Joe Marra09.01.04
Despite years of bad press concerning safety, efficacy and false label claims, the outlook for dietary supplements is brighter today than it has been for at least five years. At the end of 2002, the good news was that supplement sales had ceased their hemorrhaging of the late 20th century, and were flat compared to the prior year. Today, while overall supplement industry sales are showing very modest gains, there are sectors of the market that are growing vigorously. Supplement opportunities abound in certain classes of supplements, in certain channels and among certain consumer groups, and societal health trends offer evidence that supplements may be poised for a new period of growth.
Research conducted by The Natural Marketing Institute (NMI), Harleysville, PA, shows that there is a general recognition among consumers that people are not as healthy today as they once were, and also that they are not as healthy as they ought to be. Americans by now are well aware of the twin epidemics of obesity and diabetes, which have been discussed at length by government agencies and broadcast in all media. Food manufacturers and fast food chains have reformulated products and reduced portion sizes in an attempt to blunt criticism and offer healthier, less fattening foods.
According to NMI's Health & Wellness Trends Database (HWTD), two-thirds of Americans believe that "vitamins and minerals are effective in preventing certain health conditions." In addition, 57% of Americans state that vitamins and minerals are extremely or very important to how they maintain their health, a rate that has remained constant over the last five years. These beliefs, coupled with the knowledge of rampant health issues, have led consumers to a metamorphosis in attitudes toward and usage of supplements. This also reveals that the mainstay supplements, such as multivitamins, calcium and vitamin C, should not be expected to see huge growth; neither should they experience significant declines in the near term. They will likely remain at or near current levels of household penetration and adjusted sales, as they are perceived as generally good for overall health. However, supplements with condition-specificity appear to be the next growth sector in the dietary supplement marketplace.
As shown in Table 1, usage of vitamins, minerals, weight loss products, and homeopathic remedies has remained fairly constant over the previous five-year period, while herbal supplement usage has declined by 5%. The only growth area among these supplement categories was seen in condition-specific supplements, which grew by over 9% on a four-year, compounded annual basis. These specialty supplements include items such as glucosamine (specific to joint issues) and essential fatty acids (specific to heart issues).
Americans appear to believe that they are not especially healthy. In fact, a large percentage of consumers report that they are ailing with some type of health issue. The number one health issue, reported by 40% of Americans, is the need to lose weight for reasons of appearance. This fact has given rise to entire industries, as Americans attempt to lose weight. The current obsession with low-carb dieting is one example in a long list of diets and methods employed by weight-conscious consumers.
Managing weight is followed by many other health issues, some of which are life threatening (cancer, heart disease), and some of which are less serious (stress, lack of energy). Table 2 shows selected health issues and the rates of treatment/management in the general population in 2003 and in 1999. Incidence levels of most of these issues have remained fairly constant over time; however, note that the incidence of diabetes has increased by a compound annual rate of over 11%, which is consistent with figures recently released by the Centers for Disease Control and Prevention (CDC), Washington, D.C.
Two facts are notable in Table 2. First, at least one-fourth of consumers report that they are actively treating the various conditions of arthritis, stress, vision problems and lack of energy. This represents a sizable market of roughly 53 million American adults for each condition. And second, there are supplement products or ingredients which have specific application to all four of these conditions, without mentioning the many other condition-specific ingredients that have relevance for other, less prevalent conditions, such as osteoporosis, which still has 23 million active managers.
While the number of active condition treaters is revealing of condition-specific supplement opportunities, perhaps even more indicative is the level of concern Americans report with preventing various conditions. NMI's research has consistently shown that consumers are disproportionately more concerned about preventing ailments as compared to the possibility that they might actually develop that ailment. For example, 66% of men say that they are concerned with preventing prostate cancer, but fewer than 5% of men actually have the condition. At least 75% of all consumers report that they are concerned with preventing several other serious conditions, such as high blood pressure, heart disease, high cholesterol, arthritis and vision problems, but the actual incidence levels of any of these conditions does not exceed 33%.
While Americans suffer from and worry about all of these health issues, they also demonstrate a willingness to treat these conditions with one form of product or another. For example, Table 3 shows usage rates of prescription drugs and over-the-counter (OTC) medicines.
Obviously, Americans are willing to take their medicine. However, note also the increase in use of OTC products, which may be indicative of an increased desire (or need) to self-treat. This could be due to an American streak of rugged individualism, but could also be the result of reduced medical insurance coverage, resulting in consumers being less willing or able to go to the doctor and/or afford prescription medicines. Whatever the cause, these factors are expected to lead to more openness and willingness of consumers to treat their ailments with supplements, especially those that are directly applicable to specific health conditions.
As mentioned previously, talk of low-carb lifestyles has been dominating the food and nutrition scene for the past year. But has it or will it affect the dietary supplement industry?
Weight management is one of the most important issues facing American consumers, with two-thirds (66%) of Americans reporting that they used some method to maintain or manage their weight in the past year, representing 138 million American adults. Twenty-four percent of consumers report having used a low-carb approach to weight loss in the past year, which translates to 50 million U.S. adults who in the past year have followed a low-carb diet. This also represents an increase of 38% versus the previous year, or an increase of almost 14 million additional low-carb weight managers. Low-carb weight management is likely to be more than a passing fad: the method has actually been known and written about for over 30 years, but built critical mass very slowly due to resistance among physicians and weight loss experts, and also due to its counterintuitive recommendations of consuming high fat foods along with protein, while shunning grain-based products and sugars.
As consumers have become more aware of and knowledgeable about low-carb diets, they have also learned about some of the other effects these diets may have, beyond weight loss. Halitosis aside, consumers are becoming more aware that shunning carbs may also result in deficiencies of various nutrients, which are found in the grain-based foods they no longer consume. For example, sales of B-complex vitamins appear to be increasing, which is most likely attributable to low-carb dieting.
Other trends expected to become more obvious in the next 12 months involve how supplement ingredients are delivered. As shown in Table 4, usage of fortified and functional foods has increased over the past five years, indicating that consumers are seeking to get their nutrients in other forms beyond pills.
In addition, new and unique supplement formats are expected to show vigorous growth. While tablets, capsules, and softgels are still the top three formats for these products, soft chews, fast dissolve tablets, and quick-dissolve strips are gaining consumer acceptance, which is leading to much new product development activity among major manufacturers.
Where consumers will buy their supplements is also evolving. Food stores, in both mainstream and natural channels, are showing aggressive and sustained growth in supplement sales, as time-pressed consumers seek a one-stop solution for all of their nutritional and wellness needs. And the top selling private label supplement brand is found in America's number one retail chain: Wal-Mart.
While it may seem a contrarian opinion at the moment, continued growth of health issues and concerns, consumer trends in weight loss, the need for self-treatment, and new product and ingredient applications and delivery systems are generating new opportunities for growth in the long-suffering dietary supplement industry.NW
About the author: Joe Marra is the executive director at the Natural Marketing Institute (NMI), Harleysville, PA. He can be reached at 215-513-7300; Fax: 215-513-1713; E-mail: joe@nmisolutions.com; Website: www.nmisolutions.com.
Research conducted by The Natural Marketing Institute (NMI), Harleysville, PA, shows that there is a general recognition among consumers that people are not as healthy today as they once were, and also that they are not as healthy as they ought to be. Americans by now are well aware of the twin epidemics of obesity and diabetes, which have been discussed at length by government agencies and broadcast in all media. Food manufacturers and fast food chains have reformulated products and reduced portion sizes in an attempt to blunt criticism and offer healthier, less fattening foods.
Top Supplement Categories
According to NMI's Health & Wellness Trends Database (HWTD), two-thirds of Americans believe that "vitamins and minerals are effective in preventing certain health conditions." In addition, 57% of Americans state that vitamins and minerals are extremely or very important to how they maintain their health, a rate that has remained constant over the last five years. These beliefs, coupled with the knowledge of rampant health issues, have led consumers to a metamorphosis in attitudes toward and usage of supplements. This also reveals that the mainstay supplements, such as multivitamins, calcium and vitamin C, should not be expected to see huge growth; neither should they experience significant declines in the near term. They will likely remain at or near current levels of household penetration and adjusted sales, as they are perceived as generally good for overall health. However, supplements with condition-specificity appear to be the next growth sector in the dietary supplement marketplace.
As shown in Table 1, usage of vitamins, minerals, weight loss products, and homeopathic remedies has remained fairly constant over the previous five-year period, while herbal supplement usage has declined by 5%. The only growth area among these supplement categories was seen in condition-specific supplements, which grew by over 9% on a four-year, compounded annual basis. These specialty supplements include items such as glucosamine (specific to joint issues) and essential fatty acids (specific to heart issues).
What's Ailing Consumers?
Americans appear to believe that they are not especially healthy. In fact, a large percentage of consumers report that they are ailing with some type of health issue. The number one health issue, reported by 40% of Americans, is the need to lose weight for reasons of appearance. This fact has given rise to entire industries, as Americans attempt to lose weight. The current obsession with low-carb dieting is one example in a long list of diets and methods employed by weight-conscious consumers.
Managing weight is followed by many other health issues, some of which are life threatening (cancer, heart disease), and some of which are less serious (stress, lack of energy). Table 2 shows selected health issues and the rates of treatment/management in the general population in 2003 and in 1999. Incidence levels of most of these issues have remained fairly constant over time; however, note that the incidence of diabetes has increased by a compound annual rate of over 11%, which is consistent with figures recently released by the Centers for Disease Control and Prevention (CDC), Washington, D.C.
Two facts are notable in Table 2. First, at least one-fourth of consumers report that they are actively treating the various conditions of arthritis, stress, vision problems and lack of energy. This represents a sizable market of roughly 53 million American adults for each condition. And second, there are supplement products or ingredients which have specific application to all four of these conditions, without mentioning the many other condition-specific ingredients that have relevance for other, less prevalent conditions, such as osteoporosis, which still has 23 million active managers.
While the number of active condition treaters is revealing of condition-specific supplement opportunities, perhaps even more indicative is the level of concern Americans report with preventing various conditions. NMI's research has consistently shown that consumers are disproportionately more concerned about preventing ailments as compared to the possibility that they might actually develop that ailment. For example, 66% of men say that they are concerned with preventing prostate cancer, but fewer than 5% of men actually have the condition. At least 75% of all consumers report that they are concerned with preventing several other serious conditions, such as high blood pressure, heart disease, high cholesterol, arthritis and vision problems, but the actual incidence levels of any of these conditions does not exceed 33%.
While Americans suffer from and worry about all of these health issues, they also demonstrate a willingness to treat these conditions with one form of product or another. For example, Table 3 shows usage rates of prescription drugs and over-the-counter (OTC) medicines.
Obviously, Americans are willing to take their medicine. However, note also the increase in use of OTC products, which may be indicative of an increased desire (or need) to self-treat. This could be due to an American streak of rugged individualism, but could also be the result of reduced medical insurance coverage, resulting in consumers being less willing or able to go to the doctor and/or afford prescription medicines. Whatever the cause, these factors are expected to lead to more openness and willingness of consumers to treat their ailments with supplements, especially those that are directly applicable to specific health conditions.
As mentioned previously, talk of low-carb lifestyles has been dominating the food and nutrition scene for the past year. But has it or will it affect the dietary supplement industry?
Weight management is one of the most important issues facing American consumers, with two-thirds (66%) of Americans reporting that they used some method to maintain or manage their weight in the past year, representing 138 million American adults. Twenty-four percent of consumers report having used a low-carb approach to weight loss in the past year, which translates to 50 million U.S. adults who in the past year have followed a low-carb diet. This also represents an increase of 38% versus the previous year, or an increase of almost 14 million additional low-carb weight managers. Low-carb weight management is likely to be more than a passing fad: the method has actually been known and written about for over 30 years, but built critical mass very slowly due to resistance among physicians and weight loss experts, and also due to its counterintuitive recommendations of consuming high fat foods along with protein, while shunning grain-based products and sugars.
As consumers have become more aware of and knowledgeable about low-carb diets, they have also learned about some of the other effects these diets may have, beyond weight loss. Halitosis aside, consumers are becoming more aware that shunning carbs may also result in deficiencies of various nutrients, which are found in the grain-based foods they no longer consume. For example, sales of B-complex vitamins appear to be increasing, which is most likely attributable to low-carb dieting.
What's on the
Horizon?
Other trends expected to become more obvious in the next 12 months involve how supplement ingredients are delivered. As shown in Table 4, usage of fortified and functional foods has increased over the past five years, indicating that consumers are seeking to get their nutrients in other forms beyond pills.
In addition, new and unique supplement formats are expected to show vigorous growth. While tablets, capsules, and softgels are still the top three formats for these products, soft chews, fast dissolve tablets, and quick-dissolve strips are gaining consumer acceptance, which is leading to much new product development activity among major manufacturers.
Where consumers will buy their supplements is also evolving. Food stores, in both mainstream and natural channels, are showing aggressive and sustained growth in supplement sales, as time-pressed consumers seek a one-stop solution for all of their nutritional and wellness needs. And the top selling private label supplement brand is found in America's number one retail chain: Wal-Mart.
While it may seem a contrarian opinion at the moment, continued growth of health issues and concerns, consumer trends in weight loss, the need for self-treatment, and new product and ingredient applications and delivery systems are generating new opportunities for growth in the long-suffering dietary supplement industry.NW
About the author: Joe Marra is the executive director at the Natural Marketing Institute (NMI), Harleysville, PA. He can be reached at 215-513-7300; Fax: 215-513-1713; E-mail: joe@nmisolutions.com; Website: www.nmisolutions.com.