Blurring the Line: The Evolving Food-Supplement Gap in the United States

September 17th, 2012
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CA2_BlogAnalyst Insight by Chris Schmidt, Consumer
Health Company Analyst at Euromonitor International

the US Food & Drug Administration's (FDA) August 2012 announcement to
provide the industry with more complete guidance distinguishing between
beverages and liquid dietary supplements, Euromonitor International examines
the growing convergence between foods and vitamins and dietary supplements and
its impact in the world's largest consumer health industry – the US.

Supplement usage high and growing in the US

to a 2011 National Institutes of Health (NIH) study published in the Journal of
Nutrition, 54% of all American adults took dietary supplements in 2006 (the
last year figures were available). That figure, which was up by nearly 10
percentage points in the last decade, trails more recent industry survey
results, many of which point to usage in 2011 hovering around the 70% mark. VDS
enjoy broad acceptance in the United States, where nearly half of all users
reported using more than one supplement daily, and nearly 10% took five or more
supplements a day. While all-in-one multivitamins remain the most commonly
taken supplement, a rising consumer interest in nutrition and the skyrocketing
popularity of daytime health and wellness television programs like “Dr. Oz”
have helped spark a new mass interest in specialty supplements, such as vitamin
D, fish oils, and probiotics, especially among the category's traditionally
less-sophisticated consumers.

VDS Spending (RSP and Per Capita) in the US, 2001-2011


Food and drink formats appeal to both consumers and

consumption of vitamins and dietary supplements increases, suppliers are facing
growing pressure to differentiate their products, while also combating the
dreaded phenomenon of “pill fatigue”. Resultantly, the VDS category has seen a
significant blurring of the lines in recent years between supplements and foods
and beverages. The US VDS category has historically featured a high rate of
innovation, aided greatly by the country's lax regulations regarding pre-market
approval. On the consumer side, demand for more easily ingestible formats
remains high across a number of key demographics. Among baby boomers and the
elderly (who consume the most supplements, according to the NIH study), the
number of supplements and prescription medications they take, combined with
aged-related swallowing issues, makes liquids, mixable powders, and gummy or
soft-gel formats particularly popular. On the opposite end of the spectrum,
younger consumers, including the much ballyhooed Millennials, appreciate the
greater on-the-go convenience and more modern aesthetic of supplements in
food/beverage formats.

the supply side, new format uptake has been rapid. While many vitamin brands
come in gummy or soft-gel varieties, the category's heavyweights, including
Pfizer Inc and Otsuka Holdings Co Ltd, are increasingly taking cues from more
niche producers by introducing supplements in even more innovative formats,
including powders that can be sprinkled over food or added to drinks and
standalone RTD liquids. Big Pharma's recent supplement acquisitions also show a
trend toward alternative formats, as witnessed by two of the most well-known
predominantly non-pill supplement producers – Alacer (maker of Emergen-C) and
Airborne – both being acquired in 2012 (by Pfizer and Schiff Nutrition International
Inc, respectively).

Innovation has outpaced regulation

regulators have struggled to keep pace. The FDA's main supplement regulation,
the Dietary Supplement Health and Education Act (DSHEA), was written into law
in 1994, years before many of these new formats went mainstream. Drink formats
have provided the greatest challenge for the nearly 20-year statute, which
stipulates dietary supplements may not be “represented as a conventional food”,
but does not define “represented”. Liquid dietary supplements have been growing
strongly in the US recently, and a host of traditional juice sources – such as
aloe and bitter cherry – have become popular as platforms for liquid dietary
supplements. Current guidance exists only in (non-statutory) draft form, and
while the inclusion of non-traditional food additives would seem to provide
clear delineation between beverages and supplements, some exotic fruit juices
(Noni, Mangosteen, etc.) are marketed as dietary supplements, despite being
100% fruit juice.

Spot the Supplement – The Blurry Line between Supplement
and Beverage


the rise of energy drinks and energy shots has only compounded the problem.
While energy shots are generally small, concentrated mixes of caffeine and b
vitamins, energy drinks are often larger format and sold next to standard sodas
and juices in US retail outlets. This lack of transparency in labelling and
in-store positioning has led to a generally low level of understanding among
consumers vis-à-vis supplements versus beverages. Given the high levels of
caffeine and other stimulants in these drinks, lawmakers and consumer advocate
groups have raised concern. In April 2012, US Senator Dick Durbin called on the
FDA “to take regulatory action to address the rising health concerns around
energy drinks." While the FDA announced in August 2012 that it did not see
energy drinks as a public health risk, it acknowledged that guidance is lacking
and implied it was close to finalizing its standards for beverage vs. supplement

magnitude of the issue is clear. Tonics and bottled nutritive drinks (under
which Euromonitor International tracks energy shots and similar liquid dietary
supplements) is expected to be one of the fastest-growing categories in US
consumer health
throughout the forecast period, far outpacing the rest the
overall VDS category. By 2016, retail value sales are expected to increase 54%
in constant terms to US$2.1 billion. Without comprehensive guidelines from the
FDA, the explosive growth of the category driven by manufacturer desire to
appeal more strongly to consumers alternative format demand (as part of a
greater health-and-wellness-focused lifestyle) will invariably lead to more
launches, more blurring of the lines, more confusion and, possibly, more
adverse effects from over-usage.

Have a question or a thought to add? Leave us a comment below.
  • Christine Eubanks

    “While the FDA announced in August 2012 that it did not see energy drinks as a public health risk, it acknowledged that guidance is lacking and implied it was close to finalizing its standards for beverage vs. supplement labelling.”
    Really? Energy drinks don’t have any risk? I think energy drinks can cause UTI if your keep on drinking it.
    Christine Eubanks