Consumer and market trends for botanicals

Consumer and market trends for botanicals

Market research reveals many ripe opportunities in the herbal marketplace, along with some challenges, which can turn into opportunities with a complete understanding of consumers and the marketplace.

Women and younger generations are generally more likely to consume herbal supplements and are increasingly looking for new forms like liquid and chewable instead of more traditional forms like pills and capsules, according to Steve French, managing partner of Natural Marketing Institute (NMI).

"The botanical/herbal marketplace presents many opportunities, yet some challenges also exist," French said. "However, these challenges can turn into opportunities if you have a complete understanding of the consumer and the marketplace."

He highlighted several trends in the herbal products market during a presentation at AHPA's annual member meeting on March 6 at Natural Products Expo West in Anaheim, Calif.

Growth in supplement use
The recent economic downturn helped increase American adults' herbal supplement usage, according to French. Today, roughly 36 million U.S. adults use herbals, a 33 percent increase since 2011. In fact, thirteen percent of herbal supplement consumers said they increased their supplement usage during the downturn in the economy - a reflection of increased self-responsibility combined with a decrease in the trust in conventional (treatment-focus) healthcare. French highlighted several factors likely contributing to this increase, including:

  • Consumers taking more responsibility for their personal health
  • Growing concern about prescription medications, including side effects, interactions and increasing co-payments
  • Youth-centric trends prompting consumers find ways to prevent aging
  • Aging population growing rapidly increasing based on cases of age-related conditions like heart and joint issues
  • Alternative supplement formats are expanding into the mainstream

However, French noted that the economic downturn had the opposite impact on the number of new herbal supplement launches. The number of botanical or herbal supplement launches generally grew between 2002 and 2008 when launches peaked at 319. Since 2008, there has been a general decline in the number of launches and recent years have seen roughly 100 launches annually.

The number of consumers who believe in the importance of herbal supplements for health maintenance is also increasing. In 2013, 23 percent of consumers said that taking herbal supplements is important to maintain a healthy, balanced lifestyle, up from 17 percent in 2011.

French noted that women and younger generations are more likely to use herbal supplements. Not surprisingly, younger generations are more likely to view herbal supplements as safe and effective.

Those who consume herbal supplements are also more likely to consume other supplements, according to French. On average, herbal users use roughly five different supplements daily compared to other supplement users who average three different supplements daily and vitamin/mineral users who average four supplements per day. 

"Herbal product consumers are an extremely valuable consumer of the total supplement market - they are the leaders and trend predictors of opportunities that lie ahead," French said.

Herbal market opportunities
French said that in 2012, 44 percent of herbal supplement consumers preferred to get their supplements in other forms, up from 29 percent in 2007. The fastest growing supplement forms are soft chew, liquid, soft gel and chewable while capsule, tablet and dissolving tablet forms have generally remained stable.

A growing number of herbal supplement users also say they are more likely to buy dietary supplements that use sustainable or environmentally friendly ingredients. In 2013, 56 percent of herbal supplement users said they are more likely to buy sustainable products, up from 38 percent in 2009.

French stressed that consumers generally use herbals in reaction to a need and are less likely to use them proactively. He said that ingredients that address the following issues offer the greatest opportunities:

  • High blood pressure
  • High cholesterol
  • Heart disease
  • Lack of energy/fatigue
  • Joint pain/stiffness
  • Arthritis
  • Acid reflux/heartburn
  • Cold and flu
  • Seasonal allergies

He also noted that some health prevention concerns are much higher for herbal supplement users and products addressing these issues, based on unmet needs, also provide good opportunities:

  • Arthritis/joint disease
  • Focus/concentration problems
  • Osteoporosis/bone health issues
  • Lowered immunity
  • Intestinal irregularity

"Companies looking to innovate should consider combining a new product format with the unmet need states that are of concern to consumers," French said.

Herbal product companies can also capitalize on the diversification of channels that consumers are using. "Today, consumers buy herbal products from many different places," he said. "It isn't just about retail."

Mass merchandizers (e.g., Walmart, Target) are the most common channel used to purchase supplements with 48 percent of herbal supplement consumers purchasing supplements through this channel. However, consumers are increasingly using other channels to purchase these products. Other channels consumers use, include: internet (45 percent); catalog/mail order (39 percent); grocery store/supermarket (34 percent); drug store/pharmacy (32 percent); television (30 percent); warehouse/club store (27 percent); healthcare provider/doctor's office (27 percent); other nutrition store (26 percent); General Nutrition Center (GNC) (22 percent); natural food market (20 percent); health club/gym/spa (16 percent); at home/multi-level (16 percent); and convenience store (15 percent).

Herbal supplement consumer concerns
French said that herbal supplement companies can also capitalize on growing consumer concerns like ingredient sources and ecologically friendly products. In fact, more than 80 percent of herbal supplement consumers said that knowing the source of supplement ingredients and whether ingredients come from natural sources are important factors in their purchasing decision. In addition, nearly 70 percent said that organic ingredients are an important factor and roughly half look for vegetarian products.

Herbal supplement users have also expressed concern about the nutrient absorption of supplements. Half of supplement users and 56 percent of herbal users said that they are concerned their body "doesn't absorb enough of the nutrients the supplements are supposed to provide." French said that this suggests an opportunity for companies to capitalize on the bioavailability platform.

Herbal users are also more concerned about correct dosages. A third of herbal supplement consumers indicated that they are concerned supplements may contain a higher level of nutrients than what is on the label compared to only 23 percent of all supplement consumers. Similarly, 43 percent of herbal supplement users are concerned that there is a lower level of nutrients compared to 33 percent of all supplement users.

Confusion about herbal products
French said there is a lack of understanding about what herbal supplements actually are. Only 15 percent of consumers use herbal products, but 35 percent say they use herbal supplements because of this confusion - think of Herbal Essence Shampoo. This presents an opportunity to increase consumers' understanding of herbal products, according to French.

"There needs to be consistent messaging about what an herbal product actually is, the distinct benefits that they provide, and how they can be integrated into consumers' lifestyles," he said.


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