The dietary supplements industry has fought for mainstream appeal for years, and the COVID-19 pandemic just might be the moment for the former niche industry to cross the chasm.
According to the Nutrition Business Journal (NBJ), supplement sales grew 5.7% to hit $48.7 billion in 2019, with vitamins holding steady as the market leader.
While conventional wisdom might expect an economic disaster to hinder growth, supplement sales tend to surge during downturns. The rising popularity of e-commerce, the biggest driver of supplement sales with nearly 18% growth over the last decade, has only strengthened this trend.
Add to these conditions a health crisis with no traditional medical option in sight, and it's a formula for major industry growth. The environment is so poised for growth that NBJ predicts supplement sales to surge past $50 billion in 2020, representing a whopping 25% increase in 2019. NBJ Senior Industry Analyst Claire Morton Reynolds recently revealed that 17 of the top 20 selling vitamin products in the previous year focused on immune health.
But the sudden surge in supplement popularity isn't reflected in sales numbers alone. NBJ recently surveyed consumers about supplement use and found that 20% of consumers who'd never taken supplements in the past plan to start taken them this year.
“Is this crisis bringing new customers into this industry?” Reynolds asked. “Anecdotally, the answer is yes. And this data shows this is the case.”
Two Pivotal Dates
According to data collected by SPINS, a provider of data and insights for the natural, organic and specialty products industry, the first spike in sales occurred in February, as consumers braced themselves for the pandemic.
The second surge in consumer buying hit in mid-March, as the number of cases in the United States rose, and quarantine orders started coming down from state and local governments.
Functional ingredients, like elderberry and vitamin C, and other immunity-related ingredients saw huge sales increases during the second wave. Still, probiotic ingredients sales were up sharply as well.
But What Does it Mean for the Future?
SPINS EVP of Business Development Kathryn Peters pointed to several long-term ramifications of the spring surge in supplement sales.
While many questions remain, she suggested that consumers’ “heightened awareness of self-care for immunity” will persist, echoing Reynolds' earlier point that this crisis had drawn a wealth of new supplement users.
Peters also hinted that the industry would experience a sharper divergence between value and private labels vs. premium brands based on consumer preferences.
“Value brands and private labels have an opportunity to add ‘features,’ like functional ingredients or packaging,” Peters explained. “And, on the other side, for premium products, there's an opportunity to push the innovation envelope with new ‘features’ and expanded categories.”
Finally, Peters suggested that there’s an opportunity within the industry to provide consumers with more approachable solutions, including packaging and labeling, that’s easier to understand.
Now is the time for the dietary supplement industry to shine. It can only do so with a robust regulatory compliance program, especially for supplement brands that work with co-manufacturers. Non-compliance puts consumers at risk and threatens the credibility of the industry. The adverse publicity of receiving a warning letter from the Food and Drug Administration can wreak havoc on consumer confidence. And if it reaches the next level, an injunction can put a brand out of business.
Steve Mister, President & CEO of the Council for Responsible Nutrition (CRN), said it best when he said, “Now is the time for companies to down on quality controls.”
Fortunately, supplement makers and brand owners don’t need to go it alone. They can join the TraceGains community, which includes organizations like the United Natural Products Alliance (UNPA), where expert advice is just a phone call away. In addition to community support, TraceGains helps supplement companies automate compliance and quality assurance processes so they can focus on business growth.
But don’t take our word for it. Here’s what Tom Dubinski, VP of Quality Systems at Arizona Nutritional Supplements had to say about TraceGains:
“With TraceGains, we have clarity and visibility on the compliance status of every supplier and material. We can now tell customers where every material came from — including a full audit report. Growing our business depends on having that level of traceability and compliance.”
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