Natural Foods Merchandiser

During hard times, dietary supplements pump $60B into national economy

Despite the current recession, the dietary supplements industry is growing, creating jobs and pumping $60 billion into the national economy, according to a new study cited by the Natural Products Association.

"If you take a dollar and drop in the pool, you come up with almost three dollars," said the study's author Joan DaVanzo of the health care consulting firm Dobson DaVanzo.

For every dietary supplements dollar spent, the economic contribution is $2.71. The industry also accounts for more than 1 percent of total U.S. health expenditures during the last 10 years, according to the report: The Economic Contribution of the Dietary Supplements in the United States.

The industry contributes about $60 billion to the economy through direct and "ripple effects," DaVanzo said. Directly, it accounted for $22.5 billion in 2006, the latest year statistics were compiled in the study. But DaVanzo said newer statistics indicate continued growth, as dietary supplements sales climbed 5.9 percent to $23.7 billion in 2007.

Because dietary supplements are produced by a large number of manufactures and distributed through a variety of channels, the supply chain involves a number of industries, including retail, agriculture and transport, delivery and warehousing. Those industries stimulate other jobs.

"It starts with suppliers and goes to natural products stores and online venders, so you can see the chain," DaVanzo said. "The net is $22 billion, but once it ripples through where jobs are related … the (dietary supplements) industry touches so many different industries."

Dietary supplements also provide the direct employment of nearly 200,000 people. Under the ripple effect, those jobs expand to more than 400,000 within about 100 different industries.

The study is the first of its kind to measure the economic ripple of the dietary supplements industry, an industry in which 80 percent of Americans buy vitamins and other supplemental health aids. DaVanzo said the growth can be attributed to the fact that as the population ages, people are taking a greater role in seeking out ways to remain healthy.

The industry also pays more than $10 billion in local and federal taxes.

David Seckman, executive director and CEO of Natural Products Association, is using the report in his discussions with state legislators, as well as members of the U.S. Congress, to show that the industry is an economic driver that shouldn't be over-regulated.

"With the health care reform debate going on, this information is critical," he said.

The study was commissioned by the Natural Products Foundation, a nonprofit that supports dietary supplement industry research and education.

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