Partnership Capital Growth, in collaboration with SPINS and Nutrition Business Journal / NewHope360, is pleased to present our second quarter 2013 newsletter, which focuses on the U.S. Vitamin, Mineral, Herb, & Supplement (VMHS) industry. Key highlights include:
• The VMHS industry continues to exhibit robust growth as an aging and increasingly ill – yet also increasingly health-conscious – American population focuses on health, wellness, and the benefits of preventive/proactive care. The industry grew 7.5% to an estimated $32.4 billion in 2012 and has not had a single year of decline in the last decade.
• Retail sales data supports these trends and shows strong growth across channels and product categories. We remain impressed by the significant growth rates across major channels and product categories given their already-massive scale, and we are equally excited by new products, ingredients, and channels that have surfaced over the last couple years.
• Industry consolidation continues, with a broader range of buyers showing interest in the space than ever before. Numerous landmark acquisitions by major pharmaceutical, CPG and food companies are changing the landscape of the industry, presenting both benefits and new challenges to industry players.
• In the public markets, our PCG supplement index has significantly outperformed the overall market since Jan. 2011, growing ~55% vs. the overall market which has grown ~30% in the same period, driven by the positive performance of the vast majority of the underlying VMHS companies.
• Overall, PCG’s outlook on the VMHS sector remains very positive with industry challenges – NDI stalemate, rising commodity costs, product adulteration – more than offset by opportunities – personalization, rise of integrative medicine, innovation, etc.