Australians’ increased desire to lead healthy lifestyles has influenced the success of a number of industries, and leading the way is the vitamins and supplements sector.
According to Euromonitor International’sVitamins and Dietary Supplements in Australia (April 2014) report the sector grew by 19 percent to reach $2 billion in 2013, and in the same year the vitamins market specifically grew by five percent in current retail value terms to reach $551 million.
Looking to the future, the market research company predicts vitamins and supplements will grow at a constant value CAGR of seven percent over the forecast period (2013-2018).
Euromonitor identifies the industry is tracking well due to the prevalence of low nutrient diets, as well as increased health consciousness.
“Australian consumers continue to struggle to acquire the recommended daily intake of nutrients through diet alone and are increasingly turning to supplements.
“An increased focus on health and wellness across the community over the forecast period, driven by the media and government, will be the main driver of demand of complementary medicines,” the report reads.
IBISWorld’s Vitamin and Supplements Stores in Australia report (July 2014), which focuses on the sale of vitamins and supplements reveals industry revenue has improved post GFC.
Uncertain economic times saw Australians opt for generic vitamin and supplements products from retailers including supermarkets, however an increase in consumer confidence since 2010-11 has seen them return to specialist vitamin and supplements stores.
The report states: “As the Australian economy has strengthened, consumers have allocated more of their spending towards discretionary goods, largely due to the rise of discretionary income over the past five years.”
Overall industry growth in the five years through 2014-15 is expected to grow at an annualised 4.1 percent to total $471.2 million, and the trend is set to continue – in the five years through 2019-20 revenue is forecast to grow 2.8 percent to total $540.2 million.
Aside from improved consumer confidence, the report identifies a range of other factors contributing to the industry’s growth, and it seems health consciousness and convenience are at the forefront.
1. HEALTH CONSCIOUSNESS
People are expected to exercise more in 2014-15 than they did five years ago, which means they will be more likely to seek vitamins and supplements to support their exercise regimes.
The importance of eating a balanced diet is also at the forefront, and so people seek vitamins and supplements to increase their intake of nutrients.
2. CONVENIENCE
Vitamin and supplement stores are convenient for consumers – they typically stock a large range of not only vitamins and supplements, but health foods.
They also employ trained staff who provide specialist advice to help customers achieve their health and fitness goals.
IBISWorld identifies this service in particular as a main competitive advantage for vitamin and supplement stores – while supermarkets and grocery stores offer low-cost generic products, they do not deliver tailored advice to customers.
Moving forward, it predicts vitamin and supplements stores will employ more in-store health professionals, such as nutritionists, dieticians and fitness trainers to meet customer demand.
#1 SUCCESS FACTOR
According to the report, the key factor contributing to business success within the sector is around the ability to franchise operations.
“The ability to franchise industry operations is crucial for independent stores to benefit off the established trading names of major vitamin and supplement stores, it reads.
Franchised brands that play in the space include:
- Mass Nutrition
- Muscle Beach
- GNC Live Well
- The Natural Way
Stay tuned for part two of this feature, where we take a look at another trend within the sector – the rise of discount pharmacy chains.