Despite seemingly unending critiques from the medical press, vitamins and dietary supplements remain a pillar of the consumer health industry. Stoked by a recent scathing editorial, arguments over the efficacy of common supplements have once again reached a fevered pitch. Regardless of their ability to prevent disease, few question the ability of supplements to captivate consumer interest and drive repeat usage, and in the face of ongoing criticism, producers are investing more than ever in new formulations and formats to keep consumers coming back.
Is Enough, in Fact, Enough?
While studies criticizing the benefit claims of vitamins and dietary supplements are nothing new, the editorial in December 2013’s Annals of Internal Medicine drew an unusual amount of coverage in the mass media. Titled Enough is enough: stop wasting money on vitamin and mineral supplements, the editorial points to three large-scale trials that showed supplements – including category stalwarts like multivitamins – provide “no beneficial effect… on all-cause mortality, cardiovascular disease, or cancer.” While trade groups like the Natural Products Association were quick to defend their beleaguered products, the ensuing public dialogue – including reporting in popular media outlets like CNN and CBS News – was largely sceptical.
However, the question remains: what, if any, impact does negative press have on consumer behaviour? Previous high-publicity trials, such as the late 2011 Iowa Women's Health Study that pointed to higher mortality risks in female supplement users, seem to have had relatively little impact on sales. According to the Centers for Disease Control, over half of all adult Americans consume dietary supplements, and supplements are commonly used and recommended by healthcare professionals. In the US, sales of vitamins and dietary supplements grew consistently from US$19.7 billion in 2009 to US$24.6 billion in 2013, according to Euromonitor International’s latest data. Globally, the category accounts for a staggering US$84.4 billion in sales. Decades of public education focusing on the importance of nutrition, combined with a relatively lax regulatory environment vis-à-vis advertising claims, vitamins and minerals have become synonymous with healthy living in the US. As such, many consumers are fairly blasé regarding negative headlines, particularly given the increased celebration of supplements in popular mass media outlets like the television shows Dr. Oz and The Doctors.
Sales (US$, RSP) of Leading US Vitamins and Dietary Supplements Categories
Source: Euromonitor International
New Formats and Formulations Drive Consumer Interest
While there is a clear polarization among consumers – with cost-conscious commodity buyers on one end and value-focused, well informed buyers on the other – in general, supplement consumers in developed markets are becoming more sophisticated. As a result, companies – including customer-centric consumer packaged goods giants like Procter & Gamble and Reckitt Benckiser, which have both recently invested in the category – are increasingly focusing on more targeted formulations. General health claims are becoming less common, even in everyday supplements like multivitamins, as producers focus more on particular health concerns. According to Euromonitor’s most recent dietary supplements by positioning analysis, less than one-fifth of the US$12.5 billion worth of dietary supplements sold in the US in 2013 were positioned around general health, and heart health, digestive health, energy, and eye health positionings have all gained ground in recent years. The situation is more pronounced in the US$4.9 billion multivitamins category, where nearly all products sold are tailored to a specific gender or age range – with multivitamins positioned for the elderly growing particularly quickly, as producers capitalize on growing interest in “active aging” among the massive Baby Boomer generation – and major producers are increasingly expanding into condition-specific multivitamins, such as Pfizer’s Centrum Specialist line (launched in late 2011 alongside the new dietary supplement line ProNutrients).
US Dietary Supplement Sales by Positioning in 2013
Source: Euromonitor International
Format experimentation has also proven successful in expanding sales. While gummy vitamins like Bayer’s Flintstones paediatric VDS brand have been around for decades, the format has enjoyed a renaissance in the last five years, as major brands like One A Day (Bayer) and Nature Made (Otsuka) increase their offerings for adults. The future for gummy vitamins – which generally feature fewer nutrients and higher unit prices than traditional pills – looks bright, as evidenced by Church & Dwight’s late 2013 announcement that it planned to increase production of its Vitafusion and Lil’ Critters gummy vitamin brands (which it acquired for US$750 million in 2012) by 75% by the first quarter of 2015. Beyond gummies, producers are investing in a variety of formats beyond pills, including sublinguals and melts, dissolvable powders, mini soft gels, and shot-format drinks.
Alternative Format VDS Products in the US
Regardless of their efficacy, vitamins and dietary supplements are a mainstay in most American households and are expected to experience continued strong sales growth in the future. Given the growing shift toward active health management in the general population and the industry’s pervasive advertising, negative headlines and the whole foods nutrition movement are not expected impact the world’s largest VDS market in the short-to-mid-term.