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U.S. Dietary Supplement Industry and Its Operating Model

Abstract: This article briefly introduces the US dietary supplement industry from the development status and product types. And it summarized the characteristics of the industry's operating mode.

1 Dietary supplement industry and its development status

The United States is the world’s largest dietary supplement market, with more than 50,000 dietary supplement products sold in the United States market. In 1994, the United States promulgated the “The Dietary Supplement Health and Education Act of 1994, DSHEA”, which clarified that dietary supplement is a nutritional supplement between food and medicine, and cannot replace food or medicine.

Dietary supplements are processed products, mainly in the form of oral liquids, capsules, tablets, etc., which can supplement the human diet through oral administration. Dietary supplements can be derived from food sources alone or synthetic nutrients.

U.S. dietary supplement products mainly include the following types:

① Vitamins. Vitamins are a class of organic compounds necessary to maintain good health and play an important role in material metabolism. When an organic compound cannot be synthesized by organisms in large quantities but must be obtained from the diet, it is called a synthetic vitamin. In order to maintain physical function, humans need to obtain 13 vitamins from food, including vitamins A, C, D, E, K, B1, B2, B3, B5, B6, B7, B9, and B12. Vitamins are the most important product type in American dietary supplements.

②Mineral nutrients. Minerals are exogenous chemical elements that are indispensable to life. Four minerals such as carbon, hydrogen, oxygen, and nitrogen are essential to life. For humans, they need to obtain mineral nutrients from food and beverages, including potassium, chlorine, sodium, calcium, phosphorus, magnesium, iron, zinc, manganese, copper, iodine, chromium, molybdenum, selenium, and cobalt.

③Protein and amino acid. Instant drinks or granules containing protein are marketed as supplementary products to help people recover from diseases and injuries, and can also be used to prevent skeletal muscle loss in the elderly.

④Fatty acids. Fish oil is a commonly used fatty acid supplement and a source of omega-3 fatty acids. Vegetable oils, especially seed and nut oils are rich in linolenic acid (ALA). The sources of EPA and DHA dietary supplements in food mainly include fish oil, krill oil, and seaweed extract.

⑤ Plant extracts. Mainly herbal and plant products such as algae, fungi, and lichens made from plant extracts such as ginkgo, turmeric, cranberry, garlic, and ginseng.

⑥ Probiotics. In the human body, there are as many as 1,000 kinds of microorganisms. Oral probiotics can affect the coliform flora, reduce gastrointestinal discomfort, improve the health of the immune system, reduce constipation, or avoid colds, thereby bringing health benefits.

⑦Bodybuilding supplements. Mainly for people who participate in fitness, weightlifting, martial arts, and track and field sports to strengthen muscles, increase weight, improve athletic ability, and reduce body fat. Such products mainly include high protein drinks, branched-chain amino acids, glutamine, arginine, creatine, and some weight loss products.

As the world’s largest dietary supplement market, the US dietary supplement market exceeded US$34 billion in 2015, a year-on-year increase of more than 7%, and the number of consumers reached 200 million. In the United States, there are approximately 900 companies engaged in the production and sale of dietary supplements. In terms of product categories, the vitamin market has the largest scale, with sales in 2015 reaching US$10.05 billion. The second is sports nutrition, with sales of 6.7 billion U.S. dollars. Plant extracts such as Chinese herbal medicine also have a good market performance. In recent years, American doctors have become more and more active in learning and using dietary supplements, which has further promoted the development of the industry. From the perspective of sales channels, the sales of dietary supplements in the United States mainly rely on specialty stores such as health care product chains and small stores, as well as supermarkets, large wholesale markets, and chain pharmacies.

2 Operating characteristics of the dietary supplement industry

2.1 Independent supervision system

In the United States, the regulatory work of dietary supplements is carried out by the Food and Drug Administration (FDA). Before the promulgation of the Dietary Supplement Health and Education Act in 1994, the US Food and Drug Administration regulated dietary supplements by ordinary foods. The safety of each ingredient of dietary supplements needs to be evaluated to ensure The product is safe and the logo is authentic.

In 1994, the U.S. Congress passed the Dietary Supplement Health and Education Act, which defined dietary supplements in legal form, and introduced provisions specifically for dietary supplements and dietary supplement food ingredients, requiring that dietary supplement products Carry out special label management. Affected by this bill, the US Food and Drug Administration can no longer supervise dietary supplements by “food additives” or “drugs.” The effectiveness and safety of dietary supplements are guaranteed by the manufacturers themselves, and important changes have taken place in the supervision of dietary supplements. According to this bill, the U.S. Food and Drug Administration adopts a filing system for dietary supplements, which allows products to declare their impact on human physiology in the form of filing, complying with the general labeling instructions prescribed by the U.S. Food and Drug Administration, and without marking The product has the function of preventing or curing diseases and can be sold on the market.

Compared with other countries’ approval systems for dietary supplements, the filing system implemented in the United States provides dietary supplement manufacturers with greater freedom and promotes the vigorous development of the industry. However, the regulatory system for dietary supplements has also been questioned in recent years. According to the current regulatory regulations, as long as the company does not make false publicity and the dietary supplements sold do not cause immediate harm to the consumers, they can be sold on the market. . To some extent, this has also led to the weakening of the US Food and Drug Administration’s supervision of dietary supplements. Only products may be recalled when safety problems occur. Passive supervision has led to certain safety risks for dietary supplements.

2.2 Attach importance to product development

The US dietary supplement industry has a long history of development. In the 1930s, some American companies had begun to produce dietary supplement products such as vitamins, minerals, and protein. In the 1970s, as people paid more attention to dietary supplements, more and more American companies paid attention to this business opportunity and entered this industry. Companies such as Nature’s Bounty (Nature’s Bounty, the predecessor of NBTY), Nature’s Plus, and Herbalife (HLF) were established during this period.

By the 1980s, more than 800 companies were producing dietary supplements in the United States. Companies such as GNC, NUSKIN, NBTY, and USANA all have a long history of development, rich in product categories, and have a high influence in the world market. Take the US NBTY company as an example. The company owns many internationally renowned brands such as Nature’s Bounty, Vitamin World, Puritan’s Pride, Holland & Barrett. The company produces more than 3,000 types of products, and sales channels cover more than 90 countries and regions in the world.

The leading companies of these dietary supplements in the United States have strong product innovation capabilities. They have established R&D centers in the United States and major countries in the world, and they also focus on cooperation with universities and other scientific research institutions. These companies have very strong R&D capabilities and fast product updates, which can track consumer needs and respond well. At the same time, in the design and development of product forms, it has been transformed into chewable tablets, powders, and oral liquids that are easy for consumers to use, to better meet consumers’ demand for dietary supplements.

2.3 High level of consumer awareness

American citizens have a high level of awareness of the effects of dietary supplements and attach great importance to their effects on maintaining health and improving physical functions. Since the daily diet cannot provide all the vitamins, minerals, proteins, probiotics, and other substances necessary for the human body, oral dietary supplements are a convenient way to make up for food nutritional deficiencies. American consumers have an in-depth understanding and awareness of dietary supplements, and the market acceptance level is relatively high.

The life sciences in the United States are developed, and people have a deep understanding of the use of nutrient supplements and scientifically adjusted diets to regulate body functions for disease prevention and disease resistance, and their knowledge of dietary supplements tends to be rational. At the same time, American managed care attaches great importance to disease prevention, and doctors attach great importance to the important role of dietary supplements in people’s health, and actively recommend them. Under the joint action of consumers and doctors, the US dietary supplement industry has maintained steady growth, even in the context of the international financial crisis, it has also maintained a relatively high growth rate.

In the United States, the purchase of dietary supplements cannot be reimbursed through medical insurance. Therefore, consumers pay more attention to the actual efficacy of the product during the purchase process. Cardiovascular and cerebrovascular prevention products made from grape seeds such as ginkgo Biloba, resveratrol, green tea, and garlic, anti-aging and immune enhancement products extracted from ginseng, ginger, echinacea, and black cohosh, and elders Dietary supplements such as women’s health foods made from tree nuts, aloe vera, and soy isoflavones have ranked relatively high in sales in the United States in recent years. However, the once-popular deep-sea fish oil, melatonin, red clover preparations, and other products are no longer sought after by consumers, and consumers are more inclined to single-component plant-based dietary supplements with actual health benefits.

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