How the Current Economic Climate is Affecting Supplement Use

The current economic crisis is changing consumer behavior on every level. Consumption is being replaced by sustainability, possessions with purpose, and perceived value with real value. Current indicators show the impact of these changes will not be temporary adjustments, but a total realignment of consumer behavior based on a reevaluation of priorities. Tighter financial budgets obviously play a role in this reprioritization.

Based on the current economic challenges, consumers health is being adversely affected. Consumers are reporting fewer healthy food purchases (31 percent), increased weight gain (22 percent) and decreased use of dietary supplements (16 percent). Will the economic crisis, in turn, create a health crisis? What, then, are the implications for the dietary supplement industry as dissonance grows for consumers wanting to maintain health through supplementation, and conversely, wanting to cut costs overall, including the cost of supplements?

Economic Impact

While the recent economic downturn is creating a financial crisis for most of the population, it is also contributing to an increase in health issues. In fact, those who indicate they have been significantly affected by the latest economic crisis are more likely to rate their health as fair to poor (39 percent), compared to those less affected (28 percent). Further, consumers are reporting increased amounts of stress, sleeplessness and fatigue specifically caused by the economic situation (Figure 1).

In addition, economically affected consumers are exhibiting higher levels of joint problems, digestive problems and depression, revealing the pervasiveness of economic woes on the health of consumers. Even more concerning, consumers who are significantly affected by the negative economy are more likely to have cut back on doctors visits (42 percent vs. 18 percent of those less affected), and have stopped filling certain prescriptions because of the cost (30 percent vs. 12 percent).

With health care costs rising, including the costs of doctor visits and prescription medications, many consumers turn to supplementation to help manage their health. However, the current economy is even having implications on supplement usage. While almost half of consumers feel using dietary supplements is extremely/very important in maintaining their health, and three-quarters believe using dietary supplements is a primary way to promote healthy aging, many consumers are decreasing their supplement usage due to the economic downturn, with lower income groups showing higher decreases (Figure 2).

Industry Opportunities

Even while some consumers indicate a decrease in supplement usage, the dietary supplement industry does not report a significant decline in sales. This lack of a decline may be explained by a number of factors.

While the Light Supplement User (using fewer than four supplements/day) is significantly more likely than the Heavy User (four or more supplements/day) to indicate they have stopped using dietary supplements (22 percent vs. 10 percent, respectively) or are purchasing less-expensive supplements (7 percent vs. 4 percent) due to the economic downturn, the Heavy User is more likely to indicate supplement purchases have remained the same.

Conversely, New Supplement Usersthose consumers who have only used supplements for a year or lessare more likely to indicate they have increased their usage of single vitamins and multivitamins in the past year, compared to Longtime Users (those using supplements one year or more). Therefore, while Light Users may be using fewer supplements and Heavy Users usage has remained the same, a new group of consumers have just started using supplements and have increased their usage. These New Users are likely looking to boost their health in order to keep healthcare costs down, and they are turning to supplementation as the solution.

Compared to the Longtime User, the New User is more likely to be less affluent (significantly more likely to have a household income less than $50K) and younger. While the majority of supplement users initiated usage to improve overall health, consumers making less than $50K a year are more likely to have started using supplements to increase energy, treat specific health issues, improve mental abilities and honor their doctors recommendationall with respective marketing strategies and messages. In addition, New Users report feeling significantly more deficient in calcium, fiber, antioxidants, and vitamin D, highlighting possible combination formulas or specific product messaging targeted at the New User.

Perceived Value Vs. Real Value

In this new economic climate, consumers are seeking real value over perceived value. In other words, where perceived value tries to persuade consumers to simply consume, real value provides actual, long-term outcomes. While quality and clinical studies have been enough to prove effectiveness in the past, the current supplement consumer, in an effort to stretch every dollar, is setting the bar even higher and requiring tangible proof. In fact, the number of consumers who indicate they prefer to purchase supplements that have been clinically proven to be effective has dropped from 80 percent in 2000 to 64 percent in 2008. Even further, consumers show an 11 percent drop in their willingness to purchase the highest quality supplements versus last year. While clinical proof and quality are necessary claims, consumers are increasingly demanding these claims be made real to them. In turn, the value of supplement brands and claims are being weighed more heavily as cost becomes more of a factor (Figure 3).

Physician and pharmacist recommendations are strong drivers of dietary supplement purchases and provide a level of authority to label and marketing claims, especially to the New and Light Users. In fact, compared to Heavy Users, Light Users are more likely to trust their doctor and even their pharmacist for advice on vitamins and herbal supplements.

As consumers increasingly demand more bang for their buck, testimonials, physical proof and physician/pharmacist recommendations will increase the value of supplement brands. Even further, targeting the growing health condition awareness of the economically affected consumer, such as stress, fatigue, inflammation, and joint problems, will attract the attention of this consumer who is seeking some relief.

As consumers reevaluate their priorities, the dietary supplement industry will need to pay close attention to consumers shifting value and values set. By providing tangible, realizable value, the industry should be able to maintain a necessary position on consumers priority list.

Steve French is managing partner at The Natural Marketing Institute (NMI), a strategic consulting, market research and business development firm specializing in the health, wellness and sustainability marketplace. For more information on NMIs services or proprietary research tools, contact French at [email protected] or visit NMIsolutions.com .