Healthcare reform, an aging population and growth in the number and variety of dietary supplements offered will boost revenue for the Vitamin and Supplement Manufacturing industry at an average rate of 4.5% annually to $34.7 billion in the five years to 2016, according to IBISWorld, publisher of industry research.
In 2011 and 2012, revenue is forecast to increase 3.9% to $27.9 billion and 5% to $29.2 billion, respectively, which is a reflection of a growing economy, improved consumer sentiment and the associated rise in spending on industry products.
Although sales in the Vitamin and Supplement manufacturing industry declined during the recession, the rise in unemployment resulted in lost health insurance coverage for many individuals during 2008 and 2009. In turn, reduced coverage caused out-of-pocket healthcare costs to increase and encouraged consumers to seek out preventive care products, such as vitamins and other nutritional supplements, which are generally cheaper than traditional healthcare.
According to IBISWorld analyst, Nima Samadi, the number of industry establishments in the Vitamin and Supplement Manufacturing industry is expected to grow at a rate of 1.2% per year to 1832 over the five years to 2011 as companies expand in response to the steady rise in demand for industry products. “Imports are also expected to grow over the period at an average annual rate of 3.9% to $5.7 billion as both retailers and domestic vitamin and supplement manufacturing companies look for ways to cut costs by sourcing and manufacturing abroad.”
Although growing competition from cheaper imports will pressure the prices industry operators charge for health products, healthcare reform, an aging population, and favorable attitudes toward health are anticipated to continue boosting demand for vitamins and supplements. Healthcare reform will likely encourage the use of preventive care and alternative medicine, in turn, driving demand for vitamins and dietary supplements. “Through 2016, revenue is forecast to increase at an average rate of 4.5% annually to $34.7 billion,” said Samadi.