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The market remains ripe with growth opportunities despite negative media reports.
July 1, 2016
By: Dr. A. Elizabeth Sloan
Sales of herbs/botanical supplements reached an all-time high of $7 billion in 2015, up 7.7% vs. 2014—enjoying more than 10 years of consecutive growth—and are projected to top $8.3 billion in sales by 2018, according to Nutrition Business Journal (NBJ), Boulder, CO. Herbs/botanicals accounted for 18% of supplement sales in 2015. Combination herbs/herbal formulas drove the category, with sales of $2.7 billion in 2015, up 12% vs. 2014. NBJ projected overall category growth of 6% annually through 2018—about 8% for blends. Perhaps most important, herbs/botanicals outpaced supplement industry growth despite highly publicized negative attacks on herbal supplements that claimed they were mislabeled and fraudulently marketed. In February 2015, the New York Attorney General (NY AG) claimed that 79% of herbal products tested from four major retailers failed to contain the labeled herb. Harvard Health Publications also conveyed a much-publicized story in its monthly newsletter that herbal supplements frequently did not contain the herbs listed. Although IRI reported that 38 herbal products had suffered either flat or declining sales, 13% posted increases in 2015. Four of the herbs attacked by the New York Attorney General—Ginkgo biloba, St. John’s Wort, valerian root and saw palmetto—experienced double-digit growth overall for the year ending Nov. 2, 2015, according to SPINS. Two other herbs involved in the NY AG report were ginseng and echinacea; ginseng sales rose 8% and echinacea sales were flat. NBJ reported that turmeric/curcumin, maca and rhodiola helped to carry the category. Sales of turmeric reached $196 million in 2015, up 20%, and are projected to reach $433 million by 2020. Maca supplements reached $108 million in 2015, bee pollen $167 million, milk thistle $131 million and “other Ayurvedic” supplements $93 million, per NBJ. Melatonin, cranberry, garlic and lutein ranked in the top 20 best-selling supplements overall in mass channels for the year ending Nov. 22, 2015, according to IRI, with sales up 5.3%, up 10.2%, down 0.4% and down 2.9%, respectively. Although sales of melatonin across all channels fell from 16.7% in 2014 to 6.8% in 2015, NBJ projected sales will reach $500 million by 2018. In 2015, 31% of consumers used an herbal supplement, according to the Council for Responsible Nutrition’s (CRN) 2015 Consumer Survey on Dietary Supplements. Green Tea was the most used herbal supplement in 2015, taken by 12% of supplement users, followed by cranberry 8%, garlic 6%, ginseng 6%, echinacea 5%, Ginkgo biloba 5%, turmeric 5% and milk thistle 4%, per CRN. Turmeric, goji berry and Garcinia cambogia posted the highest growth in consumer awareness, up in 2014 compared with 2013 (35%, 28% and 21%, respectively), according to the 2014 Gallup Study of the U.S. Market for Vitamins & Other Dietary Supplements. With herbs/botanicals traditionally associated with many natural remedies, it is not surprising that they are more frequently being used for purposes typically found in the OTC drug category; herbs and botanicals easily convey a more natural solution. Four of the top 10 best-selling OTC sleep aids contain botanical ingredients, according to IRI data. MidNite PM contains melatonin, lavender, lemon balm and chamomile; Alteril contains melatonin and valerian root. Herbal products’ growth in the mass market is being led by formulas targeting allergy, brain health, child remedies and cleansing—each growing more than 20% in 2015, per SPINS. Allergy and immunity led herbal product growth in the natural/specialty channel (up 15%). Topical analgesics, cough/cold/allergy and bottled drinks are the fastest growing herbal categories in the U.S., according to Euromonitor. Overall, the future looks good for herbal supplements. Millennials are the demographic most likely to use herbals, followed by Baby Boomers, according to Gallup. America’s fast-growing Hispanic population is among the heaviest users of herbal/botanical products. Also of note is that herbals/botanicals support a clean label, which is important to 43% of supplement users, per Gallup. Market Potential According to Sloan Trend’s TrendSense model, herbs/botanicals still remain most marketable in specialty channels. Curcumin, melatonin, Gingko biloba and cranberry are among the few that enjoy mass market status. Chamomile is highly marketable in specialty channels; valerian root is a rising star, likely riding on the wave of sleep remedies, since it is included in several sleep aid supplements. Both chamomile and valerian root have crossed the TrendSense Medical Threshold, signaling the beginning of a long-term sustainable consumer trend for these two herbal products.
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