Vitamin Sales Surge
Investments in Vitamins and Supplements Pay Off
Health and wellness have been at the forefront of people’s minds during the pandemic, which has boosted sales of vitamin and mineral supplements. Since March, sales of dietary supplements in the US have gone up by 51.2%.
This boom has benefitted companies like Nestlé (NSRGY), Procter & Gamble (PG), and Reckitt Benckiser (RBGLY), which have all made investments in the dietary supplements industry recently. Nestlé acquired Atrium Innovations, a Canadian supplement-maker, for $2.3 billion in 2017. P&G bought the vitamins and supplements arm of Merck (MRK) for $4.2 billion in 2018, and Reckitt purchased Schiff Nutrition for $1.4 billion in 2012. These investments are paying off as vitamins and supplements fly off shelves.
Younger Generations Drive Demand
COVID-19 has put the health and wellness industry in the spotlight, but the industry was growing even before the pandemic began—largely driven by millennials and Gen Z. On average, these generations exercise more, smoke fewer cigarettes, and are more conscious of their diets than their parents. They are also more interested in dietary supplements.
Digital subscription services for vitamins are also seeing huge growth. This is partially because people are hesitant to go to brick-and-mortar drugstores, and because much of the demand for vitamins is coming from younger consumers. Startups like Ritual, based in Los Angeles, and Care/Of, based in New York, have seen their popularity grow recently.
Mergers and Acquisitions Could Be on the Way
The dietary supplements industry is worth about $109 billion, but it is very fragmented. Amway, the market leader, only accounts for about 3.5% of the industry.
Analysts expect the industry could see a number of mergers and acquisitions in the near future. GSK (GSK) is making plans to spin off its consumer health arm, a joint venture with Pfizer (PFE). Sanofi (SNY) may also be looking to sell its consumer health operations. Both of these could be sought-after acquisitions, especially given the consumer health industry’s recent growth.
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