Food Supplements Market Trend: a market in its teenage years

Global food supplement sales amounted are estimated depending on the consultancy companies between €80 billion (Euromonitor) and €90 billion (Persistent Global Market). Are these taken alone values meaningful enough? Not really, but it does mean something when compared with other “neighboring” markets. Food supplements worldwide represent less than 4% of the global market for processed foods, slightly over 8% than drugs global market. A drop of water in the ocean? Please note that the food supplements global market is quite surprising when analyzed in the light of its growth. Between 2010 and 2011, its growth rate exceeded 6%, after having steadily risen each year by more than 5% since 2006. During roughly the same period, the drug market was growing by 3%; as for the agro-food industry, it registered a growth of between 1 and 2%…

Between 2014 and 2020, the global market is expected to grow at a CAGR of more than 7.4% to reach €160 billion.

The United States: an ultra-leader market and player

With over €26 billion (2013), the United States are the world leader in dietary supplements. Across the Atlantic, the culture of food supplement is more developed than the functional foods one – unlike in Europe, for instance. According to a survey conducted by the Council for Responsible Nutrition (CRN) in 2014, around 68% of adults in the U.S. use dietary supplements; which 50% of them are regular users.

This explains why sales continue to do well over there. However, a slowdown in this growth has been noticed – due to a decrease in new launches following the uncertainties and questions raised at the turn of the 2010s by the guidelines on New Dietary Ingredients. Not to mention that in 2012 there were several scandals related to abusive claims, adulterated formulas and potential risks.

Within this context, growth is still here, driven by a few categories – supplements based on vitamins B, fish oils, probiotics – whose sales exceed €1 billion (Euromonitor). Side note: 2013 did not register any sales upturn as striking as the one of Procter & Gamble’s New Chapter in 2012.

From the Atlantic to the Urals: €10 billion

With its €10 billion estimated sales, the European market for food supplements ranks 4th in the world. This market is far from being homogeneous reflecting the rift between Eastern and Western Europe, in line with a turbulent history. Sales momentum is therefore not where we think it is…

The sun rises in the east. For the food supplements, this metaphor is, in fact, a reality. The food supplement market growth is six times higher in Eastern Europe countries, including Russia, than in the former Western Europe. Thus, in this field, the Iron Curtain has not disappeared. According to Euromonitor, the 2013 food supplement sales in Western Europe – Germany, Scandinavia, the United Kingdom, Ireland, France, Italy, Spain, and Benelux Union – accounted for a little less than €7.6 billion, slightly downward than 2012.

The market is dominated by Italy (between 1.6 and 1.9 billion Euros, according to sources), followed by Germany (€1.4 billion) and the UK (just under €900 million). The French market ranks fourth, according to Euromonitor, with €830 million. This position has most likely been underestimated – pharmacy sales alone reach €650 million and, by integrating the sales generated by drugstores, health food stores, supermarkets and (especially) the Internet, etc., the French market is definitely beyond  its rank: in  2014 it reached €1.4 billion (IMS, Actif’s Magazine).

A characteristic of the Western European market is its very small growth – please note the decline highlighted by Euromonitor – +3% between 2006 and 2001, – 0.5 % in 2013 – largely due to the economic crisis which affected a large part of the euro area. The health claims also seem to have played their role in this – the number of new product launches has slowed down in some countries.

The Eastern dynamism

The situation is completely different when we look at sales in the former Eastern Europe countries. According to Euromonitor, they amount to €3.2 billion and are still growing (more than 5% in 2013). The first market, Russia – €1.7 billion – stands out by its strong growth: +7.3% in 2013. Some of the most popular supplements in Russia are the multi- vitamins, probiotics, tonics and nutritional drinks, eye supplements, minerals…

The second Eastern European market for food supplements, Poland, with its €610 million, was the most dynamic in 2013: + 11% growth. A great rebound after a less satisfying past few years- from a dynamic market altogether – during which sales were progressing between +4% and +6% per year. The most popular product categories are, in addition to multi-vitamins and minerals, probiotics, Omega-3 fatty acids, slimming products and plant-based formulations (digestion or liver protection) emerged from local traditional uses.


Figures:


Top 5 of world leaders

Amway Corp: 6%

NBTY Inc.: 3%

Pfizer: 2.5%

Herbalife Ltd: 2.5%

Nu Skin Inc: 2%

(Source: Actif’s Magazine estimations based on Euromonitor data)


Benchmarks

Global cosmetic market (2011): €425 billion (source CosmeticValley)

Global drug market (2012): €770 billion (source: LEEM)

Global market for processed foods (2005): €1,600 billion (excluding drinks) (source: USDA/Euromonitor)


71% Traditional supplements/plant-based supplements (Source: Euromonitor)

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