GWI, based in La Mirada, CA, released its review of 2013 prices with a look forward toward the rest of 2014. Within the usual noise of some prices up here, others declining there is the unmistakeable effect the ever increasing popularity of pre workout supplements has had in the ingredient market, said GWI CEO Jim Schultz.
“The whole supplements industry is just booming,” Schultz told NutraIngredients-USA. “It’s a great business to be in because of all the Baby Boomers but also the young kids are really taking an interest in health. In particular, the whole pre workout thing is very popular.”
Market differentiation
Schultz said the increasing variety of sports nutrition products is having an affect in the market. From simple protein powders the market has differentiated into a dizzying array of prodcuts, including pre workout supplements, products aimed at recover and hydration, products that advertise maximum muscle growth, etc.
“That has been interesting. It shows the market segmentation. You used to have just sports nutrition but now all these other products,” Schultz said.
Instant grade branched chain amino acids (BCAAs) is one of the ingredients that GWI forecast would see increasing price pressure in 2014. This ingredient is found in many pre workout and recovery sports nutrition products, most often as a part of a drink mix. The ability of this ingredient to dissolve quickly is one of the big selling points, Schultz said. GWI predicts that the ingredient will recover from a price dip in 2013 brought on by Chinese oversupply, a situation not likely to last given the rising sales in the sector and a steady drumbeat of new product launches. “The price will recover during Q1 2014 and rise steadily. Supply might get tight,” the report said.
Possible new market entrants
Choline DL-Bitartrate, an ingredient said to increase endurance, was another ingredient whose price was forecast to rise by GWI. The choline market was active in 2013 and supplies tightened in the latter part of the year and prices continued to rise. GWI’s forecast foresees prices and demand continuing to rise in early 2014, but speculates that later in 2014 the price/demand opportunity could bring new manufacturers into the market, changing the picture.
More modest price rises were forecast for l-glutamine FCC, L-isoleucine USP and L-Valine.
One ingredient whose price was forecast to rise was good old vitamin C, in the form of ascorbic acid. The price of this ingredient was slowly recovering from a low point it occupied for most of the previous two years, the report said. The price rise could be because some manufacturers were cutting losses by only manufacturing enough of the ingredient to satisfy their major accounts, thus artificially restricting supply. GWI report says that prices rose as much as 20% in the latter part of 2013 (albeit from a low base) and that increases are expected to continue into 2014.
Several ingredients popular in sports nutrition were expected to remain stable in 2014, the report said. Among these are Acetyl L-Carnitine HCL, Taurine and Creatine Monohydrate. Even though there is strong demand for these ingredients, supply is abundant too, the report said.