The vitamin and dietary supplement market will continue to grow despite increasing sector maturity, driven by increased consumer interest, ageing populations and a greater emphasis on self-care, suggests a new report by market analysts Euromonitor.
Some aspects of consumer behaviour are consistent across developed markets, as underlined by the Medical Research Council in the UK. Dr Beckie Lang cites the 'worried well' - people in higher socio-economic groups who actually eat well, yet consume more vitamins and health foods than any other group despite needing them far less. Conversely, lower socio-economic groups need more and take less: health-enhancing products bring them relatively greater benefits.
Globally, child-specific multivitamins, currently demonstrating a CAGR (compound annual growth rate) of 3 per cent according to Euromonitor, are a typical 'worried well' purchase. More expensive brands such as Sanatogen and Centrum are more often bought by middle and high socio-economic groups, even though they do not necessarily get the greatest nutritional benefits from them. This compares to consumers identified as having 'nothing to lose', with diets so devoid of nutrition that on balance purchase and consumption of any vitamins and dietary supplements can have no waste - such as doubling-up on vitamins from a balanced diet.
According to many health and dietary experts, there are distinct need groups in the UK as in other markets, particularly among the old and young. For example, some older people will always need vitamin D, just as some young girls will need iron or calcium. The global market for calcium products is the fastest-growing of any individual dietary supplement, with a CAGR of almost 4 per cent, while in the US and UK this figure is 8.6 and 7.6 per cent respectively, although this strong growth is slowing in 2002. The market for dietary supplements in the UK is also showing strong growth with sales of brands such as Seven Seas rising at around 3 per cent per year.
Comparatively, single vitamins (0.5 per cent five-year CAGR), are growing more slowly than multivitamins (3 per cent), which in turn are growing slower than dietary supplements (3.4 per cent). This is to be expected, however, because while multivitamins is an established market with reliable growth, the dietary supplements market is known for its high but intermittent growth as new deficiencies in consumers' diets are discovered.
In the US, the report claims the primary reason for growth has been an ageing demographic trend. Closely aligned with VDS expenditure, consumers are expected to increase their use of health products to compensate for the decline in age-related quality of life. More importantly, with increasing criticism of their poor diets, it is thought that North Americans have much to gain from the use of supplements.
Discount stores have also acquired market share from healthfood shops and drugstores, indicating growing VDS consumption among the wider US population. Although the market in the US is maturing, it is still due to grow steadily by over 2 per cent CAGR to 2006.
The Japanese VDS market is showing growth in 2002 double that of its 1.6 per cent CAGR over the last five years, ranking in value a close second behind the US. Higher volume sales of supplements, increased action of targeted media, and new classes of products, particularly child-specific variants, are driving demand, says the report.
It also notes that North American and European players are increasingly taking an interest in the market. Roche, Boehringer and Abbott have all made forays into Japan in the last year, potentially ushering the relatively isolated Japanese market to the global stage, and perhaps even setting the scene for a levelling-off of the heavy weighting towards tonics in Japan's OTC market.
As VDS information and products become more available, Eastern Europe is demonstrating good potential growth - rising health awareness and increased consumer focus on preventative medicine have contributed strongly to changes in market conditions in the region. The market is still following world trends: for example the high sales growth of VDS products targeted at children is set to continue next year, but will level off over the next five years, shadowing the huge US market.
In this context VDS manufacturers are looking to hold on to future givens - including the ageing and overweight - while targeting the affluent 'worried well' to put them at their ease, and ensure full vitamin and mineral quotas, reports Euromonitor.
Innovative, 'feel good' products that also have strong scientific evidence to support claims to consumers will be best equipped for survival in the premium VDS market, advises the report, while consolidating 'staple' supplements (for specific need groups such as folic acid for pregnant mums or calcium for young girls) into strong brand portfolios will be the best way to keep market share in the face of cheap, own-brand alternatives.