NBJ Supplement Business Report

nbj Nutrition Business Journal Welcome to the wild world of dietary supplements, brought to you by Nutrition Business Journal. We've been tracking the advance of supplements into mainstream culture for 15 years, and here's what the market looks like to us at the tail end of 2013. Major Trends Whole-food Supplements • Consolidation • Personalization Our research found a healthy market for dietary supplements in 2012. Protein-rich categories, like sports nutrition and meal supplements, saw double-digit growth, even as popular opinion about the market's character deteriorated. +7.5% NBJ's current forecast for 2013 shows steady growth, but that's a +7.6% bit misleading. The supplement industry faces some of the biggest opportunities and challenges of its young life, and the stakes have never been higher. So sales might be up, but so are the risks. Whole-food Supplements The advance of supplement formulations grounded in whole foods with light-as-a-feather processing presents real opportunity for the industry to realign itself in the consumer psyche. After all, 'let food be thy medicine' started this whole thing off, right? "I have been really impressed to see how the food-based Whole-food supplements versus rest of market (2009-2015) WHOLE-FOOD SUPPLEMENTS REST OF MARKET supplement sector is proactively working to develop transparency and non-GMO sources. There's a can-do attitude there." - Megan Westgate Non-GMO Project SALES 2009 2010 2011 2012 2013e 2014e 2015e TOTAL 27,001 28,210 30,198 32,458 34,957 37,622 40,450 Source: NBJ estimates, consumer sales, $ mil. GROWTH 2010 2011 2012 2013e 2014e 2015e TOTAL 4.5% 7.0% 7.5% 7.7% 7.6% 7.5% Source: NBJ estimates, consumer sales, $ mil. Consolidation As supplements translate into big business-$32.5 billion in 2012 sales by our count-big business comes calling. Insiders fear the impact to innovation and authenticity as large, well-heeled acquirers from pharma and CPG come knocking. Look how different the industry could look in just a few years' time. 2009 2015 | CPG: 5% CPG: 8% Public: 13% Public: 16% Private Equity: 18% Private Equity: 19% Pharma: 21% Pharma: 40% Private/Other: 42% Private/Other: 18% U.S. Supplements Share Ownership Source: NBJ estimates with forecasting by Tom Aarts, Nutrition Business Advisors The New Strategic Acquirer: Big CPG likes VMS S125M PGG buys new chapter. A landmark deal that signals a significant change in the mindset of the globe's largest players in consumer packaged goods. Will every large CPG want a supplement brand? CL AR Reckitt Benckiser buys Schiff. Yes, every large CPG will want a supplement brand, Another landmark deal that sent valuations up and left Bayer sidelined in its search for more progressive assets in nutrition. Personalization Shotgunning supplements and hoping for efficacy is so 1994. The future of nutrition as a true therapy for lifestyle-based illness rests in personalization, the bleeding edge of medicine that combines genomics with deep bloodwork to target disease before it sets in. You'll be hearing a lot more about this drive-right medicine, right patient, right time- and seeing smart supplement companies respond in kind. You'll also see ancillary industries like app development and big data analytics step up to the supplement plate. NBJ Consumer Survey: Feelings About Personalized Medicine Source: NBJ survey of 1,313 consumers conducted between 1/24/2013 6 2/7/2013. Question: "In general, how do you feel about personalized medicine?" I do not believe it will possible: 9.2% I believe it will be availabe within my lifetime: 14.7% Anxious toward it: 20.2% | Hesitant toward it: 26.2% No idea what it is: 29.7% The Future of Healthcare Driven by Paradigm Shifts in Medicine & Technology What is Personalized Lifestyle Medicine? Healthcare Crisis Publk Health Inltlatives (Obamacare) SOMARIER Private Health Initlatives Onsurers, Corporate Wellness) LIfestyle Healthcare P4 Medicine (Personalized, DIET Medicine Preventative, Predictive, Participatory) Personalized Lifestyle Medicine Personalized Lifestyle Medicine CARE Nutriklon, Rx LIfestyle Theraples * (Genetiks & Blomarkers) Accessible Dlagnostics NUTRITION ENV STRESS Innovative Dlagnostics Innovative Self Care (Quantified Self) Moble Soclal Computing Big Technology Networks Power Source: Personalized Lifestyle Medicine Institute This is just the tip of the iceberg. To dive deeper, pick up NBJ's 2013 Supplement Business Report, available at newhope360.com/nbj-2013-supplement-business-report. The report includes historical sales results by product category and channel, as well as forward estimates that leverage 15 years of dedicated research. This is what we do- provide intelligence for manufacturers, suppliers, investors and marketers to benchmark their business and base their insights and innovation in solid data. Brought to you by ... nbj Nutrition Business Journal C Penton 26,051 1,020 %t't 27,189 RONMENT 1,138 090'67 7.3% 1,274 31,184 ACTIVITY 0%L'EL 1,449 7.5% CENOMICS 33,508 1,656 %EL 35,965 | 7.2% 1,894 38,556