July 13, 2017
When Natural Foods Merchandiser asked retailers to name their store’s top growth category of 2016, there was a clear consensus: More than one-third said the supplements sector was the most dynamic.
According to SPINS data, sales of herbal and homeopathic products shot up 13.4 percent over the 52 weeks ending March 19, 2017, to reach a market value of nearly $2 billion. Vitamins and supplements rose, too, growing 3.5 percent to notch about $12 billion in sales. All in all, SPINS reports 5 percent growth across the board, valuing the total supplements market at roughly $14 billion.
This uptick in sales is a direct result of several trends making waves in the supplement aisle. First, when it comes to herbs, formulas are at the forefront. SPINS reports that sales of herbal blends grew 22 percent over the previous year and accounted for much of the herbal category’s overall success. Why? According to research from Mintel, supplements that call out benefits, rather than ingredients, are top performers—and blends often meet this criteria.
Cindy Boyer, co-owner of Nature’s Garden Natural Foods and Shoes in Reading, Pennsylvania, believes that herbal blends carrying condition-specific claims allow consumers to find what they need more easily—and get results more reliably than if they formulated their own blends using single-herb products. “I don’t think it’s cost-effective today for a consumer to buy many different herbs to meet their needs,” says Susanne Fiori, Nature’s Garden co-owner. “It’s also inconvenient. Why open four bottles when you can open one?”
At The Whole Wheatery in Lancaster, California, supplement manager Cindy McClelland encourages shoppers to purchase herbal blends over single-ingredient formulas because, while store employees are certainly knowledgeable, they aren’t formulators or homeopaths. “A range of professionals work on those herbal blends to make sure each dose is therapeutic,” she says. “Plus, while curcumin alone may take down inflammation, you may need another ingredient to help with delivery or provide additional anti-inflammatory support. A blend will take those additional ingredients into account and remove the guesswork for shoppers.”
In addition to blends, supplements in the spotlight include turmeric/curcumin, with about 30 percent of retailers telling NFM that this was a top performer in 2016. Also, cannabidiol, or CBD, is emerging as a top supplement for anxiety and pain management. While McClelland isn’t surprised by the demand for anti-anxiety supplements overall (the National Institutes of Health reports that nearly 20 percent of Americans suffer from anxiety), the wave of interest in CBD has taken her by surprise. “Even though there are still some negative perceptions out there about CBD oil, it is doing better for me sales-wise than I ever anticipated,” she says. “It’s multifunctional, and people are getting good results from it.”
Other supplement sectors of note include probiotics, with 16 percent of retailers citing it as a top growth category, as well as bone broth and kombucha (13 percent).
One category on the decline is weight loss. According to SPINS, sales of supplements with a weight loss claim dove nearly 9 percent over the past year. However, retailers agree this is likely just a natural rebounding of the market, not a widespread comment on the efficacy or popularity of such supplements.
“When television doctors recommend a weight loss supplement, we see tremendous growth and can barely keep it in stock,” Fiori says. “But where there’s rapid expansion, there will be a contraction. It’s fun to ride the wave, but it isn’t sustainable at that level.” Therefore, retailers still see weight loss as a steady category, especially taking into account seasonal sales peaks in the new year and summertime. They find that shoppers are still generally interested, even despite the roller-coaster of fads.
Certification, application, dedication
One trend making a huge impact in the supplements department arguably migrated from the food aisles: organic and non-GMO certifications. Mintel reports moderate to high sales of supplements carrying organic claims, which is no surprise, says McClelland. “Supplements are [widely available] in the mass market, and an organic or non-GMO seal will set quality products apart,” she notes. “I’ve had shoppers actually pass up products because they weren’t USDA Organic. They walk out of the store. I’m working really hard to bring in more organic lines because of this.”
As for supplement formats, Mintel says gummy and other innovative applications are still in high demand, and consumers are increasingly intrigued by creative delivery methods like hard candy (64 percent of supplement consumers surveyed were interested) and fortified drinks that can be consumed throughout the day (61 percent were interested). Still, the top delivery formats among supplement users were pills that can be taken once a week (83 percent), dissolvable tablets (72 percent) and mints (65 percent). Clearly, convenience is king.
That said, supplement consumers haven’t yet adopted the ultimate convenience: delivery box, subscription or automatic refill services, which are wildly popular in other categories from produce to personal care. Mintel research found that just 17 percent of supplement consumers were interested in a consistent regimen through the use of such a service. The firm took this to mean that supplement consumers just aren’t committed enough to sign up for months-long regimens—but supplement retailers have quite a different view.
“I think that figure actually implies the opposite: that consumers are quite committed,” McClelland says. “They are committed to our store. They don’t want to take out that personal component. They want to interact with us, ask us questions and see what’s new.”
Boyer and Fiori have a similar take: Their customers are very committed, both to a lasting regimen and to Nature’s Garden. As proof, shoppers will stock up on a year’s worth of supplements—everything from multivitamins to joint health offerings—during the store’s anniversary sales because they know they’ll use these products. Fiori estimates that the average shopper haul during the three-day sale amounts to $500. “When people line up at the register with a dozen jars, we know they’ve made the commitment,” she says.
“If you’re getting your supplements delivered, you don’t get to engage or learn if there’s something better out there,” Boyer adds. “You can’t switch. There’s no dialogue. There’s no human element. To me, this finding is actually encouraging; it indicates that people want to be engaged.”
Click the "download" button below to get an easy-to-read, printable PDF of the 2017 Natural Foods Merchandiser Market Overview report including all of the data charts published in the July/August NFM magazine.
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