During the American Herbal Products Association’s AHPA Botanical Congress this week, experts discussed strategies for keeping the supplement industry’s growth going.
New reports from Nutrition Business Journal confirm the impressive growth of the U.S. dietary supplements market in 2020 amidst the COVID-19 pandemic. During a panel discussion at the American Herbal Products Association’s (AHPA; Silver Spring, MD) AHPA Botanical Congress this week—the first time the event’s been held virtually—industry experts discussed strategies for ensuring that the sales gains supplements saw last year do not trail off after the pandemic is over.
Nutrition Business Journal Reports Growth
Presenter Claire Morton Reynolds, senior industry analyst for Nutrition Business Journal (NBJ), reported NBJ’s updated, “hot off the press” assessment of “record” U.S. supplement sales in 2020—specifically, an increase of $7.08 billion in 2020, reflecting 14.5% growth. This took the U.S. supplement market’s valuation to a total $55.75 billion by the end of 2020. Morton Reynolds pegged 2020 as the largest year of growth ever seen for the industry. “For context,” she said, “in the previous five years, we’ve been adding between $2 and $2.5 billion each year, so that really resonates how much it is to add $7 billion in a single year.”
NBJ predicts that the U.S. supplement industry will in fact see a lasting, “permanent lift” in annual sales for years to come, said Morton Reynolds, outperforming pre-COVID estimates of the market’s trajectory. For instance, by 2023, supplement sales are expected to be $1.4 billion higher than they would have been expected to be before COVID-19. By 2024, NBJ estimates the U.S. supplement market will be valued at $66.24 billion—a $10 billion growth from 2020.
Don’t expect the same record 14.5% growth rate seen in 2020 every year, though. “We can’t maintain 14% every year,” Morton Reynolds said. “[W]e do expect to see a natural slowing in growth.”
Regardless of any slowdown, the good news is that sales aren’t predicted to decline anytime soon. Said Morton Reynolds, “[W]e’ve boosted the industry permanently past that $55 billion mark, in our eyes.”
Which supplement category sales grew the fastest in 2020? Vitamins led the pack at an astronomical 22.3% sales growth—not surprising considering the enormous spike in media attention and product demand that vitamins like C and D experienced during the pandemic, she pointed out. The growth in herbal and botanical sales in 2020 was equally impressive, at 17.3%. Morton Reynolds noted that herbal supplement sales still grew—especially for immune-health botanicals like elderberry, mushrooms, and echinacea—even despite 6% declining sales of hemp cannabidiol (CBD) last year.
Mineral sales also grew, by 11.4%. Specialty supplements, a category which includes ingredients like pre- and probiotics, omega fatty acids, collagen, CoQ10, and melatonin, grew by 12.0%. Meal supplements sales grew at 5.4%. Sports supplement sales, however, stayed flat, with growth in 2020 of 6.6% compared to 6.5% in 2019.
In terms of sales channels, e-commerce sales are expected to more than double between 2019 and 2024, NBJ predicts. By 2024, e-commerce sales should be pretty equal (at 24%) to sales from the natural/special retail (25%) and mass market (25%) channels. “It’s not news to say e-commerce was growing, but the pandemic really accelerated this,” Morton Reynolds said. She added, “We see online shopping as one of the more permanent shifts in consumer behavior specifically around supplements.”
Morton Reynolds also touched on leading health condition categories in 2020. To no surprise, cold/flu/immunity streamed ahead of all other conditions, with sales growing 51.2% in 2020 to $5.2 billion. But other conditions also saw sales growth. The next best performers, in order from greatest to lowest growth rates, were: sleep support, mental health/mood/stress, general health, men’s health, women’s health, diabetes, heart health, healthy aging, children’s health, and gastrointestinal health. The categories that saw stagnant or negative growth rates were eye health and sports/energy/weight management.
Morton Reynolds called immune health a new “gateway” into supplements for first-time supplement users. “Now, we’re really seeing immunity has risen up, along with general wellness, as the gateway into supplements for consumers,” she said.
Will the immunity boom continue post-COVID? NBJ predicts consumer interest will continue beyond 2021, particularly in ingredients like pre- and probiotics, mushrooms, elderberry, cranberry, blueberry, and vitamin D.
Mood and mental health is another category to watch closely. NBJ estimates that sales in this category grew 30% in 2020 and will continue to rise through at least 2023, led by ingredients like hemp CBD, multivitamins, homeopathics, 5-HTP, magnesium, and St. John’s wort. “We just see that consumers are increasingly understanding the inner play of mood, mental health, stress, sleep, immunity, and wellness,” said Morton Reynolds.
How to Make Growth Last
Other panelists discussed how to keep existing customers and new customers interested in supplements once their acute focus on health maintenance wanes post-COVID.
Graham Rigby, chief innovation officer for direct-to-consumer supplements company Care/of, said, “Now, we ask the question: How do we retain these new consumers, and how do we consolidate this growth and keep everyone who discovered the benefits of health and wellness, dietary supplements, and herbal supplements…to keep them in their life [and] make them part of their lifestyle going forward?”
One of his tips is to keep the “conversation” about health alive with consumers. During the pandemic, brands who made themselves available to answer consumer questions from a public desperate for health information became a resource. “A lot of brands did a great job of starting a conversation during COVID,” he said.
That type of education and outreach should continue after the pandemic, he advised. “There may not be the dark consequences of the pandemic about, but there are things that consumers are interested in—stress, mood, focus….Those things will live on—unfortunately, beyond the pandemic—and there are ways for herbal products to intervene in a positive way. So, don’t lose sight of that connection or relationship with your consumer, and continue to use all of the different avenues that you have with which to have that conversation going forward.”
Encouraging consumers to establish and maintain supplement routines will also be key, he said. “[W]e want to encourage people to continue to make dietary supplements part of their health and wellness regimen,” he said. “How can you encourage these habits?” For instance, he said, his company developed an app to support customers’ health routines.
The idea is to get consumers to keep thinking big-picture about their health, he said. “How can you be on a health journey rather than just selling them product? And when you’re doing that, don’t just think about how your product is going to impact them, but think of giving them tips and advice that go beyond the particular herbal supplement or dietary supplement you might be selling them. Oftentimes, we want to use all of our marketing techniques and levers to just reinforce how great our products are, but truth be told, if you can get someone to meditate, exercise, and hydrate, in addition to taking your product, chances are your product is going to collectively work better with all those health interventions…And so encouraging this routine, this thinking, [and] allowing them ways to measure each day how their commitment to their health and wellness is continuing is going to be really important because once we return to normal, we know that it’s harder to get in the habit and it’s easy to fall out of healthy habits. So, how can we continue to encourage people to maintain this self-care that they’ve optimized during the pandemic in a non-pandemic world?”
Also, he asked, “What can you do to remind them that these [supplements] are not drugs, that these products don’t work instantaneously overnight, and that continued, repetitive use is the way to maximize the benefits from herbal supplementation and consumption?”
Staying visible with consumers is critical, seconded another speaker, Amy Summers, public relations expert and founder and president of Pitch Publicity and INICIVOX. Optimizing public relations was especially important during COVID, she said, as it helped companies stay front-of-mind with the public. Public relations will be integral moving forward to helping brands stay relevant, and she encouraged companies to be consistent with messaging and to continue to “do good” to emphasize how they are giving back. “Many times,” she said, it’s the relationships built through public relations “that create the biggest return on investment…especially during any time of crisis, downturn, transition, or change.” If you put a pause on public relations, she cautioned, you lose the consistency of educating the public and connecting with them; you lose momentum.
It’s also a good time to encourage new customers to try other types of dietary supplements. “Often, people come in with an onramp product like a multivitamin or a fish oil but suddenly can be convinced to take a second product,” Rigby pointed out.
Thankfully, Summers said that the pandemic has helped the supplements industry capture a new generation of consumers. “From my perspective, I think we broke the age barrier with this pandemic,” she said, noting that Gen Z customers, college-aged consumers, are now using supplements.
Finally, Rigby said, in order to reach consumers on all fronts now, social media and beyond, brands need to ensure they’ve maximized their digital outreach and e-commerce capabilities. “If you have put off any of your optimization of your online marketing, of your web presence, of your page design, your layout, if you don’t have videos or compelling content, get it done now, because this is not going away," he warned.