NBJ’s Annual State of the Industry Delivers the Good News and the Bad



Last week, amidst the clamor and excitement of the 2010 Nutracon Conference and Natural Products Expo West tradeshow, Nutrition Business Journal presented its annual State of the Industry session, where it shared some preliminary data and market predictions, and discussed the ins, outs, good, bad and ugly of the U.S. nutrition industry in 2009. The good news? Dietary supplement sales appear to have beaten expectations, growing an estimated 8% in 2009, one point higher than NBJ had forecasted the year before. Consumer anxiety experienced with the onset of the H1N1 virus fueled rising growth in immune supplement sales in the mass market channel, demonstrated by soaring sales of vitamin D, probiotics, vitamin C, children’s multivitamins and Echinacea. And an estimated return to double-digit growth in the practitioner channel suggests that consumers were willing to pay top dollar for supplement products from the health professionals they trust in order to stay healthy.

The bad news? Dietary supplements are no longer the bellwether for the entire nutrition industry, and can’t carry the whole market. Proprietary numbers show that declines in growth in the natural & organic foods & beverages and functional foods & beverages categories—which together account for 65% of the total nutrition industry—have pushed the growth rate for the total market down to 5%, an all-time low. In a tough economy consumers traded down to conventional products, taking natural & organic sales growth down several points, and a lack of new trends and new ingredients in the functional category drove functional sales down to 3% growth. The natural & organic personal care market also felt the bad news, as wary consumers were especially reticent about luxury categories, like organic cosmetics.

NBJ Bottom Line 

The ugly? Thankfully there is no ugly. Rather, NBJ remains optimistic that 2010 will offer the nutrition industry some relief from its economic hangover. The sales fallout in the natural & organic foods & beverages category may even prove helpful, by forcing manufacturers, marketers and retailers to adopt higher levels of fiscal responsibility—and to stick closer to their customers. Companies that stay near to the consumer will feel their growth rates rebound the fastest. And if functional food manufacturers reinvest in product development, and retailers stock up on new products, the recovery will begin.

And besides, 5% growth is still growth.

NBJ will provide a full summary of the nutrition industry, replete with comprehensive research and concrete data, in our June/July Industry Overview Issue. To order a copy or become a subscriber, please visit the NBJ Subscription Page.

Related NBJ links:

NBJ’s State of the Industry Presentations from Expo West 2009
U.S. Functional Sales Slow, but Category Outpaces Overall Food Sector in 2009
Two Up, One Down in a 2009 Supplement Firm Earnings Roundup

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