by Elizabeth BUI.
Dietary supplement bring natural alternatives to healthcare and benefit from a worldwide consumer trend : “go for naturalness!”
Which territory? With a continuous growth (3-7% CAGR ) since the past decade, US and EU VDS markets are driving the sector but by 2022 Asia would represent up to 47% of the total VDS market (Euromonitor Global consumer health report 2018), so now the question is to know where to invest to capture the growth opportunity?
Along the value chain, from the raw material providers (farmers & growers, collectors), to the ingredient manufacturers & distributors, through the blenders, the OEM/ODM and up to the dietary supplement marketing companies and brands, who creates the value? The basic raw material accounts for 50-75% of the ingredient ex-factory cost and the botanical ingredient cost represent up to 80% of the dietary supplement ex-factory cost (OEM), finally at the brand’s level, the marketing fees and marketer’s margin would represent up to 50% of the market retail price. So having all those data, can you decide where to invest?
To which extend innovation plays an important part in the market dynamics? The market is driven by the consumers but to which extend the brands and the ingredient manufacturers build attractions to this market? Definitely, the ingredient manufacturers are contributing, actively, to dietary supplement market innovation through their R&D investments, driving & managing the entire supply chain to reach a common goal : keep the market out of its commoditization, continuously add values.
Take a look at the latests ingredients innovations especially within the plant-based protein area, nutrient rich botanical extracts but also be curious about the enhancement of commoditized ingredients that provide better taste, better texture and solubility which gain consumer interest since delivery form within the dietary supplement space are moving towards more “food-like” ones.
Sustainability and transparency : Since consumers’ trust has been shaked in the past few years, they have the rights to request from the entire industry for better traceability of what they ingest, brands which enter into this space gain better consumer loyalty and preference. Along with the traceability, sustainability is driving millennials’ choices, so a player along the entire dietary supplement supply chain who can show case its engagement and communicate on this aspect has an advantage over the ones who do not.
Now you have the ingredients to further investigate within the growing dietary supplement market!
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