US Fish Oil & Vitamins Market Update (by TABS Group and GOED)

TABS Group Survey: Vitamin Industry Growth Slows, While Consumers Switch To More Traditional Market Channels.

SHELTON, Conn., June 13, 2012 /PRNewswire/ — In its fifth year, TABS Group Annual Vitamin Study reports a small increase of 2 percent in vitamin sales versus 2011, to $12.2 billion. This is despite the percentage of US vitamin users in 2012 decreasing from 71 to 66 percent. In addition to trade-ups and price inflation, this development indicates most of the increased usage is emanating from current buyers purchasing more vitamins.  The survey likewise shows a significant shift in where consumers are purchasing vitamins

The TABS study confirmed secondary users left the market while remaining users compensated by buying more. “In the five years of conducting this survey, this is the greatest upheaval.  The continued shift of sales towards traditional channels accelerated and there were significant declines in the overall buyer base,” said Dr. Kurt Jetta, TABS Group CEO.

While multivitamins remain most popular with 75 percent of category buyers purchasing, others include Fish Oil (43 percent), Calcium (33 percent), Vitamin C and D (both at 32 percent) and Vitamin B (23 percent).  Buyer growth in Fish Oil and Vitamin D, two high growth areas in the past five years, has stopped. Only Vitamin B saw meaningful gains in 2012, 23 percent v 20 percent in 2011. “Except for Vitamin B, there were no areas of growth in attracting additional buyers which has implications for manufacturers and retailers over the next 18-24 months.  We project the category remains relatively flat, with growth coming from trading up existing customers,” continued Jetta.

The survey revealed a shift from specialty retailers towards mainstream. Target, Walgreens, CVS and online sales were the big winners, with Wal-Mart apparently stabilizing share, while catalogue and nutritional specialty retailers lost share.

Growth in the heavy buyers category was driven by women with a 36 percent increase from 2005, and the affluent (income $75,000 +).

“Longer-term, we are bullish on the category and view this as a short-term blip created primarily from unfavorable press.  Macro consumer trends (aging population, migration towards self-care, higher healthcare costs) point to solid gains over the next 10 years,” continues Jetta.

The TABS Group Annual Vitamin Study was conducted among 1,000 representative respondents aged 18-75. TABS Group is a leading provider of research, data analysis and consulting services to the consumer goods industry.

Specifically on fish oils, as reported by GOED:

GOED has been receiving data recently that growth of new consumers entering the United States omega-3 category has slowed or stopped. For example, on the recent market survey by research firm TABS Group found that growth in overall U.S. vitamin use has slowed and new buyer growth in fish oil products has stopped altogether. While the study reports that existing customers are trading up, market growth to this point has depended on new users entering the category, so the question is from where will our new consumers come?GOED recently commissioned U.S. consumer research on omega-3 users and non-users and found some interesting data points. Just over 53% of the adult population says they are trying to increase their omega-3 intakes, either from seafood, fortified foods, or dietary supplements, so new users to the category will have to come from the other 47%.One key insight is that age is a strong influencer on whether a person takes omega-3s, and in fact much of the marketing in omega-3s is targeted towards consumers managing diseases related to aging like cardiovascular or mental health. However, only 11% of the adult population come from the Baby Boomer and Silent Generations and are not trying to increase their omega-3 intake, making them potential new omega-3 consumers. On the other hand, 30% of adults are nonusers that fall into the the younger Millennial and Generation X groups. If you consider that some portion of nonusers are just never going to try to incorporate omega-3 in their diet, the summary graphic below shows that the real opportunity to continue growing the U.S. market will have to come from the younger consumers.

Dimitri Sclabos
Dimitri Sclabos

Founder and Co-owner