At the tail end of the COVID-19 induced surge in dietary supplement purchases, several industry experts participated in a panel organized by the Council for Responsible Nutrition to discuss what adaptations companies must make now that there appear to be sweeping, lasting changes influencing market spaces not just for immune-boosting products, but a wide range of nutritional products.
 
Insights were shared by Steve French, managing partner at NMI, Kristin Hornberger, executive of Healthcare at IRI, Kathryn Peters, executive vice president at SPINS, and Raj Sapru, COO of Netrush. Following a period in which nearly two in 10 consumers surveyed by NMI started taking vitamins and supplements as a result of the COVID-19 outbreak, there are key takeaways from the behaviors and needs of both this new clientele as well as the supplement user mainstays weathering through the crisis.
 
Which Consumer Concerns will Last?
On a week by week basis, it appears that markets across the globe are beginning to stabilize at a 10% CAGR (still an inordinately high rate compared to pre-COVID purchasing habits a year ago), after seeing astronomical stock-up surges occasionally doubling or tripling typical sales in late March and early April in most countries. While a fair amount of the surge can be attributed to former dietary supplement users who lapsed in their purchasing habits before their interests were renewed by the ongoing public health concern, many of those surveyed by multiple market research groups appeared to be novel users.
 
Even though it appears COVID-19 cases saw their peak in the U.S. by the end of April, consumers of all age groups increasingly believe at present that their personal health will be affected in some way by the outbreak of the virus.
 
Stress, sleep, and weight gain have largely been considered to be the runner-up to immune support in terms of application demands for dietary supplements over the past few months. According to French, NMI found that issues of anxiety, lack of focus, sleep loss, and weight gain, are most adversely affecting millennials and generation Z. Younger demographics were more likely than older demographics to have already been taking supplements prior to COVID-19 and increasing the amount they take, which could in part be explained by the fact that younger generations have been reporting more health-related demands adjacent to immunity than older consumers.
 
Across all ages, women appeared to be more interested than men in learning about immune-boosting foods and supplements, and it appears that supplement users motivated to start taking supplements because of COVID-19 skew more toward women (60%) and millennials (47%). Like supplement usage, interest in immune-boosting foods is most prevalent in women and young people, but is also especially prevalent in the baby boomer generation.
 
While some concerns appeared to be more prevalent in certain demographic groups in the research to date, limitations in access to healthcare are becoming increasingly concerning across the general population, at 38%. As a result, more than two in 10 dietary supplement users surveyed by NMI started taking dietary supplements as a direct result of COVID-19. To what extent the driver of this concern is due to a true lack of access, or self-limitation due to fear of exposure, will likely be determined over time as non-critical doctor’s appointments become more commonplace.
 
It is very apparent that the economic consequences of COVID-19 are causing an unprecedented sensitivity to price among consumers of all ages. According to Hornberger, 49% of all consumers surveyed said they have perceived price increases because of the coronavirus, and that number is 56% among consumers who’ve been furloughed or laid off.
 
“Fewer promotions, larger stock-up trips, buying different pack sizes, and even buying different brands can all fuel consumer perceptions of price increases,” Hornberger said. “We’re seeing recessionary behaviors emerging, and consumers are seeking out private labels, cheaper brands, and smaller quantities.”
 
Despite this, consumers surveyed by NMI appear to be buying supplements at even higher price points if their usual brand is out of stock, signifying that nutritional products largely are considered critical in relation to other groceries and goods to most consumers, especially younger people. Beyond that, nearly one quarter of consumers are taking more, not fewer, supplements following the onset of COVID-19, NMI found.
 
Eyes on Herbs
SPINS’s Kathryn Peters looked at the many herbal products which proliferated from a niche place, and may very likely become key players compared to their stance in a pre-COVID landscape for their health claims pertaining to cold and flu, cognitive health, sleep, immune health, and more. Products with each of these types of claims have been in especially high demand throughout the course of the pandemic, widespread market research shows.
 
“Herbal formulas of all types are still staying at a higher level of sales, after peaking at over 200% growth,” Peters said. “What may be coming down the road as we think about economic recession? We anticipate that there will be bifurcation in consumer buying. Some people will continue to push the envelope in natural channel stores, and those who can afford it will likely be pushing for higher-dollar items and the latest innovations, likely discovering new products much earlier in their overall life cycle, such as black seed oil, mushrooms, elderberry, chamomile, algae, and ashwagandha.”
 
Calmative herbal formulas are a standalone superstar, having seen growth of 1,156% over a four-week span, likely spurred by consumers on lockdown who’ve had uncomfortable work-home balances spontaneously thrust upon them.
 
Peters also observed there may be an ongoing lack of seasonality within the herbal space, based on online shopping behaviors that have taken place over the past few months.
 
“A lack of seasonality will be pronounced, which is definitely something suppliers need to think about, as plant-based ingredients sourced from farms are attached to lengthy supply chains. Companies need to get way ahead of the ongoing demands, because there will be fewer peaks and valleys,” Peters said.
 
Online Adaptations
With immune products and other dietary supplements creating a traffic mountain on Amazon that, in April, reached twice the number of orders seen during the most recent Prime Day peak, Netrush COO Raj Sapru described what online retailers working within and outside of Amazon have done to adapt to the surging online retail landscape.
 
To put it simply, major growth was anticipated in the online market, however, it appears that COVID-19 created a demand for teams and infrastructure that wasn’t expected to be necessary until the year 2024.
 
“It can be crushing for manufacturers and retailers to not invest heavily in e-commerce at this time,” Sapru said. “We need to quadruple our digital transformation efforts.”
 
The online retail landscape, combined with endemic supply chain issues caused by COVID-19 has served as a driver for competition in nearly all CPG categories, with nutraceuticals being no exception, Sapru said, pointing to a McKinsey survey which found that 20% of consumers have tried new brands or channels since the start of the pandemic. Nearly half of those consumers report they plan to stick with their new purchasing decision.
 
If COVID-19 serves as a window into what the future of online retail will look like, Sapru believes that it emphasizes how much widespread online retail in the coming years will shake up competition. Leading brands that are currently able to rest on their laurels may have less time to do so than they previously thought, and that they shouldn’t leave the responsibility of establishing consumer loyalty to any outside component of their supply chains.
 
“Now is the time to figure out which of your partners aid your brand equity, and which dilute margins, and adjust accordingly,” Sapru said.