U.S. nutrition industry sales grew nearly $4 billion in 2002 to $58 billion, according to research recently published by Nutrition Business Journal (nutritionbusiness.com). Each year, through its own surveys of manufacturers and suppliers and analysis of more than 40 secondary sources, NBJ quantifies consumer sales in Dietary Supplements ($18 billion), Natural and Organic Foods ($14.4 billion), Natural Personal Care ($4.5 billion) and Functional Foods ($20.5 billion). Sales are also analyzed by six distribution channels: Mass Market, Natural Food & Specialty Retail, Multilevel Marketing, Mail Order, Practitioner and the Internet.
Much like the sputtering global economy, the nutrition industry sparked to life in some areas in 2002 (organic foods, calcium, magnesium, essential fatty acids (EFAs) and meal replacement powders) and caught a flat in others (herbs and glucosamine-chondroitin).
However, the nutrition industry once again achieved an overall growth rate twice that of the economy. Growth of 7-10% in natural & organic foods, natural personal care, minerals and meal replacement supplements balanced out less active supplement categories. In 2002, the bellwether vitamin category rebounded with sales growth of 2.5%, up from 0.8% growth in 2001. Herbal supplement sales declined in 2002, led by an aggregate $150 million decline in echinacea, garlic, ginseng, ginkgo biloba and St. John’s wort. Specialty supplement sales growth also slowed in 2002, due primarily to lower consumer prices in the glucosamine market, which represents nearly 30% of the category.
The ephedra controversy caused the most disruption to the nutrition industry in 2002-2003, placing supplements front and center in the debate over freedom of choice in self care – and leaving the Dietary Supplement Health & Education Act (DSHEA) more vulnerable to revision than at any time in its history.
Representing more than 7% of the supplement category, ephedra is the first supplement product of such significant sales to be proactively abandoned by leading supplement manufacturers. NBJ Editor-in-Chief, Grant Ferrier said, “Whatever executives’ personal views, for many, ephedra simply became too hot to handle.”
Fortunately, there were positive signs for the nutrition industry’s long-term future. Welcome macro-trends included interest by the U.S. government in making nutritional information more available to the public and in reducing health care spending through disease prevention. Blamed for billions in medical costs, obesity rates recently spurred a direct challenge by the Department of Health and Human Services to the fast food industry to review its role in this national scandal.
NBJ Research Director, Patrick Rea said, “Food corporations, fearing tobacco-style liability claims and seeking to offer better choices for health conscious shoppers, are keen to prove that they are part of the solution, not part of the problem.”
NBJ’s 8th Annual Overview of the Nutrition Industry features detailed market data charts, growth forecasts, NBJ's top 55 supplement companies and a strategic review of business trends in dietary supplements, natural & organic foods, and functional foods. This year’s overview features a special section on the retail sales channel featuring sales breakdown in over 200,000 retail outlets and analysis of club, drug & grocery stores, Wal-Mart, GNC, Whole Foods, Wild Oats and sports chains. Data includes NBJ's signature matrix of sales by category & channel in 2002, category & channel sales data for 2000-2002 & 2003-2005 forecast, and detailed breakdowns in each retail channel.
For more information or a list of NBJ back issues, visit nutritionbusiness.com or call 619-295-7685 x12.