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Industry Must Wean From Boom-and-Bust
Nutrition industry growth theorists tend to fall into two camps. There are those that expect steady growth with consistent consumer penetration as a result of accumulated science. And there are those that wait for breakthrough products to create a wave of interest and sales to carry the whole industry. No doubt every company wants to manufacture or market the next breakthrough product, but it is hardly a strategy for sustainable industry growth. Unfortunately the nature of American business being the way it is, much of the nutrition business falls into the latter camp. Strategic emphasis is placed on the short-term search for the elusive new product to skyrocket a company to the top or boost quarterly earnings, and too rarely on the long-term investment in scientific data to broaden penetration of proven products.
Another theory has it that the next wave of growth will come from converting the occasional user into the regular user. But this will require not only more convincing science, but better quality standards and consistently positive media treatment. Again the majority of the industry seems not to be on board, choosing to overemphasize product novelty and in the process transferring their core regular-use customer from product to product, rather than retaining them and converting the more numerous occasional purchasers. The data presented on this page perhaps offers a hint of this tendency. The industry has benefited broadly from breakthrough products each year, but the curve plotting the scale of emergence is trending downward, just like the growth rate of the whole industry. Breakthrough products in 1999 may be glucosamine again, or kava, CoQ10, SAMe or cellasene (although the expense of the latter two may inhibit their chances), but there seems to be no "rising tide" product that will lift all boats in 1999.
Secondly, and perhaps more alarmingly, sales in the biggest breakthrough category, herbal supplements sold in the mass market, leveled suddenly in early 1998 and has stayed relatively flat since. Some observers ascribe this leveling to skeptical media scrutiny following the herbal launches by the three major pharmaceutical firms. Declining price is not a factor as ... excerpted from April '99 issue of NBJ.
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