Has the message of preventive healthcare finally sunk in? Research by the Natural Marketing Institute (NMI) points in that direction and provides further insights for manufacturers interested in the consumer mindset on the role of supplements in maintaining good health; it also offers observations on the supplement marketplace as it stands today.

Earlier in 2013, NMI concluded the most robust and comprehensive study of U.S. consumers regarding the use of nutritional supplements as well as over-the-counter (OTC) and prescription medications (Rx). The research, known as the SORD (Supplements, OTC, Rx Database) study, indicates the majority of consumers are taking more responsibility for their health now compared to 10 years ago and three-quarters believe taking a vitamin/mineral/herbal supplement every day is important to their overall health.

Drivers of Increased Supplement Use

Figure 1 shows the increase in consumers who are taking more control of their health is true of both the general population as well as supplement users and, interestingly, is most pronounced among younger consumers, both millennials and generation X.

Figure 1: Percent of U.S. consumers indicating they are taking more responsibility for their health compared to 10 years ago; NMI SORD 2013.

Supplement usage also is trending upward. In 2013, 73 percent of the general population reported using a supplement within the past 30 days, an 18-percent compound annual growth rate (CAGR) compared to the 62 percent who reported use of supplements in 2009. This increased use of supplements may be tied to a previously identified larger trend of self-responsibility" taking a foothold in American culture based on a plethora of factors.

More than half of supplement users agree that they are concerned upcoming changes to healthcare policy will adversely impact their ability to get the care they need. This sentiment is higher among the older generationsboomers and maturesbut moderated by a mindset that limits openness to alternative approaches.

Overall, multivitamins/minerals are the most frequently mentioned type of supplement used, although there are many fast growers in the single vitamin and other" categories of supplements, including vitamin D, fish oil, probiotics, vitamin B12, omega 3 fatty acids and fiber supplements.

However, compliance is always an issue. Consumers have various reasons for lapsed use of supplements. While some are difficult to counteract, i.e. I got tired of taking them" or No longer trying to manage the health issue that I was taking this product for," other barriers may be within the control of manufacturers, including cost. The supplements most often discontinued due to expense included SAM-e, krill oil, coenzyme Q10, antioxidants, vitamin B1, whey protein, açai, glucosamine/ chondroitin, iodine and lycopene.

Furthermore, consumers have also retained some of the price sensitivity wrought by the recession: 53 percent still say that they purchase fewer supplements overall due to the downturn in the economy, and 43 percent say that economic conditions motivated them to purchase less expensive supplements. On the other hand, NMIs research has observed positive trends in two sentiments this year that signal improved compliance with a daily regimen and higher trial of new supplements. Overall, industry numbers show continued growth.

Demand is Up, But What About Supply?

Although market growth is clearly evident, the number of U.S. supplement launches has dropped from highs seen in 2008 and 2009. The decline in launches remains well below the 10-year average of 933 new supplement product launches per year, suggesting caution in the market.

Figure 3: Number of new product supplement launches in U.S. from 2003 through 2012 (Calendar Year); Source: NMIs Product Attribute Trend Identifier (PATI)/GNPD).

Based on NMI research, despite the stated concerns about expense, supplement purchasers are spending about the same amount per month on supplements$27 on average per consumer over the past three years. Monthly consumer spending has likewise remained stable for OTC products (at about $21 per month) but has declined for prescription medications within the same timeframe (from more than $50 on average per month in 2011 to just under $42 per month in 2013).

Considering the decline in the number of new product launches combined with decreased spending on pharmaceuticals, supplement manufacturers may find the market ripe for innovation. In addition to competitive analysis, manufacturers should continue to consider the needs of the consumer based on the type of health conditions they are managing. For example, more than half of consumers who are experiencing a lack of energy or mental focus issues use supplements, while relatively few use prescriptions or OTC remedies to address these issues. Consumers with high blood pressure, high cholesterol, sleep issues, arthritis or stress are more likely to use prescriptions to manage their conditions that either a supplement or OTC preparation.

Earlier on in the recession, consumers made adjustments to their spending and altered their product use across many CPG categories. These adjustments created a shake-out" in the market among supplement manufacturers as measured by a substantial drop in the number of new product launches. In the last three years however, average monthly spending on supplements has remained stable while continuing to decline for pharmaceuticals. Concerns about the future of healthcare, especially in the U.S. with the advent of the Affordable Care Act, loom large. Supplement manufacturers responsive to consumer needs and competitive in terms of efficacy and safety have a distinct opening to catch the market on the upswing with prevention-oriented products that offer alternatives and tools to preserve good health.

Steve French is managing partner at Natural Marketing Institute (NMI) is a strategic consulting, market research and business development company specializing in the health and wellness marketplace.

See Steve French at SupplySide West in the presentation "Consumer Trends on the Impact of OTC Products and Rx on the Dietary Supplement Market."