An aging and increasingly health-conscious population will industry drive demand.
New York, NY (PRWEB) March 15, 2014
The Online Vitamin and Supplement Sales industry grew consistently each year for the past five years due to the steadily increasing popularity of industry products. During the recession, consumers had less disposable income and partially cut back on discretionary vitamin purchases, however, the pace of online vitamin sales growth did not slow. In addition, as healthcare costs increased, Americans have turned to vitamins to prevent illness as an alternative to expensive prescription drugs, boosting demand. In particular, baby boomers, who wield strong purchasing power, depended on industry products to help prevent their physical conditions from weakening with age. The convenience afforded by online shopping further benefited sales. Consequently, Online Vitamin and Supplement Sales industry revenue grew an annualized 13.0% to $2.7 billion in the five years to 2014, including 12.1% growth in 2014.
According to IBISWorld Industry Analyst Antal Neville, “Despite this growth, some operators were far less profitable than others.” Vitacost, for example, has operated at a loss since 2010 when it took on additional inventory to expand sales. The industry relies on human labor to operate, but technological developments, such as computer programs, made stock purchases more efficient and inventory management more accurate, leading to reduced labor costs. Capital costs are low because companies are not required to lease storefronts; in fact, many operate out of an owner's residence. Additionally, as the economy recovered and consumers became more willing to pay higher prices for vitamins and supplements, operators were able to raise product prices leading to higher profit.
“In the next five years, the industry is forecast to consistently grow as Americans become increasingly health-conscious and use vitamins to augment the nutritional value of their diets,” says Neville. Disposable incomes will also grow in line with economic recovery, enabling consumers to buy higher-priced items and larger quantities of vitamins. However, as unemployment falls, more people will gain access to health insurance through their jobs. More insurance coverage is a double-edged sword; some individuals may consume more vitamins if their health plans cover them, while those motivated to consume vitamins as a preventative measure when they do not have coverage may demand fewer industry products. Nonetheless, the number of people aged 50 years and older will continue to be a major source of demand.
For more information, visit IBISWorld’s Online Vitamin and Supplement Sales industry in the US industry report page.
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IBISWorld industry Report Key Topics
The Online Vitamin and Supplement Sales industry sells vitamins, minerals, herbs and other dietary supplements on the internet. The industry excludes operators that primarily sell pharmaceutical drugs.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
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