - and in 2005, consumer sales of supplements grew 4.5 percent to $21.3bn, representing almost one third of the global $66bn market.
While American consumers have been using supplements for decades, said the market researcher and publisher, it is only since 2000 that the US industry has demonstrated signs it is maturing.
To avert market saturation, dietary supplement manufacturers should position themselves as a potential factor in alleviating what is a mounting health crisis in the US, it suggests.
"While the US supplement industry has grown from $11 billion in sales in 1995 to more than $22 billion in 2006, it is unlikely to double again in the next decade," said Grant Ferrier, the report's principal author.
The report characterizes the US supplement industry as being affected by declining growth, price pressures, commoditization of many products and intensifying competition. In addition, a skeptical media and flat sales in the mass-market contribute to a sense that health-motivated customers may be approaching market saturation.
Nevertheless, the market researcher forecasts growth in the supplement industry at a four to five percent compound annual growth rate between 2007 and 2012, when sales are expected to exceed $29bn.
At present, only 35 percent of the population purchases 80 percent of supplements sold, leaving significant potential for nutraceutical marketers.
"…The potential for much higher growth remains very large," said Ferrier. "But each successive layer of the population is increasingly more difficult to convert into regular consumers...."
Health conditions, such as obesity and heart disease, are placing a burden on a healthcare system that is at the same time witnessing a rise in the percentage of Americans who cannot afford health insurance.
In 2005, 46.6mn Americans did not have health insurance, up from 41.2mn in 2001, according to the US Census Bureau.
"With healthcare likely to remain as one of the critical issues facing America in the next ten years, supplement companies are well advised to cast themselves as part of the solution," said Ferrier.
Supplement formulators and manufacturers will not experience a second wave of twofold growth unless they address these healthcare issues directly, according Ferrier.
"The business is more challenging and competitive," said Ferrier, "and unless the industry makes a more concerted effort at investment in science, marketing, consumer education and interaction with practitioners, insurers, HMOs, policymakers and others in the healthcare industry, such a scenario is unlikely to occur."
Specialty supplements that have been boosted by scientific literature and marketing - such as fish oil, probiotics and digestive enzymes - saw the strongest growth in 2005, at over 13 percent.
Vitamins, which comprise 34 percent of the supplement market, grew less than four percent in the same year. Positive trends in multivitamin direct network marketing sales were dampened by a downturn in vitamin E sales.
