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NBJ Supplement Business Report: Mostly clear skies for supplement industry

Getty Images/kerdkanno NBJ 2018 Supplement Sales Report

Dark clouds come in different shades, and the difference between a shadow passing over the picnic and a downpour sending the whole park running to their cars is immense.

Consider slowing growth in supplement sales as somewhere short of that cloudy picnic, perhaps a flock of sparrows interrupting the glare. Sales growth did drop in 2017, coming in at 5.4 percent, down from 6 percent the year before, but there was no dark cloud to be seen, no market-hobbling scandal, no health-scare study calling supplements worthless or dangerous.

And if you are squinting to see that dark cloud or downpour, keep squinting. The slowdown was relatively slight and Americans still spent $43.2 billion on supplements in 2017. That’s an $8 billion increase in five years.

That may not be as sunny a day as some might like, but there are no clouds closing in.

The last time the industry suffered a slowdown, there was more reason for concern. In 2014, when a barrage of negative headlines seeded public doubt, growth dropped to 5.1 percent from 7.5 percent the year before. Cause and effect seemed clear, and troubling. The Annals of Internal Medicine told readers to “stop wasting money” on supplements, and a questionable study on omega-3s linked fish oils to prostate cancer, and assorted media blips and dips added blood to the water.

No such cause and effect is obvious this year. We’d caution that brands shouldn’t overreact, but we’re not sure what they’d be overreacting to.

The story of the 2017 slowdown might be a story of channels and natural business cycles.

Brick and mortar showed drop-offs in natural and specialty, where growth fell from 5.3 percent to 3.8 percent; and mass fell even harder, with growth dropping from 5.8 percent to 3.3 percent.

And even though online sales continued a sharp climb, rising from 10.8 percent to 14 percent, the $3.2 billion in that channel is too small a piece of the pie to counterweight the drops in brick and mortar.

At least some of this is the mundane math of a mature market. Mass saw strong growth for a number of years, but few thought it sustainable. Some of those sales came at the expense of natural and specialty brick and mortar, leaving those channels in a weakened position, even before the siphoning of sales to e-commerce.

Of course, e-commerce hurt both brick-and-mortar channels, but the numbers there might be getting more attention and alarm than they deserve. Online sales can’t entirely explain the shorter checkout lines in brick and mortar. The shortage of obvious doom or gloom is true at the ingredient level as well.

Sales growth for probiotics is far lower than the Nutrition Business Journal had projected not long ago. Sales growth fell from 17.1 percent to 10.2 percent. But insider talk suggests the story is more about form and format than a disillusioned consumer. Probiotics are showing up in a vast constellation of food products where they were never seen before. People didn’t give up on probiotics. They just expect them in food and not in a pill.

The story at the incremental ingredient level includes bright spots as well, though the size of these standout ingredient markets isn’t large enough to boost sales growth overall. Collagen is on fire, growing at 30 percent, but it hasn’t broken the $100 million barrier yet, coming in at $98 million. Mushrooms had another strong year at 10.1 percent growth, but it’s still among the smaller corners of the industry at $46 million.

In the filtered light of expectations and assumptions, it’s easy to see those bright spots as brighter than they are and the same holds true at the other end of the alarm-and-elation spectrum with that overall sales growth slowdown.

Yes, sales are slower, but not significantly slower. It’s also a bigger and more complicated market with an increasingly intricate set of channels and consumers hopping from one to the next. That makes both predicting changes and reacting to them very difficult.

Whatever the numbers tell us about 2017, they don’t say anything about panicking.

Or even reaching for an umbrella.

Get the complete NBJ Supplement Business Report 2018

Known as the go-to guide—with more than 100 proprietary data charts—for sales data in an industry that’s notoriously difficult to track, the NBJ Supplement Business Report defines market size and growth by product category and explains the trends and macro forces you need to understand to thrive in the fast-changing supplement and nutrition industry.

Get the Supplement Business Report or email [email protected] to view the table of contents and receive more info.


National Co+op Grocers and partners raise $150,000 to rebuild cooperatives in Puerto Rico

Getty Images Businesses in Puerto Rico damaged by Hurricane Maria 2017

National Co+op Grocers and 10 partners within the natural/organic foods industry have contributed $150,000 to Cooperative Development Foundation (CDF) Disaster Recovery Fund. The fund currently supports the reconstruction of Puerto Rican cooperative businesses that Hurricane Maria destroyed in September 2017.

Cooperative businesses typically recirculate more money within their local economies than traditional businesses, which makes an investment in this sector particularly valuable to Puerto Rico’s long-term recovery. Working with La Liga de Cooperativas de Puerto Rico, the development fund is distributing grants—generally between $2,500 and $5,000—to cooperative businesses seeking assistance.

“Disaster relief for Puerto Rico has been slow to manifest and is woefully underfunded. With the 2018 hurricane season underway, our donation will provide much-needed funds to the vibrant and vital co-op community in Puerto Rico.” said Ben Nauman, senior director of purchasing for National Co+op Grocers. “We are grateful to have the opportunity to partner with natural/organic brands to showcase the power of cooperation and help foster a more stable economy on the island.”

NCG convened the fundraising effort as part of its annual grocery and wellness conference and tradeshow, Co+nvergence, held July 23-26 in St. Paul, Minnesota.

“CDF greatly appreciates National Co+op Grocers and its partners for this generous donation,” said Leslie Mead, the Cooperative Development Foundation’s executive director. “This grant will allow us to continue to provide recovery help to the 227 member-owned businesses that are important social and economic contributors to communities across the island. The money raised by NCG and partners will have a wide-ranging impact and touch many lives.”

NCG extends its appreciation and gratitude to all partners who contributed so generously, including Newman’s Own Foundation which kicked off the fundraising with a contribution of $50,000, and United Natural Foods (UNFI), which contributed an additional $10,000. Donating partners included: ACURE, Applegate Farms, Guayaki, Natural Factors, New Hope Network, Newman’s Own Foundation, Nutraceuticals, Corp., OCHO Candy and Tea Tree Therapy.


Source: National Co+op Grocers 

What brands should know before going organic

SmartyPants Organic

On June 6, 2018, SmartyPants Vitamins launched its organic line, including Prenatal, Toddler, Kids, Men’s and Women’s formulations. The line includes probiotics to support normal digestion, vegetarian omega-3s derived from flaxseed oil, vitamin D3 to support bone health, B vitamins for energy and zinc to support healthy immune function.

“Almost from the day we released our first product, we have been fielding requests for a vegetarian version of our multifunctional supplements,” says Clay Nichols, brand senior vice president. “In addition, we always want SmartyPants Vitamins to be top shelf in the category, and that means organic. Developing a vegetarian organic line was a clear imperative to our brand.”

But it wasn’t a launch without challenges. Here’s what brands about to take the plunge into organic certification should know:

The market should dictate need

“Make sure an organic product is a match for your distribution,” Nichols says, since some consumers aren’t yet willing to pay the premium that organic supplements call for.

Trial and error is inevitable

It was important for SmartyPants to have an efficacious amount of omega-3s, but it’s also important for the supplement brand that products taste palatable for both adults and children. And because organic ingredients are in shorter supply than conventional ones, it can be a challenge to find the right fit. “Finding the perfect fit for an organic and vegetarian omega-3 source required many iterations and tasting panels,” Nichols says.

It takes time

Because organic ingredients aren’t as readily available as conventional ingredients, Nichols says brands need to allow themselves time to source ingredients that can be certified.


[email protected]: Hy-Vee opens expanded HealthMarket | 3M knew chemicals' dangers

Hy-Vee HealthMarket HyVee's new HealthMarket store opens in West Des Moines, Iowa

Hy-Vee's new HealthMarket offers organic foods, adjoining fitness center

Hy-Vee has operated HealthMarkets in its larger grocery stores, but the operation about to open in West Des Moines, Iowa, is bigger and, perhaps, better. The 15,700-square-feet site is about three times bigger than the previous store-within-a-store projects. It offers a health clinic, a sports nutrition are and even a hydration station that offers kombucha and infused waters. There’s even a doorway that connects the retailer with an Orangetheory Fitness center. Read more at the Des Moines Register


3M knew about the dangers of PFOA and PFOS decades ago, internal documents show

During the 1970s, 3M discovered that two industrial chemicals it created, PFOS and PFOA, were toxic. The company knew these chemicals accumulated in people’s blood; it found them in fish, as well. But none of this information became public until the Minnesota attorney general sued the company in 2010, accusing the company of polluting groundwater and knowing that the chemicals were destructive. 3M settled the lawsuit in February, and the attorney general’s office has released numerous internal documents about what the company knew. Read more at The Intercept


Death Valley to post hottest month ever recorded on Earth, for the second July in a row

A year ago, the hottest month ever recorded on Earth was at Death Valley, California—shattering a 100-year-old record. In response, July 2018 said, “Hold my beer.” Depending on the July 31 temperature, the 24-hour average temperature of 108 degrees at Death Valley will break the record by one-half a degree. For comparison, the 30-year average is 102.2 degrees. Read more at The Washington Post


Facebook has a climate-denial problem

As Facebook confronts allegations that Russian hackers used its social-media platform to affect the results of the 2016 election, and sees the number of European users decline after a privacy regulation took effect there, it’s also running into trouble for sharing misinformation. Not only does it disseminate posts, videos and advertisements that deny climate change science, it employs climate-change-denying organizations as fact-checkers. Read more at Media Matters  


Ravenous for meat, China faces a climate quandary

When Jian Zhang was growing up in rural China, he often went hungry. Eating meat was rare, as his family could afford to do so only a couple of times each month. Now, though, economic growth has raised the income of millions and sparked the skyrocketing growth of meat consumption. The average Chinese consumer now eats 140 pounds of meat per year, up from 30 pounds a year in the early 1980s. The increase, however, challenges the country’s commitment to reducing greenhouse emissions and fighting climate change. Read more at Undark