Are Supplements Sick?

There’s still profits to be had.

By Greg Kitzmiller

There has been much moaning and gnashing of teeth on the dietary supplement side of nutraceuticals in the last 12-24 months, which gives the impression that business is terrible. In some segments that may be true but there is NO reason to believe that supplements are sick and suffering from a chronic long-term illness.

In talking to individuals who know a lot about the market and the state of affairs and analyzing a report (which I wrote) for HealthFocus International about dietary supplements, we can provide new data about supplement users.

Overall, the supplement industry is growing. Yes, growing! According to Nutrition Business Journal (NBJ), the overall market registered 3.6% annual growth for 2000. While it is too early to calculate a total for 2001, NBJ predicts there will be growth in the total market.

The overall nutrition industry was booming in the mid 1990s and in some years grew more than 10% per year. In comparison a few percentage points of growth may pale in comparison; however, overall category growth is still growth.

Let’s look at the facts. Figures for 12 months in Food-Drug-Mass (FDM) channels for herbals are going to show double-digit losses. Despite this sizeable loss in the mass market, NBJ believes the overall herbals business through all channels will be flat to slightly down. Compared to the tre­mendous growth in herbs in the past this trend seems terrible. On the other hand if you were the global “herb czar” and controlled all sales of herbals you could afford to lose a couplepercentage points of sales compared to a year ago (up 1.2% in 2000) on the new base that has grown since 1990. In other words, overall herbals still represent a very substantial business that is much larger than it was 15 years ago.

Specialty supplements have mixed results by type but overall should be positive. Glucosamine is still growing, while some single vitamins are dropping slightly. Overall vitamins and minerals are likely to net out positive. Some segments will continue to do very well, which will make up for those segments that do not.

Behind the numbers are the consumers, who still remain interested in supplements. Drawing from the HealthFocus Supplement Report, which surveys food shoppers in the U.S., we can look at their declared choices and attitudes toward supplements. The de­clared use of supplements by shoppers has increased significantly over the past decade and continues to go up. Regular use (at least twice per week) of multivitamins is up and regular use of specialty supplements is holding steady, showing a slight increase from the mid 1990s. While data has not been collected on herbal supplement use for that long, it mirrors the market; regular use was slightly higher in 1998 than in 2000 (the data are collected every two years).

As for attitude and lifestyle, the HealthFocus data indicate that supplement users tend to buy into health and healthy choices much more than non-users. In addition, supplement users are more likely than non-users to want to learn more about how nutrients and in­gredients relate to health and disease. More than four out of 10 shoppers who use supplements still want to learn more about how anti­oxidants or other vitamins or minerals relate to health and disease and one out of three is interested in learning more about herbals. These people tend to be well informed and are interested in more information.

Changing the Industry’s Image

A few years ago NBJ presented a study that showed there were twice as many negative news stories about supplements than positive. Now, the Council for Responsible Nutrition (CRN) has stated that the criticism of supplements by the press, combined with a perception that the supplements industry is unregulated, is nearing an emergency state. The American Herbal Products Association (AHPA) agrees, saying there is a consistent media theme that supplements are unregulated. To rid the mainstream media of this image AHPA and others formed the Dietary Supplement Education Alliance (DSEA) last year to provide information about the health benefits and responsible use of supplements to the mainstream media and consumers. But is that enough?

Another problem the supplement industry faces is research incentives. According to the Consumer Healthcare Products Association (CHPA), there is no incentive for individual firms to invest in the creation of solid scientific data and its dissemination. Additionally, once firms create data about a particular ingredient and publish it, they are giving it away for all other firms to use.

In The End…

The consumer marches on. They continue to buy supplements and seek information and we do not see data that suggest they are turning their back on supplementation in general. Some segments are healthy and others are not. Thus, one strategic key is understanding the differences in segment users. Specialty supplement users tend to skew a bit older, while herbal users skew a bit younger. They don’t have exactly the same issues or the same problems but every one of them seeks increased health!

Supplements are not sick. They may not be booming, but there are plenty of firms with substantial sales and profits and plenty of consumers to serve. Consumers are awaiting more accurate and relevant news and they are out there for you to find and serve!NW