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Vitamins and minerals sales have witnessed strong growth in recent years

The number of households purchasing vitamins grew in 2014

A survey into dietary supplement use has shown that the number of consumers buying these products has grown consecutively between 2012 and 2014. The survey found that growth was largely driven by male consumers, and that children’s multivitamin sales had experienced decline.

TABS Group’s survey looked at 1,000 consumers’ purchases over a number of channels in the previous year ending April or May 2014. It was found that 75% of households purchased vitamins at least once in the year ending April or May 2014, up two percentage points from 2013, and a dramatic jump from 66% of households in 2012. This significant growth indicates an increasingly popular industry, one which TABS Group estimated to be worth $11.4bn in 2014, up 3-4% from 2013.

The Group believes that other estimates of the industry (including one estimating a value of up to $32bn) are incorrect, stating that they had been overstated: “The reality is far lower than overestimated estimates, leaving plenty of room for savvy retailers to grow.”

The survey identified light consumers (who buy one or two types of vitamins occasionally) and heavy users (who buy three to five types of vitamins regularly) as two groups that were driving growth.

The survey also identified gender differences. While the traditionally heavy use among women was seen to be tapering off, buying rate increases and penetration rates were largely driven by men. While vitamin use by men doesn’t reach female buyers’ levels, vitamin use among men grew to 72% in 2014.

The percentage of male heavy users also grew from 28% in 2013 to 34% in 2014.

The study found that the most commonly taken vitamin – the multivitamin – experienced increased growth for adults (56% of households purchased adult multivitamins in 2014) but a decrease for children (household purchases dropped from 9% to 8%.) The study suggested that either an increase in prescription of children’s multivitamins or an increase in adult ‘gummy’ vitamins could be the cause. An increase in multivitamin prescriptions for children would mean that they no longer have to be bought over the counter, and the rolling out of adult ‘gummy’ vitamins may mean that parents are choosing to give their children an adult multi-vitamin rather than one aimed at children.

Calcium purchases also slumped, while sales of vitamins D and E, joint relief, probiotic, melatonin and women’s herb vitamins gained ground.

Holland & Barrett has experienced record consecutive growth, with plans to open more stores

One company that has greatly benefited from the elements of society that have become more health-conscious in recent years is Holland & Barrett, a popular UK health and wellness retailer. The company opened its 1,000th store in October 2014, and has plans to open 40 further stores in the UK and Ireland and 30 in Holland and Belgium between October 2014 and September 2015, a stark contrast to the general decline of the UK high street.

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Holland & Barrett has identified the strong ‘health pound’ and wider public health awareness campaigns as helping boost revenues. Peter Aldis, chief executive of NBTY Europe, Holland & Barrett’s parent company, said “Although the UK high street has been challenging these past few years, I believe the retail health sector benefits from the resilience of the ‘health pound’ against other demands on consumers’ wallets.”

The company also said that increased interest in its healthy product ranges had been the result of long-term campaigns on the risks of sugar, salt, and meat consumption, noting “We have in particular seen notable increases in demand for our ‘free-from’ food, which is 20% up year on year, as well as our healthy beauty range, which is up 70% year on year online, reflecting continued scientific advances and a genuine shift towards healthier living.”

This shift towards healthier living was backed up by some statistics Holland & Barrett included: the company noted that five times as many people take vitamins and minerals as in the 1980s, and people in their 20s are three times more likely to go to the gym than their parents.

This climate was credited as helping the company achieve a record sixth year of consecutive growth, with sales growing by 7.5% to £513m (approximately $801.9m) and underlying profits growing 8% to £130m (approximately $203m) in the year ended September 2014, representing a compound annual growth rate of 12% over the last six years. Holland & Barrett has identified young shoppers as growth-boosters: Aldis said “Data from our Rewards for Life loyalty scheme shows an increasing amount of younger shoppers buying into the brand for the first time.” This corresponds with the results found by the IFIC Foundation’s 2014 Food and Health Survey, discussed above, which found that young consumers are closing the gap when it comes to concerns about healthy products.

Holland & Barrett also benefits from the high margins dietary supplements can command, stating that it is “one of the most profitable chains on the UK high street”.

Related report:

Dietary supplements: Growth and M&A (MarketLine Case Studies)

 

2 Comments

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