Key Trends: Vitamin and Dietary Supplement Market 2023 Report
Supplement Industry Snapshot
- The online vitamin and supplement industry grew all throughout the Covid-19 pandemic in 2020 through 2021 and will continue to grow in 2023.
- The rapid growth of the eCommerce sector due to the pandemic in 2020 resulted in a number of new and existing nutritional supplement brands selling 100% direct to consumers online.
- Supply chain disruption caused by the pandemic will continue to present problems for supplements in 2023. Those that have multiple sources of supply will win.
- We also saw increased competition due to increased demand, as more people focused on health and wellbeing. Particularly in the immune system support segment. This will likely level off over the next 2 to 3 years.
Will supplement sales continue to rise in 2023?
The website medGadget reported on a study conducted by Fact.MR that through 2023 sales for nutritional supplements will rise by 6.7% Compound Annual Growth Rate (CAGR) from 2017 through 2023. During that time period, the CAGR will surpass a value of $97,688 million.
NBJ expects a lasting boost to the industry through 2024 and beyond, driven by the effects of the pandemic.
And the dietary supplement market is forecasted to rise as high as $272 Billion by 2028.
Key market drivers in a “Post” Covid’s world
Not surprisingly, sales of immune health, stress relief, and heart health grew during the Covid-19 pandemic.
Covid’s impact on the supplement and vitamin industry will continue. It may never really stop since a post covid world may not actually be a thing. We’re over 2 years in and we have no idea if we’re in the middle or the end of this.
One of the biggest drivers of the supplement market in 2023 will continue to be consumer awareness and prioritization of wellness and prevention. This shift in consumer attention to a proactive prevention approach to health changes a few things.
First the business model. Opening up telemedicine and online consulting of wellness. This is a big opportunity for every supplement company out there. I’m thinking of this opportunity as more of a line extension on the brand. For an existing supplement company, your customers already know your brand. So adding a nutritional consultation service on top is a natural fit and a great value add for your brand.
Second, the mindset of the consumer has changed. Now a proactive approach to the treatment and prevention of potential diseases is the starting point. Whereas pre-Covid it has always been said in the direct response space that prevention never sells. The bigger pain point in the mind of the customer is where the money is. That was and always has been the case. But this shift in consumer sentiment because of the pandemic makes it easier to sell prevention and wellness. This shift in consumer behavior toward prevention may stay longer than Covid. And that’s a good thing for the supplement market.
Let’s all binge Netflix and work from home
Another key driver to supplement growth has been the shift to a more sedentary lifestyle due to the early lockdowns in 2020. Two years later, many people are still working from home and as a result, have not only watched a ton of Netflix but are now firmly entrenched in a new lifestyle.
The new commute from the bed to the home office is one of the main drivers for the demand for food supplements. Food supplements aka “superfoods” popularity are rising as a result of the bad eating habits we’ve all adopted while stuck at home. The pandemic created the rise of healthy indulgence and I don’t see any slowdown in the superfood trend anytime soon.
The Elephant In The Room – Inflation
Whether inflation has kicked in or not is debatable. But I don’t think anyone would disagree prices are going up. And the increased cost of healthcare is no exception. Health spending in the U.S. increased by 4.6% in 2019 to $3.8 trillion. Slightly faster than what was observed in 2017. Add to that the cost of Covid-19 testing and vaccines and add inflation on top and it creates the perfect storm effect for rising prices.
The effect of this shifts more attention to prevention. Prevention through the use of supplements in an attempt to reduce long-term health costs at the individual consumer level.
This could mean a brighter future for the health supplement market in 2023 and beyond.
We All Want Privacy
On top of all this, there’s been a major shift in browser privacy in 2021 from Apple going to war with Facebook and Google. Apple’s update of iOS 14.5 Safari’s third-party cookie tracking has reached havoc on many health supplement ad accounts. More so on Facebook than anywhere else but Google ads have also been affected in a negative way.
This has undoubtedly caused the cost of acquiring a customer to go up in 2021 and it will continue to do so in 2023, along with more competition driving up the ad bidding prices. It is becoming more expensive to acquire a customer in general across the board because of browser privacy which has a direct impact on advertising attribution. Personally, I think this is only a short-term problem. Google is already making advertising modeling innovations that go beyond the cookie. And I wouldn’t be surprised that by the end of 2023, this won’t be an issue any longer. Not sure what the solution will be but I’m sure there will be one, or a new ad platform will appear for direct marketers to jump to.
As a result, though, Facebook advertising for health supplements may be taken down a few pegs. And shift even more toward influencer marketing in 2023.
All in all 2023 looks like it’s going to be the start of some changes for the health supplement market
The change in how people view health from cure to preventative will have repercussions on everything from marketing opportunities to how people buy supplements online.
As a result, we’ll continue to see an increase in foundational supplement sales. Supplements like multivitamins, B complex, magnesium, vitamin C, D, and Zinc. As more and more millennials and younger people continue to push this trend upward. This increase in general awareness of supplements will be good for the market as a whole. Rising tides rise all ships.
As people change how they view their health, few things will be here to stay. Two of the biggest are virtual wellness and healthy snacking.
The year 2023 will also continue to push the healthspan meta trend further. Healthspan is a twist on Lifespan. Which is defined as years of life that are healthy and free of disease rather than simply anti-aging and beauty. Which affects how these health niches might shift their positioning. To match the sentiment of where the culture is currently going.
Healthspan will lean into how healthy we can live regardless of age. We’ll see this trend of supporting health with diet, lifestyle, and supplements not in mid-to-late age, or only when a health issue arises, but throughout our lives. It’s more than just immune support from covid. It also ties into the healthy snacking superfoods trend.
Some supplements to look out for in 2023 towards this trend include anti-inflammatories, supporting healthy blood sugar balance, reducing free radicals, and always supporting immune resilience.
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