The Supplement Markets In The U.S. And Europe
Differences abound on the two continents.
By Joerg Gruenwald
The global supplement market for 1999 has been evaluated to be U.S.$46 billion at the retail level. We have based this number on objective data where hard figures are available and on our own research of the industry to round out the picture. We define the supplement market as a group of products containing vitamins, minerals, herbals, homoeopathics and other natural compounds taken in the form of a supplement unrelated to their normal legal status. Table 1 indicates that the group of herbal and homeopathic products is leading at $19.4 billion in sales, followed by the vitamin and mineral category with $17.8 billion and the sports/specialty supplements category with $ 8.8 billion.
North America is the leading continent with total sales of approximately $14.4 billion, followed by Europe with $12.3 billion, Asia with $7.6 billion, Japan with $7.1 billion and the rest of the world with $4.4 billion. The herbal category is the strongest in Asia and Europe, while vitamins and minerals are the strongest category in Japan and North America.
The growth rate of the herbal category in North America was of special interest during recent years, with very strong growth from 1994 to 1998. This trend has slowed and overall growth of the herbal category is on the same level as vitamin and mineral growth at approximately 7-8% annually.
The major differences in the supplement category between the two leading continents, Europe and North America, are not only the supplements sold but also the distribution channels. The pharmacy plays a major distribution role in Europe, but it is the health food category with the strongest growth in the U.S. mass market. Multilevel marketing is also much stronger in the U.S. than in Europe, but the growth rate in this category has slowed down. The strongest growth, on a low level, is expected in international mail order and Internet sales. There are differences in the way these distribution channels developed in Europe and in the U.S. In North America, the mass market channel shows the strongest growth. In Europe the strongest growth is found in a mixture of health food and specialty shops outside of the pharmacy and partially also in the mass market segment.
Legal And Regulatory Differences
The legal status of supplements has still not been harmonized in Europe. While herbal products are seen as drugs in several countries such as Germany, France and Scandinavia, the same products are freely available in the U.K. or The Netherlands. In North America there are still differences in the regulations between the U.S. and Canada, but they are not as large as those found in Europe. Regulations for vitamins and minerals are still different between various European member states. A recent directive indicates that a more liberal approach to higher dosages for vitamins and minerals can be expected for the whole of Europe. At the moment there are still countries that limit the dosages of those products to three times RDA levels, while the new EU directive is based on the upper safety limits, which is the U.S. approach.
Internationally, the supplement category is rather diversified, with only a few major players and leading brands—such as “Centrum” or “One-A-Day”—available worldwide. Most products have only national or regional distribution, even though the ingredients are almost identical in all major markets. Strong consolidation can be expected in the future and international regulations will permit easier distribution of products worldwide.