TABS Group, Inc., a leading marketing research and consulting company based in Shelton, CT, has released their latest estimate of the size of the Vitamin, Minerals and Supplements (VMS) market in the U.S. According to Dr. Kurt Jetta, President of TABS Group, the market has surged by about 20% since the last time an estimate was done in January 2008.
"Our estimate of the market is $11B, which is well below the $20+ Billion sited by other industry sources, is still much higher than our prior estimates," stated Jetta. "The two reasons for this increase are a 20-25% expansion in category sales as well as an improvement in the way we account for pricing variances in the different channels. We have found, for example, that that average unit pricing in the Specialty Channels is 50% higher than in Food, Drug, Mass."
Jetta explained that the reason for the market growth was driven almost entirely from category users adding additional product types to their VMS portfolio. "There was no increase in the actual number of buyers in the category vs. 2008. The VMS penetration in the U.S. stands at 67%," explained Jetta. "We see the largest gains in the number of product types purchased per consumer. Several Supplement types like Fish Oil, Acidophilus, and Co-Q10 are not only higher-priced than traditional Vitamin types, but are now part of the mainstream of consumer buying habits."
Other key highlights of the study were as follows:
- Wal-Mart is the leading VMS retailer with 16% of sales. The Club Channel, however, is also close to a 16% share of All Outlet sales. Costco has a particularly strong business with about a 9% share of market.
- Traditional channels (Food/Drug/Mass/Club/Dollar) still control the majority of sales with about 60% of all dollars. 85% of category buyers purchase in these channels, whereas only 35% of VMS buyers purchase in the alternative channels (Health Food, Nutrition Specialty Stores, Online, etc...). Less than half the alternative channel buyers do not purchase in FDMCD.
- Alternative Channels have the heaviest shoppers in the category as they capture the majority of sales from the most active buyers (6+ Product Types). This buyer group is 10% of the VMS buyer base, but they account for 33% of category sales.
- Online/Catalogue continues to be a major factor in VMS with 11% of sales. Nutrition Specialty (GNC, Vitamin Shoppe, etc...) account for 12% of category sales.
- 20% of VMS buyers shop in both traditional and alternative channels (aka "dual-outlet shoppers"), and they are the heaviest shoppers, doing just over 30% of VMS sales.
"While there certainly seems to be some opportunity for retailers to capture more dollars from the 'dual-outlet' shoppers," stated Jetta, "there needs to be some recognition of the merchandising differences between traditional and alternative channels. We see dramatic differences in pricing, assortment, promotion and the role of private label in these formats."