Will the astronomical sales gains of the past two years for dietary supplements, functional foods, and natural products carry into 2022? Or will sales begin decreasing to pre-pandemic levels?
When the pandemic first began pushing supplement sales to a pace never seen before, market researchers predicted that this tremendous growth would permanently elevate baseline supplement sales. They also cautioned, however, that at some point, growth rates would normalize.
Enter 2022. While it may be jarring to see—for the first time in a long time—negative growth rates in some categories, it’s important to maintain perspective. Simply put, the industry is still in a good place.
Take immune health supplements, undeniably the biggest gainer coming out of the pandemic. In our 2022 Ingredients to Watch cover story this year, data from market researcher and valued story partner SPINS (Chicago) show that, compared to 2020, sales of cold-and-flu supplement ingredients in the U.S. were not able to sustain elevated growth rates last year, with many seeing growth percentages drop by double digits in 2021.
But it’s far from doom and gloom for immune health supplements. When we look at U.S. ingredient sales data SPINS provided Nutritional Outlook back in 2019, right before the pandemic started, we saw vitamin C ingredient sales (excluding Ester-C) in the multioutlet (MULO) cold-and-flu category top out that year—again, prior to the pandemic—at $245 million. But at the end of October 2021 last year, vitamin C sales (not Ester-C) in the MULO cold-and-flu ingredient category—despite declining 10% between 2020 and 2021—were still a whopping $586 million.
That success might not translate to every category or ingredient. Moving forward, clearly there will be some winners who will continue reaping sales gains in 2022. In a December 2021 webcast hosted by private-label food supplements manufacturer PharmaLinea (Ljubljana, Slovenia), guest speaker Monika Szelążek, regional client executive for market researcher Euromonitor International (London), highlighted some of the global supplement industry’s most promising pockets of opportunity in the near term.
Sports nutrition manufacturers can exhale. While Szelążek notes that sports nutrition sales still declined last year, “this is a temporary situation, and we are predicting that those sectors will recover in the upcoming years. Forecasting growth for the next five years, we see that sports nutrition is the category that will grow the most in terms of dynamics.
Other supplement markets promising good performance are mental health, bone and joint health, beauty, eye health, sex health, and energy support. “It’s worth mentioning that eye health supplements are the ones which are supposed to have one of the highest CAGRs,” Szelążek added. In ingredients, global demand for glucosamine, probiotics, vitamin C, calcium, minerals, and eye health ingredients is projected to grow, she said.
In terms of global markets, most regions of the world are still seeing positive growth. Particularly impressive, growing by double digits, is Latin America, the Middle East, Africa, and Australasia, she said. Meanwhile, “The only exception is North America, where this year we’ve noticed a small decline of less than 1% growth. The reason for that is simple: last year, North America was the region with the highest growth year-on-year. It was almost 12%. This is why this small decline that we have this year is a natural consequence,” Szelążek observed.
Asia Pacific is still where the supplement industry should invest, as sales there currently represent almost half of total global sales of vitamins and supplements, Szelążek added. In fact, in the upcoming years, “it is expected that China will outperform the U.S.” in terms of supplement sales growth.
Sweet spots like these give the supplement industry a lot to look forward to. And even in categories seeing some slowing, the silver lining is that those shoppers leaving the category might simply be transferring their dollars elsewhere in the market—not leaving supplements entirely. For instance, those no longer still intensely buying immune health supplements might still be purchasing other types of supplements. “We have also noticed that consumers are shifting their interest from immunity-related products towards other health concerns,” Szelążek said, “which were ignored during the peak of the pandemic or which intensified during the lockdown.”
The new global enlightenment about prioritizing health, and the role that supplements can play, bodes well for industry. Although growth “will be likely to slightly slow down in the upcoming years, we believe that in the next five years, the whole category will continue on a steady growth of around 4%-5% each year,” Szelążek concluded. That’s something everyone can celebrate.
Author: Jennifer Grebow