Supplements industry worth $61bn to US economy
Commissioned by the Natural Products Foundation’s Dietary Supplements Information Bureau and compiled by Washington D.C.-based health care consultancy, Dobson, DaVanzo & Associates, the Economic Impact Report looked at the broader impact of the dietary supplements industry including its contribution via labor, materials and technology.
“For every dollar spent by the dietary supplement industry, the economic contribution to the US economy is $2.71,” the researchers said. For every one job created by the dietary supplements industry, 2.29 jobs are created in the US economy.
The firm is the first to conduct such a report on the dietary supplements industry and it estimated more than 450,000 jobs and $10bn in taxes was paid by the industry in 2006.
“Most industry assessments primarily focus on sales, but this is really just the tip of the iceberg,” said Tracy Taylor executive director of the Natural Products Foundation in an NPF statement.
“The labor, materials, and technology necessary to move each product from a raw material to the final sale cause a whole spectrum of economic consequences.”
The bigger picture
Economic impact factors considered by the report included supply, production, research, direct employment, manufacturing and taxes.
“Not only does the dietary supplement industry represent an important and growing component of the US economy, it is interconnected in essential ways with many other industries," said the study's authors.
"For example, the dietary supplement industry contributes to output (or spending) in other industries, such as retail and wholesale trade; real estate, rental and leasing; finance and insurance; professional, scientific, and technical services; and manufacturing."
The researchers found the dietary supplements industry has consistently been growing faster than regular inflation of 2-3 percent and was more like five percent.
“The dietary supplement industry is a significant economic engine that powers businesses in communities in every state across the country,” said Taylor. “And the fact that the industry has been growing steadily at a rate that exceeds inflation for more than 10 years, even in unstable economic times, bodes well for the future.”
The researchers employed a mathematical input-output (I-O) model (IMPLAN) to perform their study.
The I/O model
An I/O model is typically used in employment models and is based on the idea that when new money enters a community through investment, revenues, or income, some of it is re-spent one or more times in the local economy, thereby creating additional economic impact.
The NPF is the non-profit educational arm of the trade group, the Natural Products Association.
A group spokesperson was not able to be contacted by the time of publication.