2017 NBJ Supplement Business Report
There is a lot of talk these days about “the new normal.” We could see the expression as the catch-phrase equivalent of throwing up our arms and surrendering to a new set of rules and realities that we may not like but we have to work with anyway. Most of the “new normal” talk echoes o% of Washington politics, where the new normal is a rebranding of chaos as the like-it-or-not expected order of affairs, but in the supplement industry it means something different.
For companies in the nutrition industry, the “new normal” may be very different, less desperate, less exasperating, more hopeful. For us, the new normal could include the $41.1 billion in sales on 6 percent growth NBJ estimates for 2016. This is a notch up from 5.9 percent in 2015, suggesting the industry has settled in to what feels like a modest pace, after recovering from the historic slowdown in 2014 (when the industry, reeling from a spate of negative headlines, slowed to 5.1 percent from 7.5 percent the year before).
So “the new normal” starts to sound like the good times are over but the industry has found its footing. Omega 3s, a major target of the negative headlines circa 2013, have crawled out of
While 1.9 percent might not sound like a lot in the supplement world, it’s a vast improvement over the negative 0.5 percent in 2015 or the plunge to negative 5.4 percent in 2013.
The new normal is sounding better all the time.
The NBJ Supplement Business Report is the guide to that new normal—the numbers and the nuance, the qualitative and the quantitative squeezed into 378 pages with 123 charts and commentary from the most thoughtful voices in the industry.
Those voices, and their perspectives, are more important than ever.
Among the reasons those perspectives, and the numbers to back them up, are so important is that the new normal for supplements does include some shadow of Washington drama. The new normal there, of course, is that there is no normal and at press time, that seems to grow more apparent by the hour in a news cycle measured in minutes. In February’s NBJ Dark Issue, we wrote of a “post-regulatory” age with the Trump administration telegraphing a business-friendly era of less enforcement and fewer regulations and ominous actions like the New Dietary Ingredient guidance being sidelined indefinitely. Back in February, the debate was about how the industry should react—there was almost a certainty to the uncertainty. Thee game now seems more about who is going to be in charge than what they are going to do. That game only starts in the oval office. e ice is thin in the nation’s capital this spring. With supplement champion Jason Chaffetz announcing in April that he wouldn’t seek a second term, and a month later telling constituents he’d leave Capitol Hill at the end of June, the whole structure of political allies in Congress gets thrown into question. Trade groups thought they had time to find a replacement to head the House contingent of the Dietary Supplement Caucus, but timetables can spin like a turntable these days.
Welcome to the new normal.
The question becomes what to do with steady growth and the possibility that the spotlight will be trained on Washington indefinitely (does the New York Times have room on the front page for anything that doesn’t include at least one Trump family member?). Collaboration becomes the obvious answer. It’s been the answer since early 2015, when the New York attorney general’s herbal supplement grandstanding threw the industry into a handwringing 5t. Following that media pummeling, trade groups began working together and major retailers stepped up their gatekeeper game. In reality, it’s too early to attribute the steadier growth to those efforts. Much of the recovery is more likely based in the public’s short attention span than the positive steps the industry has taken. The worst year, 2014, was driven by headlines questioning efficacy and not charging fraud. When publicity-hungry Dr. Paul O8t was angling for media mentions and the Annals of Internal Medicine brought their vitamins-are-worthless tag team act into the ring, the punch was felt in all corners. But the study-of-the-week shrug could make the industry increasingly immune to sideshows such as theirs.
So industry reform that takes fraud out of the equation—and a public ready to shrug o% sideline shots at efficacy, as surveys suggest—could bring the industry back to a place that’s less about crisis and more about con5dence in the business plan. Today, success in the supplement industry is less about reading tea leaves and hedging against external events and more about following trends—seeing where competitors are winning so you can win there too. There may not be agreement about a level playing field, but you can at least see the goal posts now. The smoke, most of it, has cleared.
But to win on that 5eld, you need a playbook. We recommend the NBJ Supplement Business Report.
In this year’s report, you will see growth across categories and channels. Look at the big numbers to get a sense of where the wind is blowing and then dip into sales ingredient-by-ingredient to see where the air is still or swirling.
We’ve also switched out the lens on company pro5les. We still feature the major players—but don’t expect a hierarchical list by sales. In a dynamic market where the right product, pitch and channel choreography can take companies and whole categories from bit-part to major player in a matter of months, we’ve decided the pro5les need to include the smaller companies that are carving out new kinds of success and de5ning markets in ways that even the biggest companies should be watching. Across a spectrum of 50 companies, expect to learn a lot about what’s working, what’s not working, and what could be fine-tuned to work even better.
With the NBJ Supplement Business Report on your desk, marketing and product development teams know where to coordinate in ways that grow sales and create new customers. With the report in the toolbox, executives can know where to deploy those teams and use industry connections to make sure the supply chain is anchored in the right places for the right products.
With growth steadier, and the regulatory tumult toned down, now is the time to make those solid decisions based on solid data.
So maybe the new normal is marked by fewer pendulum swings and growth that’s steadier and less spectacular. Less turbulence would be welcome, and industry reform focused on transparency and ingredient integrity could be calming the storms. We imagine many CEOs are welcoming calmer waters and something that’s more like a breeze and less like a gale.
Welcome to the new normal. We think you’re going to like it.
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