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The vitamin, mineral and supplement (VMS) market is now about $11 billion in the United States, according to TABS Group, Inc., a Shelton, Conn.-based research and consulting company, which added that the category had grown by approximately 20 percent since the last time it did an estimate, in January 2008.
Although the current estimate “is well below the $20-plus billion sited by other industry sources, is still much higher than our prior estimates,” said TABS president Dr. Kurt Jetta. “The two reasons for this increase are a 20 percent to 25 percent 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 percent higher than in food/drug/mass.”
Jetta added that market growth was driven almost entirely by category users adding additional product types to their VMS portfolios. “There was no increase in the actual number of buyers in the category vs. 2008,” he explained. “The VMS penetration in the U.S. stands at 67 percent. We see the largest gains in the number of product types purchased per consumer. Several supplement types, like fish oil, acidophilus, and CoQ10 are not only higher-priced than traditional vitamin types, but are [also] now part of the mainstream of consumer buying habits.”
Among other key highlights of the study:
—Walmart is the leading VMS retailer, with 16 percent of sales. The club channel, however, is also close to a 16 percent share of all outlet sales, particularly Costco, which has about a 9 percent share of market
—Traditional channels (food/drug/mass/club/dollar) still control the majority of sales, with about 60 percent of all dollars. While 85 percent of category buyers purchase in these channels, just 35 percent of VMS buyers purchase in alternative channels such as health food stores, nutrition specialty stores or online. Fewer than half of the alternative channel buyers don’t purchase in traditional channels
—Alternative channels have the heaviest shoppers in the category, as they capture the majority of sales from the most active buyers. This buyer group makes up 10 percent of the VMS buyer base, but they account for 33 percent of category sales.
—The online/catalog channel continues to be a major factor in VMS, with 11 percent of sales, while nutrition specialty stores such as GNC and Vitamin Shoppe account for 12 percent of category sales
—The 20 percent of VMS buyers who shop in both traditional and alternative channels — known as “dual-outlet shoppers” — are the heaviest shoppers, accounting for over 30 percent of VMS sales
“While there certainly seems to be some opportunity for retailers to capture more dollars from the dual-outlet shoppers, there needs to be some recognition of the merchandising differences between traditional and alternative channels,” noted Jetta. “We see dramatic differences in pricing, assortment, promotion and the role of private label in these formats.”
The 2010 TABS Group Vitamin Study was conducted in May among 1,000 representative respondents age 18 to 75 in the TNS panel. The responses were combined with TABS Group’s proprietary modeling capabilities to derive the market size estimates for the vitamin category.