Shake Weights, Five-Hour Energy, and the Nutraceutical Boom
Selling your nutraceutical business? Revenues in the industry are projected to be over $30 billion next year, and I have a long list of prospective buyers to share with you.
It’s a great time to own a nutraceutical company. Revenues in the industry are projected to be over $30 billion next year, and, according to IBISWorld, the industry is forecasted to expand between 4-5% for the next 5 years.
It’s not hard to see why. People are trying to achieve a healthier lifestyle by eating a better diet, exercising more, and taking supplements. Just look at the explosion of stores like Whole Foods and Central Market, all specializing in catering to “foodies” by selling organic foods at premium prices. New exercise programs and equipment are all the rage, such as P90-x, Insanity, and the infamous Shake Weight that was so cleverly parodied on Saturday Night Live. Yoga, Pilates, and spinning classes are springing up anywhere there is space. And don’t forget to set your DVR to record Dr. Oz’s TV show every day–he now has his own line of supplements (thank you, Oprah!).
This surge of interest in personal health care is largely driven by the Baby Boomers, who want to keep their youth and vigor, and generally believe that enough money spent on the right products can make this happen. Unrelenting higher health care costs and the latest recession woes are also causing everyone to take a much more active role in their own preventative healthcare.
Also, expanded media coverage of health issues encourages consumers to maintain their health. For example, when the recent Japanese tsunami caused radioactivity levels to soar, nutraceutical companies ramped up their production of potassium iodine, a supplement to help ward off radioactivity exposure. One US nutraceutical manufacturer increased their production of the supplement by over 800% and was making weekly shipments to Asia and Europe. Sales of other supplements for the immune system such as echinacea, prebiotic and probiotic foods, glucosamine, and many others will continue to increase.
All of this has created a health movement that seemingly will continue for many years. The passing of the Dietary Supplemental Health and Education Act (DSHEA) in 1994 freed the nutraceutical manufacturers from the stringent FDA guidelines that the pharmaceutical industry had to follow. This has fostered the growth of new supplements that are now so pervasive in our society. Did you notice Jim Furyk’s hat and shirt in the US Open, prominently displaying the 5 Hour Energy logo?
All these new products and claims have also caused the pendulum to swing back towards more government scrutiny. The Good Manufacturing Practices (GMP) has tried to insure better manufacturing conditions exists in the nutraceutical manufacturers.
The Patient Protection and Affordable Care Act (PPACA), signed into law in 2010 by President Obama may also have dramatic upside effects on the industry when it starts in 2013. The law has provisions for certain dietary supplements and preventative care. The industry is waiting to see how it will all sort out and what effects it will have on their revenues.
If you have a nutraceutical company and are thinking about selling, I have a long list of prospective buyers eager to talk to you. Also, if you have a Shake Weight you are no longer using, please send it to me – I’m trying to get my arms as toned as Michelle Obama’s!