Natural Foods Merchandiser

Supps contribute billions to national economy

A new study funded by the Natural Products Foundation reports that not only is the dietary supplements industry growing at a rate that outpaces inflation, it also kicks in more than $60 billion a year to the American economy.

Supplements generate more than $20 billion in annual consumer sales, but the industry's overall economic contribution goes well beyond the direct purchase of goods, according to The Economic Impact Report. The study, conducted by Dobson DaVanzo, a Washington, D.C.-based economic research firm, is the first to quantify the supplements industry's total financial bearing on the national economy. It considers multiple tiers of contributing factors, including supply, production, research, direct employment, manufacturing and taxes, as well as long-term financial effects.

"Most industry assessments typically focus on retail sales. Realistically, though, sales are really just the tip of the iceberg," said Tracy Taylor, NPF executive director. "The labor, materials and technology necessary to move any product from staging grounds to the final sale trigger a cascade of economic consequences. Consider, for example, that the dietary supplement trade generates enough activity throughout production and sales to support over 450,000 jobs, and that industry concerns paid more than $10 billion in taxes in 2006."

Moreover, the report notes that the supplement industry's influence is expanding, growing at a rate that exceeds inflation. While health care providers are usually given a "market basket" increase of between 2 percent and 3 percent to account for medical and other price hikes, the supplements industry is steadily growing at a rate of more than 5 percent per year.

"Not only does the dietary supplement industry represent an important and growing component of the U.S. economy, it is interconnected in essential ways with many other industries," wrote the study's authors. "For example, the dietary supplement industry contributes to output (or spending) in other industries, such as retail and wholesale trade; real estate, rental and leasing; finance and insurance; professional, scientific and technical services; and manufacturing."

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