How are herbal supplement sales post NY AG? Better than last year...

02-Aug-2015 - Last updated on 03-Aug-2015 at 14:01 GMT

Sales of herbal formula supplements are up almost 13% compared to the same time last year, according to new data from SPINS provided to NutraIngredients-USA.

Sales for the current 52 weeks ending July 12, 2015 were $687 million, up 12.6% compared to the 52 weeks ending July 12, 2014 ($610 million) for herbal formulas.

Sales for herbal formulas have shown double digit growth over last year for every four week period this year, with May, June, and July 2015 showing increases of over 25% compared to last year (see figure 1 below).

Herbal formula supplement sales SPINS July 2015 — Figure 1. Source: SPINS

Data from SPINSscan Natural and Specialty Gourmet (proprietary) and SPINSscan Conventional Multi Outlet (powered by IRI) captures natural supermarkets (excluding Whole Foods), specialty supermarkets, and conventional multi outlets, including Walmart.

Sales of single herb supplements have not fared as well, however, with negative growth reported for April through July of this year, compared to the same periods last year (see figure 2 below). Despite this, sales for single herbs are still showing 1.1% increases in sales for the 52 weeks ending on the 12 July 2015, compared to the previous 52 week period, according to the SPINS data.

NY AG

The sales data show no overall ill signs of an impact from New York Attorney General Eric Schneiderman’s actions against herbal supplements. AG Schneiderman publicly launched his investigation on February 2 with cease and desist letters to four major retailers – GNC, Target, Walgreens, and Walmart – after DNA barcoding tests found 79% of the products tested did not contain the labeled substance or contained other non-listed ingredients.

The investigation broadened on February 23 with letters sent to four leading manufacturers – NBTY, Pharmavite, Nature’s Way, and Nutraceutical Corp. – demanding detailed ingredient and quality control information on every herbal supplement they sell in his state.

The data from SPINS may sooth industry fears that the NY AG’s actions (and the controversial headlines in publications like The New York Times) would impact sales of the products.

Herbal single supplement sales SPINS July 2015 — Figure 2. From data provided by SPINS

"This data certainly counters fears of a precipitous decline," Michael McGuffin, president of the American Herbal Products Association (AHPA) told us. "This is an interesting snap shot and I would be loathe to read too much into it, but what we see are good numbers for herbal formulas," he added. Sales for the single herb products are flat over the year, even if we only consider the last 16 weeks, he added.

"We have been using herbs and botanicals for thousands of years and it is unlikely the AG's misunderstood results were going to drive people in any significant manner," he added. The data also corroborates messages from the market, said McGuffin, with "almost all individual AHPA member companies reporting strong, consistent sales. Some have reported modest sales, but we're certainly not hearing anything that would indicate a short term or precipitous decline in the market."

Judy Blatman, Sr VP of Communications for the Council for Responsible Nutrition (CRN), told NutraIngredients-USA that, according to this data, it is reassuring to see that the actions against herbal products by the NY Attorney General did not negatively impact herbal sales in a major way.

"We’ve heard similar results from another company monitoring sales," she said. "Since the NY Attorney General’s actions in February, we’ve done what we could to reassure consumers about herbals by consistently pointing out that the wrong tests by the NY Attorney General’s office led to a lack of credible results; however, as an industry, we also can’t be complacent about the need to raise the bar on quality and insist that manufacturers take consumer accountability seriously."

Daniel Fabricant, PhD, executive director and CEO of the Natural Products Association (NPA) said he is happy about the data. "I think it shows that the majority of botanicals consumers have a high degree of confidence because of the science that is present on the most popular botanicals and that more than anything else shapes their purchases," he said.

'An encouraging sign'

Loren Israelsen, president, United Natural Products Alliance, noted that, while the data reflect an expected drop in sales of single herbal products, likely due to the negative media surrounding the misguided New York attorney general’s investigation, the robust sales increases for herbal formulas across these same time frames and beyond, however, would seem to indicate that well-informed consumers continue to value the wellness benefits of botanical products overall.

"Without being able to review specific SKU movement, we can only speculate that the sales of botanical formulas, as sold by well-known, reputable and trusted brands, regardless of the channel of distribution, continue to follow positive, decades-long growth patterns for dietary supplements in general.

"We find this an encouraging sign despite the sensational and overblown headlines of today’s short news cycles," said Israelsen.

Interestingly, growth in herbal formulas has outpaced general vitamin and mineral supplement sales with overall sales growth for those products of 1.1% for the 52 weeks ending on the 12 July 2015 ($11.19 billion), compared to the previous 52 week period ($11.07 billion) for the retail channels covered by SPINS (see figure 3 below).