Estimated to be worth $6.5 billion (around €5.2 billion) in 2005, the growth rate is expected to peak at 4.4 percent over the next year, then drop to a steady 4.1 percent for the subsequent five years.
By 2011, the market is predicted to be worth around $8.2 billion (€6.6 billion).
But this growth will not come about through plan sailing, according to a report from the market researcher.
It anticipates that the industry will have to grapple with the effects of regulatory curbs on health claims without thorough scientific evidence, the positive list of ingredients and the limitations this may present on innovation, and the 2001 and 2002 European Directives which may make it difficult to achieve product innovation.
Moreover functional foods, the fastest growing sector of the food industry, share many of the same aims and outcomes as supplements.
There is a danger that these may detract from the traditional supplements industry.
Nonetheless, certain factors are conspiring to make the coming period one of opportunity.
In particular, ageing populations are eager for products designed to help prevent certain health conditions, and they are stimulating demand for health products.
The Frost & Sullivan report takes a close look at five health platforms for supplements: bone health; gut health; heart health; immune health; and mental health.
Consumers nowadays have a far greater understanding of disease prevention and ingredients used in dietary supplements, and are increasingly willing to self-medicate.
Not only is this spurred by rising healthcare costs, but throughout Europe, medicines previously available only on prescription are also being deregulated to be available over the counter.
Balancing this, however, is a drive for natural products and positive consumer attitudes towards dietary supplement products.
The report makes several important recommendations for supplement companies wishing to take advantage of these positive trends, without the challenges standing in their way.
One of the most important points for companies manage their media.
At a time when consumers are bombarded with often contradictory health information, they can easily become confused.
It is down to the company, therefore, to ensure that the right information is received about their product.
"The transfer of information to the consumer is a key driver for growth in the European dietary supplement markets," said Frost & Sullivan research analyst V. Meenakshi Sundaram.
"Manufacturers need to take a proactive approach in dealing with issues related to negative press coverage and enhance customer awareness by promoting credible scientific research on the benefits of dietary supplements."
It also says that undertaking thorough tests of their products and ensuring they have solid scientific backing can help prevent consumer confidence ebbing away - as well as to meet high safety and efficacy standards.
Where segments of the population are identified as "high potential", such as the ageing population, manufacturers should develop marketing strategies and position themselves so as to be attractive to them.
Moreover, they need to make sure their products are readily available to consumers wherever and whenever they want to buy them.
That means supplying them through mass-market channels such as supermarkets, rather than just relying on health food stores and pharmacies.
Finally, Frost & Sullivan makes suggestions on how to deal with the entry of low cost Asian manufacturers into the market, and European outsourcing to the Far East: "Mergers and acquisitions among existing market participants will increase the bargaining power of manufacturers, enabling them to take advantage of the economies of scale," said Sundaram.
External links to companies or organisations mentioned in thisstory: Frost & Sullivan