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TABS Group: Vitamins market grows 20%

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SHELTON, Conn. — The U.S. market for vitamins, minerals and supplements has grown by more than 20% over roughly the past year and a half, according to TABS Group Inc.

The U.S. market for vitamins, minerals and supplements has grown by more than 20% over roughly the past year and a half, according to TABS Group Inc.

The marketing research and consulting firm said Monday that it pegs the vitamin, minerals and supplements (VMS) market in the United States at $11 billion, well below the $20 billion-plus cited by other industry sources but still much higher than its prior estimates, stated Kurt Jetta, president of TABS Group, which last sized up the market in January 2008.

"The two reasons for this increase are a 20% to 25% expansion in category sales as well as an improvement in the way we account for pricing variances in the different channels," Jetta explained. "We have found, for example, that that average unit pricing in the specialty [retail] channels is 50% higher than in food, drug, mass [retail channels]."

He noted that the reason for the market growth found in the 2010 TABS Group Vitamin Study, which was fielded last month, stems almost entirely from consumers using more types of VMS products.

"There was no increase in the actual number of buyers in the category versus 2008. The VMS penetration in the U.S. stands at 67%," said Jetta. "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 now part of the mainstream of consumer buying habits."

Walmart is the leading VMS retailer with 16% of sales, though the warehouse club channel has nearly a 16% share of all outlet sales, according to the TABS study. Costco Wholesale Corp. has a particularly strong business, with about a 9% share of market.

The traditional food/drug/mass/club/dollar retail channel still controls the majority of VMS sales, with about 60% of all dollars. The study found that 85% of category buyers purchase in these channels, whereas only 35% purchase in alternative channels, which include health food stores, nutrition specialty stores, online retailers and other outlets.

Alternative channels have the heaviest shoppers in the category, as they capture the majority of sales from the most active buyers (more than six product types), TABS reported. This buyer group is 10% of the VMS buyer base but accounts for 33% of category sales.

Online/catalog outlets continue to be a major factor in the VMS market with 11% of sales, while nutrition specialty stores such as GNC and Vitamin Shoppe account for 12% of category sales.

TABS said 20% of VMS buyers shop in both traditional and alternative channels, and they are the heaviest shoppers, doing just over 30% 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," Jetta commented. "We see dramatic differences in pricing, assortment, promotion and the role of private label in these formats."


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