By Mike Montemarano, Associate Editor07.06.23
While overall dietary supplement sales have come back down to Earth following the COVID-19 surge, herbal and botanical products are still performing well and are in position to reach $13 billion in sales.
At the American Herbal Products Association’s (AHPA) Botanical Congress, experts analyzed today’s market and predicted what tomorrow may hold for this category.
Following 14% CAGR in 2020 for dietary supplements overall, market growth has essentially been flat the last two years. According to New Hope data, the dietary supplements market as a whole is $1.5 billion lower than pre-COVID-19 estimates.
Meanwhile, the U.S. herb and botanical market is about $2 billion higher than pre-COVID-19 predictions. The market is now on track to exceed a CAGR of 5% by next year, Morton said, reaching $13 billion in sales.
The rise in experiential benefits, which herbal products are uniquely positioned for, will be the leading driver of these products, according to Morton.
“There’s lots of movement in the market around issues like stress, fatigue, anxiety, depression, and insomnia, which affect anywhere from a reported 34% to 41% of consumers,” she said.
The market for supplements positioned for mood and mental wellness is dominated by a variety of botanical products, including combination herb formulas (19.6% market share), hemp/CBD (10.9%), and Ayurvedic herbs (5.5%), Morton noted.
Additionally, while melatonin retains the highest market share of the sleep supplements category (55%), combination herb formulas now represent 18.1% of the market, which reflects 19.7% growth.
However, “optimizing overall wellbeing” (74%) has become just as prevalent a reason for taking herb and botanical supplements as “to feel better” (i.e., mood, cognition, and immunity) (74%), according to New Hope surveys.
“A lot of consumers who normally wouldn’t have been interested in these products got brought into the mushrooms market in 2020 due to immune concerns; and from there, other interest in health applications began to grow,” Morton said. “Covid was a huge gateway for this category.”
Multi-mushroom formulas represent 78.9% of all mushroom supplements sold, according to New Hope. When it comes to single-ingredient mushroom supplements, cordyceps leads with 4.7% market share, while other single-mushroom formulas, all combined, make up 11.8%.
According to Diane Ray, vice president of strategic innovation at the Natural Marketing Institute (NMI), 25% of the general population presently uses medicinal mushrooms. Primary reasons are to improve energy, immune function, and overall health, while emotional health and cognition were listed as the leading secondary conditions.
An aging population and prevalence of chronic conditions; a renewed need for health fortification; immune, stress, and anxiety concerns; and increased overall awareness of herb benefits are shaping consumer attitudes, according to NMI survey data.
Emerging delivery systems for improving the performance of these products, as well as fortification of foods and beverages will also help grow the market.
Overall, one in five consumers used an herbal supplement within the past month, according to NMI data. Herbal supplement use increased from 18% to 21% in surveyed consumers between 2018 and 2021.
Inflation is having a significant effect on herbal supplement use, Ray noted, with 31% of herbal supplement users indicating they’re buying less of these products, which is higher than condition-specific supplements (29%), individual vitamins (28%), multivitamins (27%), and individual minerals (27%).
Among herbal supplement users, one in four are buying fewer supplements overall to deal with inflationary pressures. However, just as many are buying more supplements online, buying supplements to manage their stress levels, and switching to store-brand supplements for the
same reason.
Ray noted demographic areas where the average herbal supplement user over-indexes compared to dietary supplement users as a whole. On average, an herbal supplement user is more likely to be a Millennial between 25 and 45 (53%), have some college education (51%), have a child in the household under the age of 18 (49%), and are Hispanic/Latino (22%).
Herbal supplement users also tend to be bigger spenders and have more disposable income. The median income of this user base is $87,000, compared to $70,000 for all supplement users. Herbal users took an average of 4.8 supplement products per day compared to 3.3 per day for all supplement users.
Across all supplement users, the average amount spent on supplements per month was $48, while herbal supplement users spent between $60 and $78 per month depending on how many supplements they used. Opportunities for premium herbal supplement products are particularly high, Ray said.
Specifically, top concerns closely tailing price were an inability to determine the efficacy of a supplement (45%), having to take supplements at different times throughout the day (43%), and difficulty swallowing supplements (39%).
Additionally, 61% of herbal users said they’re concerned that their body doesn’t absorb the nutrients that supplements are supposed to deliver. Even more (78%) would like to see clinical proof that the nutrients in the supplements they take are being fully absorbed.
“Therefore, emerging delivery systems such as nanotechnology and liposomal delivery help to allay consumer concern regarding absorption by providing scientific proof and explanation of the heightened absorption process,” Ray said.
Consumers also over-index in their likelihood to buy a supplement if it is derived from natural or organic sources and uses sustainable or environmentally-friendly ingredients, Ray noted.
On that note, consumers are most likely to purchase supplements with seals of non-GMO certification (69%), USDA Certified Organic (69%), United States Pharmacopoeia (58%), fair trade (54%), regenerative organic (50%), B-Corp (46%), or NSF (40%).
At the American Herbal Products Association’s (AHPA) Botanical Congress, experts analyzed today’s market and predicted what tomorrow may hold for this category.
Market Outlook
Herbal and botanical products now represent 19% of total dietary supplement sales, according to Claire Morton, senior industry analyst at New Hope. Top-line sales data indicate that herbs and botanicals will continue to outperform the overall dietary supplement category.Following 14% CAGR in 2020 for dietary supplements overall, market growth has essentially been flat the last two years. According to New Hope data, the dietary supplements market as a whole is $1.5 billion lower than pre-COVID-19 estimates.
Meanwhile, the U.S. herb and botanical market is about $2 billion higher than pre-COVID-19 predictions. The market is now on track to exceed a CAGR of 5% by next year, Morton said, reaching $13 billion in sales.
The rise in experiential benefits, which herbal products are uniquely positioned for, will be the leading driver of these products, according to Morton.
“There’s lots of movement in the market around issues like stress, fatigue, anxiety, depression, and insomnia, which affect anywhere from a reported 34% to 41% of consumers,” she said.
The market for supplements positioned for mood and mental wellness is dominated by a variety of botanical products, including combination herb formulas (19.6% market share), hemp/CBD (10.9%), and Ayurvedic herbs (5.5%), Morton noted.
Additionally, while melatonin retains the highest market share of the sleep supplements category (55%), combination herb formulas now represent 18.1% of the market, which reflects 19.7% growth.
However, “optimizing overall wellbeing” (74%) has become just as prevalent a reason for taking herb and botanical supplements as “to feel better” (i.e., mood, cognition, and immunity) (74%), according to New Hope surveys.
Fungi Take Over
There is palpable growth in popularity of mushroom supplements for a variety of conditions. Consumers report taking them in the past year mainly for general health (28%), mood and stress (27%), brain health and cognition (25%), and immunity (22%).“A lot of consumers who normally wouldn’t have been interested in these products got brought into the mushrooms market in 2020 due to immune concerns; and from there, other interest in health applications began to grow,” Morton said. “Covid was a huge gateway for this category.”
Multi-mushroom formulas represent 78.9% of all mushroom supplements sold, according to New Hope. When it comes to single-ingredient mushroom supplements, cordyceps leads with 4.7% market share, while other single-mushroom formulas, all combined, make up 11.8%.
According to Diane Ray, vice president of strategic innovation at the Natural Marketing Institute (NMI), 25% of the general population presently uses medicinal mushrooms. Primary reasons are to improve energy, immune function, and overall health, while emotional health and cognition were listed as the leading secondary conditions.
Consumer Trends
A range of factors will influence growing consumer interest in herbs and botanicals, according to Ray.An aging population and prevalence of chronic conditions; a renewed need for health fortification; immune, stress, and anxiety concerns; and increased overall awareness of herb benefits are shaping consumer attitudes, according to NMI survey data.
Emerging delivery systems for improving the performance of these products, as well as fortification of foods and beverages will also help grow the market.
Overall, one in five consumers used an herbal supplement within the past month, according to NMI data. Herbal supplement use increased from 18% to 21% in surveyed consumers between 2018 and 2021.
Inflation is having a significant effect on herbal supplement use, Ray noted, with 31% of herbal supplement users indicating they’re buying less of these products, which is higher than condition-specific supplements (29%), individual vitamins (28%), multivitamins (27%), and individual minerals (27%).
Among herbal supplement users, one in four are buying fewer supplements overall to deal with inflationary pressures. However, just as many are buying more supplements online, buying supplements to manage their stress levels, and switching to store-brand supplements for the
same reason.
Ray noted demographic areas where the average herbal supplement user over-indexes compared to dietary supplement users as a whole. On average, an herbal supplement user is more likely to be a Millennial between 25 and 45 (53%), have some college education (51%), have a child in the household under the age of 18 (49%), and are Hispanic/Latino (22%).
Herbal supplement users also tend to be bigger spenders and have more disposable income. The median income of this user base is $87,000, compared to $70,000 for all supplement users. Herbal users took an average of 4.8 supplement products per day compared to 3.3 per day for all supplement users.
Across all supplement users, the average amount spent on supplements per month was $48, while herbal supplement users spent between $60 and $78 per month depending on how many supplements they used. Opportunities for premium herbal supplement products are particularly high, Ray said.
A Savvy Demographic
While price is a top concern for herbal supplement users, there’s a multitude of other factors consumers consider in their purchasing.Specifically, top concerns closely tailing price were an inability to determine the efficacy of a supplement (45%), having to take supplements at different times throughout the day (43%), and difficulty swallowing supplements (39%).
Additionally, 61% of herbal users said they’re concerned that their body doesn’t absorb the nutrients that supplements are supposed to deliver. Even more (78%) would like to see clinical proof that the nutrients in the supplements they take are being fully absorbed.
“Therefore, emerging delivery systems such as nanotechnology and liposomal delivery help to allay consumer concern regarding absorption by providing scientific proof and explanation of the heightened absorption process,” Ray said.
Consumers also over-index in their likelihood to buy a supplement if it is derived from natural or organic sources and uses sustainable or environmentally-friendly ingredients, Ray noted.
On that note, consumers are most likely to purchase supplements with seals of non-GMO certification (69%), USDA Certified Organic (69%), United States Pharmacopoeia (58%), fair trade (54%), regenerative organic (50%), B-Corp (46%), or NSF (40%).
