US Nutraceutical Industry

Part
01
of one
Part
01

US Nutraceutical Industry

The desire for a healthy life and to prevent disease will be a driver for nutraceuticals for years to come. Anti-aging and pet products are also experiencing a surge in popularity.

While the market is bifurcated, the majority of companies researched provide private label and in-house formulations for other companies that range from pills and powders to drinks and foods.

Competitive Landscape

Analysis

  • Turnkey private label companies tend to have a larger annual revenue.
  • The majority of companies sell direct to business, with very few selling to retailers or direct to consumer.
  • Many of the companies use Amazon as a retail outlet in addition to their other outlets.

Nutraceutical Trends

Anti-Aging

  • This trend, driven by baby boomers and millennials, surrounds the desire for functional foods and beverages that will make them look younger and feel energetic. They seek answers that are high in vitamins, minerals, and antioxidants.
  • Popular ingredients are acai, acerola, blueberry, cranberry, pomegranate, strawberry, barley grass, kale, oat grass, spinach, chlorella, and spirulina.

Sports/Energy

  • Sports and energy drinks and powders will also continue to trend upward.
  • This niche market will be a safe bet for years to come. Whereas this used to be just a category for hard core enthusiasts, the market now has customers from all along the age and fitness spectrum.
  • Seniors, with such a large population and health problems, are being encouraged to be healthier and to exercise. Providing this group with sports and energy supplements that are suited to their lifestyle and fitness needs could be a lucrative market.

Weight Loss

  • Especially in the US, with obesity a growing issue, products that are formulated to assist in weight loss will continue to be popular trends. Some of the popular ingredients in these items include electrolyte-rich coconut, low-glycemic sweeteners including Lo han guo (monk fruit), Lucuma, Nopal, Stevia and Yacon; high-fiber products such as Acai, Beet, Chia, Ceylon Cinnamon, and Kelp and metabolism boosters like Apple Cider Vinegar, Cacao, Cayenne, Ginger, Lemon, Matcha green tea and Papaya.

Nutriocosmetics

  • The beauty from within concept has been popular for a while and will continue to be popular. Americans like things that are easy, and the idea of being able to just take a pill that lets them avoid wrinkles or age spots is very appealing, and is driving the popularity of nutriocosmetics.
  • The opportunity might not necessarily be in new products, but in new markets. Millennials are concerned with prevention, making them an ideal group to market to.
  • Men, not typically considered a big market for nutriocosmetics, have also become a prime group to target with their growing interest in grooming products. One study indicated that 84% of men ages 18-44 use some sort of facial skincare product.

Cannabis

  • With the passage of the Hemp Farm Bill, which allows companies to grow their own hemp, and the USDA approval of CBD, expect to see even more products hit the market.
  • The FDA's statement that CBD can not be included in food, drinks, or supplements will impact the variety of items that enter the market.

Nutraceutical Drivers

Millennial & Baby Boomers

  • Millennials have a focus on health, fitness and nutrition and are driving the market. They also value convenience, which nutraceuticals provides them.
  • Millennials are the fastest growing group of nutraceutical consumers. This group is focused on creating a healthy lifestyle. They choose nutraceuticals based on products that are sustainable, environmentally friendly, and non-GMO. Convenience is key for this group.
  • Baby Boomers, due to the sheer number, are the largest group of consumers of nutraceuticals. This group is motivated by a desire to maintain a healthy weight, good nutrition, and better energy. They want to preserve their quality of life into retirement. They desire to replace or put off taking prescription medications.

Disease Prevention

  • Consumers are concerned with disease prevention. The rising cost of health care drives this concern. Consumers want to minimize the possibility of getting a chronic disease such as cancer, obesity, diabetes, allergy, Alzheimer, eye, immune, inflammatory and Parkinson's diseases. This further boost the demand for nutraceuticals.
  • The US, Canada, and Mexico are having an upsurge of spending on health and well-being products, providing key opportunities for the nutraceutical industry.

Lifestyle Demands

  • Lifestyles are busy and consumers are always looking for a way to meet the demands of their lifestyle. Increased disposable income and the need for a "quick fix" make nutraceuticals a perfect answer.
  • Items that promote a healthy gut with probiotics and prebiotics ingredients, along with products that promote a healthy lifestyle are increasingly popular. Items that have added vitamins and minerals are also attractive, as fast food diets have affected how many people have appropriate vitamin and mineral levels.

Pet Products

  • While pet supplements have been around for quite a while, the popularity is steadily increasing. Pet owners increasingly consider their pet as part of their family, therefore owners want their pets to have a high quality of life.
  • Owners are willing to purchase nutraceuticals that will prolong and improve their pet's lives, and they are willing to purchase and pay for high quality products. The current trend of purchasing pet food with no artificial flavors and colors, gluten or GMO ingredients indicates they are also willing to spend more on supplements for their pets.

Restraints

Plastic Packaging

  • Sustainability, which is a buzz word lately, is important to consumers. They expect safeguards during the various stages of the supply chain to protect the environment.
  • Plastics, which are popular packaging materials, present a problem due to the amount of time it takes plastic to decompose.
  • With supplements, getting rid of plastics is difficult and hard to accomplish.
  • While companies can not turn away from plastics, there are ways to embrace this trend to seem as sustainable as possible. Some companies collect their consumer's waste, melt it down, and reuse it for new packaging. Even though the plastics are not environmentally friendly, reusing the packaging makes it friendlier.
  • Some companies are reducing their dependency on plastic by moving from rigid containers to pouches and stick packs.

Production Costs

  • Production costs can be high for nutraceuticals. The cost of production for raw materials has increased in recent years along with new technologies for extraction.
  • Along with the extraction costs, the pipeline for R&D can be time-consuming and costly. R&D is one of the key factors in the cost of nutraceuticals.

Research Strategy

To obtain trends, drivers, and restraints, multiple industry reports were consulted. To be included, the trend, driver, or restraint needed to be mentioned multiple times by said industry reports.
Sources
Sources