Following four consecutive years of high single-digit annual sales growth, the $11.4 billion vitamin and supplements industry may be stalling, posting a modest four percent growth last year, according to an annual study from the Shelton, CT-based TABS Group. Discussing the industry’s “lethargic” growth, TABS pointed to several important trends in this year’s report, namely that men were replacing women as the main buyers of supplements, while most retail chains stopped increasing floor space for vitamins and supplements.
 
Online is tied with Walmart as the leading supplement retailer, with this year marking the first time that online sales growth was propelled mainly by marginal category users, many of whom bought products online. Online retailers without brick and mortar connections continue to garner two-thirds of online’s $1.7 billion in vitamin sales.
 
Walgreens showed significant gains in vitamins sales due to a retooling of its promotional strategy, which deemphasized its loyalty program in favor of strong and regular price promotions. In addition, the mass-market, traditional food/drug retailers still continue to command a majority of vitamin buyers, with relatively few purchasers moving to non-traditional vitamin specialty stores. There has been a significant increase in dual-channel purchasing, because of the migration to online sales. 
 
Men are an important sales segment and have driven macro trends in vitamins for the last five years. Males aged 65 and older have a 72% penetration rate in the category. While heavy usage (buying more than three types) seems to be tapering off among women, men are increasing in penetration and buying rates. TABS suggested that this is probably because women have been maxed out in terms of potential types of vitamin purchases.  
 
The TABS Group Annual Vitamin Study was conducted among 1,000 representative respondents aged 18-75 from April to May.  The respondents were geographically and demographically dispersed.
 
Though the vitamin category has grown marginally, there is a great deal of concern in the industry about the decelerating growth, because vitamins and nutritional supplements are the largest health and beauty category among consumer product goods. Further, TABS Group’s registering of $11.4 billion in sales this year is much lower than the generally predicted $24 – $27 billion.
 
“The vitamin industry has many problems that still need to be worked out,” said Dr. Kurt Jetta, TABS Group CEO. “It is likely that some retailers refused to increase vitamins space because of the reduction in trade promotion investment from major manufacturers. And with no meaningful innovation on the horizon it did not make sense to carve out more space.”
 
The TABS Group study cites a number of negative factors suppressing vitamin sales: a lack of space and expansion for vitamins at most major retailers; a reduction in quality and frequency of promotions; the absence of a major innovation such as gummy vitamins’ popularity a few years ago; and consumers moving to buy vitamins online where sales are much more sensitive to promotions.
 
“However, we remain positive about the vitamin category, long-term, because it is aligned with the trends of aging baby boomers who are becoming more reliant on self-care options for their health.  Also, a larger investment in price promotions can have an immediate and meaningful effect on sales and profits,” said Dr. Jetta.  “We will never underestimate the ability of manufacturers to develop true innovation in a product or merchandising that will jump start the category for longer-term growth.”