By Jill Rivkin

Life is expensive, and though reportedly the economy is on an upswing, many consumers still feel financial strain and are seeking more cost-effective solutions to life’s daily needs. And, unfortunately, a vast number of Americans are unemployed and uninsured. This atmosphere is creating a boon for health and wellness solutions that don’t require a visit to a doctor or hospital.

The current trend to self-medicate and refocus on disease prevention has catalyzed the nutritional and dietary supplement market recently. According to Chicago’s Euromonitor, “macro factors such as the aging population and growing consumer confidence in vitamins and dietary supplements will continue to drive sales.”

“The supplements manufacturing industry is faring very well despite these rough economic times,” says Jason Provenzano, executive vice president at Nutricap Labs, Farmingdale, N.Y. “Based on what we’ve seen, more and more people are indeed self medicating to avoid paying expensive co-pay fees at the doctor’s office or simply to take preventative measure so they do not become ill.”

Dan Alhadeff, senior vice president of marketing and sales at Miami-based Nutri-Force Nutrition, agrees: “For the past decade or so there has been a growing acceptance of nutritional supplements in the mainstream consumer base as a means of preventive medicine,” he says. This, he adds, can be partly attributed to stricter standards and thus increased consumer confidence, as well as a growing amount of buy-in from the medical community.

“As consumers increasingly try to manage their healthcare costs, they are turning more and more to dietary supplements to help maintain their health and prevent illness,” says Matt Wolf, chief executive officer at Contract Pharmacal Corp. (CPC), Hauppauge, N.Y.

However, despite growing acceptance, by no means would players in this segment say it’s a smooth road. In such a highly regulated industry that has such high stakes — people’s health and well-being — there is extreme scrutiny and a lot put at risk by manufacturers that may bend the rules, or disregard them altogether.

“The biggest challenge over the past 10 years has been credibility,” Alhadeff adds. “The unfortunate abuse of consumer confidence hurt our industry for a long time, but we have made tremendous strides.”

“The issue of credibility and regulation still looms as the biggest risk to the segment,” says Kenn Israel, vice president of marketing at Robinson Pharma Inc., Santa Ana, Calif. “Specifically, there is a seemingly unending parade of irresponsible and unethical marketers/manufacturers placing adulterated or unapproved products in the market or unethical marketers making unsubstantiated and illegal claims about products.”

Israel adds that, from his perspective, these problems are not the result of insufficient regulations, but from insufficient enforcement.

The Role of Regulators

“Currently the FDA and FTC have the authority and mandate to remove from trade every adulterated or mislabeled product, but they lack the budget, manpower and perhaps the sense of priority to execute on this critical function,” Israel says.

But, he points out, he’s optimistic as the industry “welcomes the improved credibility that will develop as the recognition that the industry is fully regulated catches on,” he says, pointing to the new Good Manufacturing Practices (cGMP) provisions of the 1994 DSHEA (Dietary Supplement and Health Education Act) law.

The dietary supplements market has a different set of regulations than those covering conventional food and drug products. According to the FDA: “Under the Dietary Supplement Health and Education Act of 1994 (DSHEA), the dietary supplement manufacturer is responsible for ensuring that a dietary supplement is safe before it is marketed. FDA is responsible for taking action against any unsafe dietary supplement product after it reaches the market. Generally, manufacturers do not need to register their products with FDA nor get FDA approval before producing or selling dietary supplements. Manufacturers must make sure that product label information is truthful and not misleading.”

Tina Mori, vice president of business development at Naples, Fla.-based Vitarich Laboratories Inc., says that DSHEA is being reviewed. This could create challenges for the industry with new expectations and increased policing to ensure products are manufactured under GMP regulations, that testing and audits happen and that DSHEA is “protected,” she adds.

But despite the complexity and the evolution of FDA regulations, many manufacturers agree that they have bolstered the segment by building confidence in supplements and are worth the effort.

According to Provenzano, “It’s more a matter of getting on the same page as the FDA, rather than issues with specific regulations. There has been a lot of changes with what they require and little has been written in stone.”

What’s In Demand

The supplement segment touches a wide range of applications, appealing to extremely variant needs, points out Bev Phillips and Mia Stehlik, account managers at Ada, Mich.-based Access Business Group. Some consumers seek alternatives to medical treatment for specific issues such as digestive health and bone strength, while others seek products to help with overall healthier lifestyles such as antioxidants, amino acids, products without corn syrup, or with reduced fats and sugars, fiber claims and whey proteins.

CPC’s Wolf says each demographic segment is looking for something specific and thus creating opportunity for brand owners and manufacturers. “Baby boomers are increasingly seeking fish-oil products for heart health, glucosamine and chondroitin for joint health, as well as weight-management and anti-aging solutions,” he says. “Gen-Yers are most often buying fitness, energy and prenatal products; and our youngest consumers — children under the age of 12 — are providing marketing opportunities for the industry.”

Euromonitor reports that while currently the majority of vitamins and dietary supplements are targeted at older consumers, young adults are a “robust growth opportunity,” thanks to their efforts to prevent illness associated with age, as well as their image-conscious efforts to stay youthful inside and out. But, Euromonitor reports, brand owners and manufacturers are not doing a good job at reaching them: “Manufacturers are eager to encourage this demographic into vitamins and dietary supplements but have not yet found an effective way to connect with younger consumers. For many consumers in their 20s, vitamins and dietary supplements are products that their parents use. Manufacturers that can break that perception will add significant sales to vitamins and dietary supplements overall and their brands.”

And, of course, there is the senior generation, which “is increasingly buying a wide range of dietary supplements, including daily vitamins and products for memory, heath and joint health,” Wolf says.

Some consumers seek specialty items such as products contributing to eye health, joint health and anti-aging, but as usage broadens, consumers are looking for items that are slightly broader, as well. Immunity-boosting products and those loaded with antioxidants are popular, and vitamin D supplements are in demand as the winter months make sunshine scarce. Fish oil has been lauded as a key to heart health, and long a staple in the supplements segment, weight-loss products still are popular, manufacturers say. And as food and beverage companies become more innovative, functional beverages and energy drinks offer new — and often tastier — delivery mechanisms for many of these popular ingredients.

“From an ingredient perspective, Omega 3 from fish oils remains as the biggest success story in the industry and continues to post year-to-year double-digit sales growth,” Israel says. “The success and future of this dominant trend are driven by continued scientific support for claims and excellent overall product quality.”