Vitamin and Supplement Category Deep Dive

Part
01
of three
Part
01

Vitamin and Supplement Industry: Market Size

The U.S. vitamin and supplement industry is worth $33 billion. The weight management supplements and sports nutrition categories have an estimated market share of 33.6% in the U.S. vitamin and supplement industry.

U.S. VITAMIN AND SUPPLEMENT INDUSTRY

  • The U.S. vitamin and supplement industry has a revenue of $33 billion.
  • The market is growing at a CAGR of 2.0%
  • The U.S. sports nutrition and weight management supplement have an estimated market share of 33.6% in the U.S. vitamin and supplements industry. (calculated in the research strategy section)

U.S. SPORT NUTRITION AND WEIGHT MANAGEMENT MARKET

  • The U.S. sports nutrition and weight management market is valued at $37.5 billion.
  • Sports nutrition and supplement represent 13.3% of the U.S. nutrition and weight management market.
  • Weight management meal supplement represents 10.8% of the market
  • Weight management pill-form supplement represents 5.5% of the market.

RESEARCH STRATEGY

To provide the industry information for the U.S. vitamin and supplements industry and market share of the weight management supplements and sports nutrition, we searched through industry reports from sources like Persistence Market Research, Euromonitor, GiiResearch, Wise Guy Reports, Technavio, MordorIntelligence, Mintel, GrandviewResearch, MarketWatch, Markets and Markets, AdroitMarketResearch, IBISWorld, Statista, among others. The idea was to find already published research on the industry since the mentioned sources provide market intelligence reports. We were able to locate the U.S. market size of the requested industry but not the market share of the segments through this strategy as the information was only available behind a paywall.

We also searched through several media sites like GlobeNewswire, Healthcare News, PRNewswire, Reportlinker, Nutrition Business Journal, Reuters, among others. On the mentioned sources, we found several reports on the global vitamin and supplements industry broken down by segments and products types, but the information was an extract from the market reports mentioned in our first strategy and was only available behind a paywall.

Next, to provide the market share of the U.S. weight management supplements and sports nutrition, we decided first to find the revenue generated by the segments. Our line of thought was to locate the revenues generated by the U.S. segments of the market and use the information to calculate the market share of the sector in the overall vitamins and supplement industry. After an exhaustive search, we were able to locate information which we then used in calculating the market shares. We found the overall U.S. nutrition and weight management market broken-down by market share of the sports nutrition and weight management supplement market segments.

We used the market shares of the sports nutrition supplement and weight management supplements to calculate the revenue generated by each segment and added the revenues to get the total revenue by the combined weight management supplements and sports nutrition market segments. After finding the revenue, we used the information to calculate the market share of the segments in the overall U.S. vitamin and supplements industry.

CALCULATION

First, we determined the revenue of the sports nutrition and weight management supplement segments using the formula: revenue = (market share * market size).
U.S. Sport nutrition and weight management supplement market
  • Market share = 13.3% or 0.133
  • Sport nutrition and supplement revenue = (0.133 * $37,500,000,000) = $4,987,500,000
Weight management meal supplement revenue
Weight management pill-form supplement revenue
Next, we added the revenue of each segment to get the overall revenue of the sports nutrition and weight management supplement market.
  • The U.S. sport nutrition and weight management supplement market revenue = sport nutrition and supplement + weight management meal supplement + weight management pill-form supplement = $4,987,500,000 + $4,050,000,000 + $2,062,500,000 = $11,100,000,000 or $11.1 billion.
After finding the revenue of the U.S. sports nutrition and weight management supplement market, we use the revenue of the segments to calculate the market share in the overall U.S. vitamin and supplements industry market.
  • Market share formula = (revenue of the U.S. sports nutrition and weight management supplement market / U.S. vitamin and supplements industry market size) * 100 = ($11,100,000,000 / $33,000,000,000) * 100 = 33.6%
  • Therefore, the U.S. sports nutrition and weight management supplement have a market share of 33.6% in the U.S. vitamin and supplements industry.
Part
02
of three
Part
02

Vitamin and Supplement Industry: Trends

Major trends that will impact the vitamin and supplement industry in the United States over the next three years center on new ingredient research, delivery format innovation, personalization, e-commerce, and clean labels.

NEW INGREDIENT RESEARCH

  • Scientific research in the areas of anti-aging or longevity, cognitive health, probiotics, prebiotics, nootropics, adaptogens, microbiome, and beauty from within are driving growth in the United States's supplement market, according to Stephen Daniells, editor in chief of leading nutrition news site NutraIngredients — USA.
  • Ingredients such as Urolithin A, collagen, lutein, and curcumin/turmeric are being watched very closely for their applications in anti-aging supplements, beauty-from-within supplements, cognitive health supplements, and adaptogenic supplements, respectively.
  • The growing body of research on these ingredients is expected to translate to new and innovative products in the supplement industry. Daniells expects research and excitement around these ingredients to only grow in the coming years.
  • Two examples of companies that have recently launched supplements that contain these ingredients include Nuvothera and BioCell Technology, LLC. Nuvothera recently launched its Super-MIcronized Turmeric Curcumin supplement for improved mobility and joint health, while BioCell Technology, LLC recently launched its BioCell Collagen supplement for healthy aging.
  • Collagen will remain an in-demand ingredient in the category of supplements for healthy hair, skin, and nails. Sales of collagen supplements in the United States are expected to grow from around $130 million in 2018 to around $250 million by 2021.
  • By 2021, sales of turmeric supplements, cognitive health supplements, and probiotic supplements are forecast to reach $500 million, $1 billion, and $4 billion, respectively.
  • Cannabidiol (CBD), whether hemp-derived or not, cannot be used in dietary supplements, as clarified by the United States Food and Drug Administration, but it is expected to have a significant impact on the supplement industry should it be made legal.

DELIVERY FORMAT INNOVATION

  • Supplement delivery formats are another area that is seeing significant innovation, according to Daniells. Novel delivery formats such as powders, gummies, and liquids are emerging, as a result of pill fatigue. Similar to new ingredient research, innovations in supplement delivery are expected to contribute to the growth of the country's supplement market.
  • Research into other gelling agents, apart from gelatin, appears promising and is expected to contribute to the development of gummies for consumers who eat only vegetarian, vegan, halal, or kosher food. Pectin and modified corn starch are among the alternative gelling agents that are being explored.
  • Geltor is one example of a company that is working on an alternative gelatin. The San Francisco-based company is producing vegetarian gelatin through synthetic biology and fermentation. Advances in this area will give supplement formulators opportunities to attract the vegetarian, vegan, halal, and kosher markets.
  • Even confectioneries and appliance manufacturers, such as Georgia Nut Company, Tespo, and GudPod, are offering new ways of delivering supplements. The innovations of these companies center on chocolate gems, edible cups, and countertop appliances that make use of vitamin pods.

PERSONALIZATION

  • Personalization has found its way into the country's supplement industry and is expected to remain a growth driver. Through personalization services entailing blood tests, microbiome tests, or genetic analyses, consumers can identify the supplements that are right for them.
  • Several companies have already started offering supplement personalization, and Daniells predicts the science and technology around this service will only advance at "breakneck speed."
  • Daniells also expects stricter regulations to control this growing space. He quotes nutritional medicine expert Dr. Jeff Bland as saying: "Gene-based information is re-writing nutrition science in a way that is inconsistent with the current regulations.
  • Care/of and Ritual are among the startups that are taking advantage of the personalization or customization trend. Both startups offer personalized or customized vitamins. Care/of determines the customer's personal vitamin needs through a questionnaire, and prepares a personalized plan, while Ritual offers vitamins that are tailored to women's needs.
  • It appears even established companies in the consumer packaged goods sector are investing in personalized nutrition. Nestle, for example, recently acquired Atrium Innovations, which, in turn, owns the Pure Encapsulations brand and the PureGenomics program.

E-COMMERCE

  • E-commerce is expected to make further inroads in the country's supplement industry, as more and more consumers seek an easy and convenient way of purchasing supplements.
  • The online sales of supplements in the United States, which were valued at $7.7 billion in 2017, are expected to expand at a year-on-year growth rate of 12% to 13% in years 2019, 2020, and 2021. Over 65% of branded supplement manufacturers believe e-commerce will be very important in the next five years.
  • Leading players in the country's online dietary supplement market include Amazon, Bodybuilding.com, Vitacost.com, iHerb.com and Vitamin World.

CLEAN LABELS

  • When purchasing supplements, meticulous consumers are likely to steer clear of chemical-sounding names such as magnesium stearate, calcium phosphate, silicon dioxide, and maltodextrin — ingredients typically used as binders, non-nutritive fillers, or flow agents in tablets and some powders.
  • Consumer preferences have already started shifting from capsules and tablets to select liquid and powder formats. Consumers have even become wary of sugar-forward gummies, even though gummies are growing in popularity.
  • Clean labels such as low/no/reduced allergen, gluten-free, no additives/preservatives, low/no/reduced sugar, and non-GMO are among the top vitamin and supplement claims.
  • Ribus is one example of a company that is helping supplement manufacturers get rid of unwanted chemicals. It offers Nu-MAG, a clean label lubricant that serves as an alternative to magnesium stearate, and enables supplement manufacturers to make natural and organic dietary supplements.
  • MegaFood is one example of a supplement brand that offers supplements made with premium, whole foods. It recently showcased its newest innovations at the Natural Products Expo East.

RESEARCH STRATEGY

To identify the major trends that will impact the United States market for vitamins and supplements in the next three years, we surveyed what the public domain offers on the following topics: (a) emerging supplement trends, (b) the future of supplements, (c) the outlook for supplements, (d) the latest supplement innovations, advances, or developments, (e) new or novel supplement ingredients, formulations, and delivery formats, (f) the most recent supplement launches, (g) the latest supplement startups, and (h) the factors driving the supplement market. This approach gave us a picture of the most important trends that will influence or continue to influence the market in the near future. We paid special attention to market projections or forecasts, and we defined major trends as the trends most commonly identified by experts or authorities in the space as the key market drivers.
Part
03
of three
Part
03

Vitamin and Supplement Industry: Competitive Landscape

An American vitamin and supplements company that has shown significant growth in the industry is The Nature's Bounty Co. Additionally, two US start-up companies that are showing a promising future in the industry are Care/of and Ritual.

1. THE NATURE'S BOUNTY CO.

COMPANY OVERVIEW
  • The Nature's Bounty Co. is a private company founded in 1995 in New York City.
  • The company is a global leader in the health and wellness products industry, which includes vitamins and supplements, with over 11,000 employees.
  • In 2010, it was acquired by the Carlyle Group to help the brand continue its expansion.
SERVICES/OFFERING
  • The Nature's Bounty Co. offers innovative health and wellness products of the highest quality, including every major vitamin, herb, mineral, active and sports nutrition, and supplements.
  • Some of their brands are Nature’s Bounty, Holland & Barrett, Sundown Naturals, Solgar, Osteo Bi-Flex, MET-Rx, Puritan’s Pride, Body Fortress, Pure Protein, and Balance Bar, among others.
BUSINESS MODEL
  • The company employs different distribution channels and facilities in the US and Canada for distribution, manufacturing, warehouse, packaging, and administration.
  • They also have offices in the United Kingdom, the Netherlands, China, New Zealand, Spain, and South Africa.
GROWTH INDICATORS
COMPETITIVE ADVANTAGE
  • The Nature's Bounty Co. is a well-established brand with over 145 years of experience and a recognized leader in the industry.
  • Their catalog includes every vitamin and supplement needed for every audience.
  • It was listed in Forbes' Largest American Companies.
  • According to IBIS World's report, it holds one of the largest market shares in the global industry of vitamins and supplements.

2. RITUAL

COMPANY OVERVIEW
  • Ritual is a private vitamin company for women that was founded in 2015 by Katerina Schneider.
  • The company's annual revenue is $5 million, it is located in California, and has approximately 70 employees.
  • Its philosophy is that better ingredients help promote better health. The company dedicates its research to identifying essential nutrients that are often limited in women's diet and ways to include them with simple ingredients.
SERVICES/OFFERING
  • Ritual offers vitamins for women through subscription boxes.
  • Its catalog includes daily and prenatal vitamins for women.
  • In 2019, they will also launch postnatal and post-menopausal vitamins.
  • Some ingredients found in their vitamins are folate, omega-3, vitamin B12, vitamin D3, Iron, vitamin K2, boron, vitamin E, and magnesium.
BUSINESS MODEL
  • Ritual follows a subscription-based model of $30 per month that includes the shipping of the daily vitamins and prenatal supplements their female subscribers need in 30 days.
  • Their strategy is a direct-to-consumer sale and marketing through Instagram, where they connect with wellness enthusiasts to establish a strong following count.
  • Because they believe each person has the right to know what they're consuming, the company is transparent about the ingredients found in their products and the benefits these offer. They publish scientific studies about them on their website.
GROWTH INDICATORS
  • Ritual ranked #24 in LinkedIn's top start-up companies of 2019.
  • It recently raised $25 million in funding for product innovation and research to expand its supplement catalog.
  • The company has sold over 1 million bottles of vitamins since 2015 and will expand its catalog in 2019.
COMPETITIVE ADVANTAGE
  • Ritual is the first vitamin supplement company to offer direct-to-consumer vitamins for women.
  • Their marketing model allows them to build a relationship with their customers through social media to answer questions, gather feedback, establish their brand, and purpose.
  • The product they create was designed by re-imagining the formulation of vitamins and revolutionizing the appearance of capsules, making it unique in the market.

3. CARE/OF

COMPANY OVERVIEW
SERVICES/OFFERING
  • Care/of offers a subscription-based service of vitamins that delivers the monthly doses to the clients for a price that ranges from $5 to $57 per month, depending on each person's needs.
  • The company has more than 30 vitamins/ingredients, including vitamin C, iron, milk thistle, B-complex, yeast probiotic, hair, skin, and nails Glow Trio pill, Rhodiola, calcium, astaxanthin, and fish oil, and more.
  • They also offer supplements, probiotics, and other wellness products.
  • In March 2019, they launched the lines of protein powders and prenatal vitamins.
BUSINESS MODEL
  • The company's business model is a subscription-based monthly vitamin package with a content based on personalization, honesty, and quality.
  • To subscribe, the clients take a quiz on their website to find out the vitamins they need and Care/of creates personalized packages based on these needs.
  • The quiz can generate more than one million combinations and even have supplements made for each person.
  • Every month, they deliver vitamins to their clients that are personalized to each person's health goals, values, lifestyle, and body's needs.
  • The packaging is personalized with each client's name, designed to be "Instagrammable." They focus on making vitamins attractive through its appearance, combining messages, daily Instagram challenges, quotes, and more in the packaging.
  • They work with social media influencers, beauty and fashion magazines, and blogs like Glossier, Cierra Fitzgerald's blog, Lauren Nakagawa's blog, and wellness influences like Angi Fletcher and Miko Bowen.
GROWTH INDICATORS
  • In 2018, they obtained $29 million in funding for additional research and innovation.
  • According to its founders, the company continues to expand, and the business' size doubles every month.
COMPETITIVE ADVANTAGE
  • Their presentation and marketing are innovative as they create people-friendly packages to motive customers to consume their daily vitamins, using smiley faces, customer names, messages, vitamins with colors, different shapes, and transparency, designed to attract the younger generation.
  • Care/of also offers a variety of vitamins and supplements for different needs and doesn't focus on one single target audience.
Sources
Sources