The dietary supplements industry fought for mainstream appeal for years, and the COVID-19 pandemic emerged as the moment that the former niche industry made the leap.
According to the Nutrition Business Journal (NBJ), supplement sales increased a little more than $7 billion in 2020, translating to 14.5% growth. This spike in sales pushed the U.S. supplement market’s valuation to $55.75 billion by the end of the year.
While conventional wisdom might expect an economic disaster to hinder growth, historically, supplement sales have surged during economic downturns. The rising popularity of e-commerce, the biggest driver of supplement sales with nearly 18% growth over the last decade, has been a driving force behind this trend.
Add to these conditions a global health crisis, and it’s a formula for significant industry growth. The environment is so well-positioned for growth that NBJ predicts “that the U.S. supplement industry will see a lasting, ‘permanent lift’ in annual sales for years to come,” NBJ Senior Industry Analyst Claire Morton Reynolds explained.
For example, over the next two years, industry experts predict supplement sales will be $1.4 billion higher than they otherwise would’ve been without COVID-19, according to Nutritional Outlook reporting. By 2024, NBJ expects the U.S. supplement market to be worth more than $66 billion.
But the sudden surge in supplement popularity isn’t reflected in sales numbers alone. NBJ surveyed consumers about supplement use and found that 20% of them who’d never taken supplements before planned to start in 2020.
“Is this crisis bringing new customers into this industry?” Reynolds asked. “Anecdotally, the answer is yes. And this data shows this is the case.”
According to SPINS, a provider of data and insights for the natural, organic, and specialty products industry, the first spike in sales occurred in February 2020, as consumers braced for the pandemic.
The second surge in consumer buying hit in mid-March, as the number of cases in the United States kept climbing, and state and local governments started issuing stay-at-home orders.
Functional ingredients, such as elderberry and vitamin C, and other immunity-related ingredients, saw massive sales surges during the second wave. In addition, probiotic ingredients sales jumped sharply as well.
But What Does It Mean?
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 there’s an opportunity within the industry to provide consumers with more approachable solutions, including packaging and labeling, that are easier to understand.
Now is the time for the dietary supplement industry to shine. But it can only do so with robust regulatory compliance standards, especially for supplement brands that work with co-manufacturers. Non-compliance puts consumers at risk and threatens the industry’s credibility. 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. Instead, they can join the TraceGains community, including 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, “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.”
Find out how Supplier Compliance can improve supplier relationships.