Preliminary findings for full year global sales in 2014 show the consumer health industry grew a promising 2.4% from 2013, even though sales in the U.S. struggled slightly in the face of negative research questioning the value of supplements, an increasing preference for functional foods over supplements and a weaker than usual cold, flu and allergy season, says Monica Feldman, head of consumer research at Euromonitor.
She suggests the difficulties in the U.S. market overall are not disastrous for supplement sales, but should serve as a wake-up call for firms to focus on what is working, invest in categories and geographies that are growing and manage competition.
Pediatric supplements on the rise
One such area of potential growth is in the children’s supplement category, sales of which grew an “extremely healthy” 6.9% to $3.5 billion globally in 2014 and is anticipated to grow as much as 8.8% in 2015 “if everything goes as planned,” Feldman said.
The plan is for much of this growth to come from outside the U.S., where increased competition from private label and brands dampened sales in 2014, although not volume, Feldman said. Negative media reports questioning the value of giving supplements to well-fed children also suppressed U.S. pediatric supplement sales, which are valued at $547 million in 2014, she added.
One strategy for increasing sales of children’s supplements is to reach beyond the historic multivitamins and vitamin C categories that dominate the sector, Feldman said – calling attention to the potential of omega-3 supplements in particular.
Other emerging ingredients globally that are appearing in more children’s supplements include amino acids, probiotics, lactic acid and vitamin C-packed acerola, Feldman said. She also said that children’s gummy vitamins are spreading around the world, noting Church & Dwight recently launched its L’il Critters line in Pakistan.
Probiotics continue to scale
Sales of probiotics in the Americas also are growing quickly and helping to compensate for category challenges in Europe, where firms cannot legally use the word probiotic on products, Feldman said.
Globally sales of probiotics in 2014 reached $2.4 billion – a 14.4% increase from the previous year, she noted. U.S. sales accounted for $1.5 billion last year – a staggering 23.8% increase from 2013.
In the Americas, including Latin America, probiotics mostly are consumed as pills and tablets, but increased interest in probiotics in food, such as yogurt and kiefer, could impact that in the future, Feldman said.
“In the U.S., retailers have expanded the refrigeration space to stock more fresh or cold probiotics,” she noted.
Probiotic drinks also are popular in ethnic stores targeting Asian and Hispanic populations, she said.
Protein gives category muscle
Protein supplements for use beyond sports also showed “impressive growth” in 2014 of 11% to $2.4 billion globally, Feldman said.
“A lot of the growth comes from … Asia Pacific and China where it is regarded as a gift for well-being” for the elderly, Feldman explained. She added sales of protein in Asia accounted for $1.6 billion of the category, which also grew thanks to an initiative in India to encourage protein use to fill nutrition gaps.
In the U.S., the “protein craze” continues with sales of protein supplements reaching $487 million in 2014 – a 21% increase from 2013, Feldman said. She attributes the growth to increased use by vegans and vegetarians. The increased interest in home juicing and making smoothies also helped as adding protein powder is to these drinks is popular, she said.
In addition, new benefit claims related to satiety and maintenance of muscle mass are prompting more people to add protein bars and drinks to their diets, she said.
Combinations offer short term growth, threaten long-term sales
Finally, Feldman said, the wellness trend is expanding interest in combination supplements that add a desirable ingredient such as fiber or protein to a more traditional multivitamin product.
“In the past, you purchased separate supplements, but nowadays in order to be competitive firms are combining them,” Feldman said. This helped fuel a 7.5% increase in sales of combination products to $4 billion in 2014 compared to 2013 globally. In the U.S., sales in the category grew 4.3% to $882 million.
While this trend is promising, Feldman cautioned that combinations “may be cannibalizing their sales,” because consumers will wonder why they should bother to buy separate supplements when combination products are more convenient and cost less, she said.