Vitamins Minerals Supplements Market Trends in 2023

The vitamin, mineral and supplements (VMS) market boomed during the pandemic, with growth of approximately 14.5% in 2020, continued strength in 2021, followed by slower growth in 2022. Now, with the worst of COVID-19 in the rearview mirror, consumers are maintaining an increased focus on health and wellness, self-care, and preventive solutions. In 2023, against a backdrop of high inflation and concerns about a looming recession, VMS brands must understand the key trends impacting this market to find ways to differentiate their offerings and unlock future growth.  

Top 2023 VMS trends 

The top trends expected to impact the VMS market in 2023 can be viewed through five core lenses: secular, macro, evolving models and channels, changing consumer demand, and product innovation.  

Secular

• Aging demographics: Baby boomers are the most frequent users of VMS, with 50% indicating they take at least one supplement a day. And the U.S. population overall is forecast to continue aging due to the ongoing decline in fertility rates and an increase in life expectancy, creating a growing base of VMS users and a tailwind for the industry. 

• Millennial segment growth: Millennials have the highest average annual monthly VMS spend ($70 per month), according to a recent survey conducted by L.E.K. Consulting. Younger generations have also had the fastest-growing weekly median earnings compared to older cohorts (ages 45+) from 2016 to 2022, demonstrating their increasing purchasing power and making them an attractive target VMS consumer.

• Preventive health: Healthcare costs continue to rise, with the national health expenditure anticipated to increase by 5.2% per year from 2022 to 2030F. In the meantime, 75% of current healthcare spending is related to chronic diseases, and an incremental 14 million people are expected to have at least one chronic condition over the next 10 years. This combination of rising healthcare costs and the growing prevalence of chronic conditions is contributing to a shifting consumer mindset toward prevention.

• Regulatory scrutiny: The Food and Drug Administration is stepping up its scrutiny of supplements; the number of warning letters sent to supplement companies from the agency more than doubled from 2017-2018 to 2021-2022. This scrutiny, coupled with the ongoing threat of consumer class action lawsuits against supplement companies, creates headwinds for the industry and puts additional pressure on brands to establish trust with consumers. 

Macro

• Inflationary and recessionary concerns: Despite recent record-high inflationary levels, an L.E.K. survey found that VMS consumers spent the same amount of money on nutritional supplements in 2022 as they did in 2021. A recession, however, presents a slight potential headwind, with consumers expecting to spend roughly 3% less on VMS should a downturn take place. 

Evolving models and channels

• Digital native brands: The online channel has experienced outsized growth, supported by the growing emergence of digital native brands. Digitally born brands such as Goli and Ritual have used digital marketing and social media — including influencers — to broaden their exposure and the appeal of the VMS market, particularly among younger consumers.

• Personalized nutrition: Consumer awareness of personalized nutrition rose from 39% prior to COVID-19 to 53% afterward. Meanwhile, major companies have been investing in personalized nutrition (e.g., Bayer’s acquisition of Care/of in November 2020), driving momentum on the supply side.

Changing consumer demand

• Experiential well-being: As consumers continue to seek condition-specific solutions with perceptible benefits, experiential well-being (i.e., sleep, stress/calm/mood and cognitive health) has outpaced overall VMS growth.

• Transparency: Among general consumers, 72% indicate that label or website transparency influenced their likelihood to purchase consumer products, and VMS brands are responding by clearly listing ingredients and their origins. 

• Sustainability: Among supplement consumers, 66% indicate sustainable ingredients influence their purchasing decisions. VMS brands are taking a multifaceted approach to incorporate sustainability into their products and brand, including some brands shifting away from plastic to recyclable packaging. Nearly two-thirds of consumers overall indicate they are willing to pay more for sustainable products.

Product innovation 

• Natural products and ingredients: VMS consumers, similar to those of other product categories (e.g., food and beverage, beauty and personal care), are now placing more focus on ingredients and clean labels. When it to comes to choosing supplements, 33% of consumers prefer supplements from natural sources, 32% want supplements free from allergens, 31% search for supplements without preservatives and 31% want supplements that avoid artificial colors and flavors. 

• Innovative formats: Consumers continue to seek nonpill formats, such as gummies, liquids and single-serve powders (e.g., stick packs), which they view as easier and/or more enjoyable to take than traditional formats. Indeed, nonpill formats grew 15% yearly from 2016 to 2021, compared to 1% annual growth for pills. 

How brands can differentiate and find ways to unlock growth 

Target younger consumers: Younger consumers, given their high category spend and high future purchasing power, are a critical segment to reach in order to drive growth. To better reach this consumer segment, online presence in both product availability (e.g., Amazon) and digital marketing and social media campaigns (e.g., TikTok, Instagram) is a key area to focus on. 

Invest in fast-growing segments: Experiential well-being categories such as sleep, stress/calm/mood, cognitive health and beauty from within have outpaced broader VMS growth in recent years. Brands must assess whether they have the “right to win” and the necessary capabilities to organically develop products in these segments or if entry via acquisition is a better pathway.

Continue to innovate: Natural ingredients, new product formats, multibenefit solutions, traceability (e.g., certifications/claims) and sustainability initiatives (e.g., packaging, ingredient sourcing) can be used to differentiate and gain share.

Prepare for a downturn: VMS companies should take a page from the playbook of consumer packaged goods companies to find strategies that have been effective in the past under similar economic conditions. Diversifying points of distribution, including bolstering presence in value-oriented channels, emphasizing preventive care, and revisiting pricing/promotional strategies such as fine-tuning price pack are just a few examples. Emphasizing innovation is also particularly important in a downturn, as it helps brands differentiate from private labels (which see an uptick in a recession).

In the face of economic headwinds and continually evolving consumer preferences, brands should look for opportunities to capitalize on emerging trends to differentiate and drive growth in 2023.

For more information, please contact strategy@lek.com.