Foreword to SupplySide West 2017 issue

Euromonitor: Global forces influencing vitamins and dietary supplements

Vitamins and dietary supplements consumption has increased due to a variety of factors incentivising prevention, including global movement away from hospitalisation and the search for more affordable healthcare services to a growing ageing population.

Within sales channels, while e-commerce sales are growing in double-digit terms in many markets, health stores and drugstores are developing wellness spaces and health- monitoring kiosks, supported by merchandise highlighting the health bene ts of vitamins and dietary supplements.

Technology is influencing the entire vitamins and dietary supplements industry due to developments in medical devices, personalised vitamins and dietary supplements 3D printing, mHealth apps, AI and an empowered mConsumer (mobile consumer) who is more informed by the internet.

Move to prevention increases consumer expenditure on vitamins and dietary supplements

Consumers have increased their expenditure on vitamins and dietary supplements since 2011. North America, Australasia and Asia Pacific saw the highest increase in vitamins and dietary supplements purchases, thanks in part to greater awareness about healthy ageing and the broader availability of products with specific positioning around functional health claims.

Source: Euromonitor International

Latin America increased consumption as many direct sellers invested heavily in the region to promote vitamins and dietary supplements and their business opportunities, while Latino consumers are increasing their interest in healthy living.

In the Middle East, high prices of imported products still limit the affordability of vitamins and dietary supplements in some countries. However, local firms are starting to partner with international companies, which is already reducing prices and increasing local supply.

Affordability and distribution of vitamins and dietary supplements in Africa continues to be a challenge. While some imported brands focus on rich Africans, and local producers are succeeding at targeting the growing middle class and urban population, one of the main distribution channels catering to much poorer populations remains humanitarian governmental clinics and non-governmental organisations.

Quality control around ingredients grows within regulatory agencies

Contamination and adulteration of vitamins and dietary supplements remains a global concern. While increasing efforts by regulatory agencies to stay more alert regarding safety, product recalls, unsupported claims, revoking manufacturing licences, and taking legal action when necessary, the vitamins and dietary supplements industry is not as regulated on the whole
as the over-the-counter (OTC) industry. Unfortunately, this has contributed to an increasing number of contaminated supplements in the marketplace. These pollutants have included steroids, prescription drugs and toxic ingredients among others, and even developed economies with stricter regulation are not immune from this issue. Regulatory agencies are paying more attention to health claims and it is expected the industry is becoming more regulated in terms of manufacturing, ingredient suppliers and claims.

Vitamins and dietary supplements growth strong in e-commerce and direct selling

Non-store retailing is driving vitamins and dietary supplements growth, steadily increasing its share to account for 41% of global sales in 2016, according to Euromonitor International.

While direct selling represents over half of non-store retailing sales, the main driver of this growth is the surge in vitamins and dietary supplements internet retailing in China, which jumped from 4% of sales in 2011 to 24% in 2016 (reaching USD4.5 billion). Direct selling, meanwhile, has been most successful in Latin America. Direct sales in Peru for example went from 26% to 42% and in Ecuador from 22% to 32%, according to Euromonitor International.

Store-based retailers, such as pharmacies and drugstores, have introduced a growing number of private label vitamins and dietary supplements brands brands and created store areas devoted to vitamins and dietary supplements items while also growing their online sales.

Meanwhile, some healthcare specialist retailers are reviewing their strategies. GNC is facing difficulties due to consumer migration to mass and digital channels and price competition from other internet retailers, compounded by negative publicity stemming from the New York Attorney General’s 2015 investigation that found the company selling tainted and mislabelled supplements. In 2016, GNC began reviewing its strategic options, including a potential sale of the company to Chinese buyers.

mConsumer growth and customisation within vitamins and dietary supplements

In a world where mobile internet subscriptions are projected to expand from 3.9 billion to 7.6 billion from 2016 to 2021, the new mConsumer will rise in tandem with mobile connectivity, as well as smarter vitamins and dietary supplements products and regulations. While the mConsumer is increasingly using apps to monitor health and wellness, vitamins and dietary supplements firms are trying to better connect with this consumer by providing them with customised products.

Meanwhile, regulations are also changing and getting smarter. In 2016 the FDA, for example, approved for the first time a 3D printed supplement and is trying to rapidly adapt its regulations to new products that did not exist before, including apps that are now classified as medical devices and a potential pre-check system to speed up processes.

These new consumers’ needs are evolving rapidly and revolutionising the industry, especially in more developed markets. Simply put, this is changing the way vitamins and dietary supplements companies communicate with consumers. From new mHealth apps and the rise of health start-ups to 3D printing of pills and artificial intelligence (AI), the vitamins and dietary supplements industry and its regulations will need to work overtime to keep up with these changes.

Ms Carolina Ordonez Consumer Health Analyst Euromonitor International
Carolina Ordonez is a Consumer Health Analyst at Euromonitor International. She brings several years of work experience as a researcher, consultant, and speaker; having helped firms with strategy planning and business expansion throughout the Americas. In her current role, she provides insights on the latest trends in consumer health, including over-the-counter drugs (OTC), vitamins, dietary supplements, sports nutrition, and weight management & wellbeing products. She holds a Master’s degree in International Management from University of Exeter in the UK.

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