CLAIRE MortonNew Hope Network

The State of the Supplement Industry

State of the Supplements IndustryExpo East 2018

Claire MortonSenior Industry Analyst, Nutrition Business JournalNew Hope Network | Informa Global Health & Nutrition Networkcmorton@newhope.com

2017 supplement market overview – growth slowed slightly to 5.4%, reaching $43.4B

Supplement Sales and Growth Supplement Market Share, 2017

Vitamins31%

Herbs/ Botanicals

19%

Specialty/Other18%

Sports Supplements

14%

Meal Supplemen

ts11%

Minerals7%

Source: Nutrition Business Journal ($mil, consumer sales)

0%

1%

2%

3%

4%

5%

6%

7%

0

10,000

20,000

30,000

40,000

50,000

60,000

2014 2015 2016 2017 2018e 2019e 2020e 2021e

Fuel (Gut, Protein, Energy)

Beauty-from-within

Head games

Immunity, Cold and Flu

Pill fatigue

Changing retail landscape

2017 Industry trends

Focus on Fuel

Protein supplements gain momentum – both in and out of the gymPowders RTD Protein Beverages

Fuel (Gut, Protein, Energy)

Beauty-from-within

Head games Immunity Pill fatigue

Changing retail

landscape

Source: Nutrition Business Journal ($mil, consumer sales)

0%

1%

2%

3%

4%

5%

6%

7%

8%

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2014 2015 2016 2017 2018e 2019e 2020e 2021e0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

0

200

400

600

800

1,000

1,200

1,400

1,600

2014 2015 2016 2017 2018e 2019e 2020e 2021e

Gut Health – probiotics growth slows, but consumers gain interest in prebiotics and digestive enzymesGut Health Sales and Growth Top 6 Ingredient Market Share

Fuel (Gut, Protein, Energy)

Beauty-from-within

Head games Immunity Pill fatigue

Changing retail

landscape

Source: Nutrition Business Journal ($mil, consumer sales)

0%

2%

4%

6%

8%

10%

12%

14%

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

2014 2015 2016 2017 2018e 2019e 2020e 2021e

Pre/Probiotics58%

Digestive Enzymes

11%

Psyllium4%

Ginger2%

Homeopathics2%

Other20%

Consistent increase in growth rate for energy supplements, reaching $1.8B in 2017

-2%

0%

2%

4%

6%

8%

10%

12%

14%

0

500

1,000

1,500

2,000

2,500

3,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017e 2018e 2019e 2020e 2021e

Source: Nutrition Business Journal ($mil, consumer sales)Fuel (Gut, Protein, Energy)

Beauty-from-within

Head games Immunity Pill fatigue

Changing retail

landscape

Beauty-from-within

SkincareHair ProductsBath/Toilet SoapAroma/FragrancesCosmeticsOral HygieneDeodorantsBaby CareShavingBath ItemsFeminine HygieneNail Care

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

2014 2015 2016 2017e 2018e 2019e 2020e 2021e

Natural and organic personal care growth slows as interest in beauty-from-within grows

Fuel (Gut, Protein, Energy)

Beauty-from-within

Head games Immunity Pill fatigue

Changing retail

landscape

Source: Nutrition Business Journal (; $mil, consumer sales)

Fuel (Gut, Protein, Energy)

Beauty-from-within

Head games Immunity Pill fatigue

Changing retail

landscape

Sales grew 7.2% to $1.1B

Hair, Skin and Nails Supplements – collagen is the category’s hot ingredient

Source: Nutrition Business Journal ($mil, consumer sales)

B Vitamins

Collagen

Vitamin C

Fish/Animal Oils

Homeopathics

Vitamin D

CombinationHerbsPlant Oils

CoQ10

Others

By Ingredient, 2017

0%

1%

2%

3%

4%

5%

6%

7%

0

200

400

600

800

1,000

1,200

1,400

2014 2015 2016 2017 2018e 2019e 2020e 2021e

Collagen continues double-digit growth

Fuel (Gut, Protein, Energy)

Beauty-from-within

Head games Immunity Pill fatigue

Changing retail

landscape

0%

5%

10%

15%

20%

25%

30%

35%

0

50

100

150

200

250

300

2016 2017e 2018e 2019e 2020e 2021e

U.S. Collagen Supplements sales grew 30% to $98M in 2017

Source: Nutrition Business Journal ($mil, consumer sales)

Head Games

Cognitive health growth spikes to 10.2% in 2016 and 7.4% in 2017 – addressing memory and focus

Fuel (Gut, Protein, Energy)

Beauty-from-within

Head games Immunity Pill fatigue

Changing retail

landscape

Source: Nutrition Business Journal ($mil, consumer sales)

0%

2%

4%

6%

8%

10%

12%

0

200

400

600

800

1,000

1,200

2014 2015 2016 2017 2018e 2019e 2020e 2021e

Supplements targeting mood, stress, and anxiety increase growth to 4.1% - adaptogenic herbs boom

Fuel (Gut, Protein, Energy)

Beauty-from-within

Head games Immunity Pill fatigue

Changing retail

landscape

Source: Nutrition Business Journal ($mil, consumer sales)

0%

1%

2%

3%

4%

5%

6%

7%

8%

0

100

200

300

400

500

600

700

800

900

2014 2015 2016 2017 2018e 2019e 2020e 2021e

Growth projections in vision supplements spike to 6.3% as blue light becomes a focus

Fuel (Gut, Protein, Energy)

Beauty-from-within

Head games Immunity Pill fatigue

Changing retail

landscape

Source: Nutrition Business Journal ($mil, consumer sales)

0%

1%

2%

3%

4%

5%

6%

7%

-

100

200

300

400

500

600

700

2014 2015 2016 2017e 2018e 2019e 2020e 2021e

Immunity, Cold and Flu

Brutal flu season leads to spike in immunity, cold and flu, growth at 9.5% in 2017

Fuel (Gut, Protein, Energy)

Beauty-from-within

Head games Immunity Pill fatigue

Changing retail

landscape

Source: Nutrition Business Journal ($mil, consumer sales); Centers for Disease Control

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2014 2015 2016 2017 2018e 2019e 2020e 2021e

YoY Cold/Flu Season Comparison

Johnson and Johnson acquires cold and flu supplement company Zarbee’s in 2018

Pill Fatigue

Pill fatigue drives growth of non-pill formats, such as gummies, powders, and liquids

Fuel (Gut, Protein, Energy)

Beauty-from-within

Head games Immunity Pill fatigue

Changing retail

landscape

Pill, 66%

Non-pill, 33%

2011

Source: Nutrition Business Journal ($mil, consumer sales)

Pill, 53%

Non-pill, 47%

2017eNon-pill+14%

Pill fatigue drives innovation in novel delivery formats

Fuel (Gut, Protein, Energy)

Beauty-from-within

Head games Immunity Pill fatigue

Changing retail

landscape

Changing retail landscape

Fuel (Gut, Protein, Energy)

Beauty-from-within

Head games Immunity Pill fatigue

Changing retail

landscape

Natural and specialty leads supplements market share

Source: Nutrition Business Journal (2017 preliminary estimates; $mil, consumer sales)

Mass Market Natural and Specialty MLM/Network Internet Practitioner Mail Order, DRTV, Radio

Growth by channel Market share by channel, 2017e

37%

26%16%

9%

7%5%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

2014 2015 2016 2017 2018e 2019e 2020e 2021e

Source: New Hope Network survey conducted Q1 2018 (N=155), All Manufacturer ResultsQuestion: How would you rate the importance of each channel over the next five years?

35% of surveyed branded supplement manufacturers think brick and mortar will not be at all important in 5 years

Not at all important Not very important Neutral Somewhat important Very important

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

E-Commerce

Brick and Mortar

Where supplement consumers expect to shop in next 2 years

1. Mass Market

2. E-Commerce – 3rd party (Amazon, etc.)

3. Grocery