The global vitamin and dietary supplements market is expected to exhibit a CAGR of 4.9% from 2020 to 2025 with capsules and tablets being the most consumable dosage form of supplements. Powder is expected to emerge as the fastest-growing dosage form from 2020 to 2025 with a projected CAGR of 6.4% from 2020 to 2025.
North America is currently the highest volume of consumers for vitamins and dietary supplements, occupying ~40% share in the global market. The consumption of vitamins and dietary supplements in the Asian region is poised to grow at the highest rate between 2020 and 2025.
The multivitamins market is highly fragmented with several small-scale players operating at regional levels. The top 5 players barely make up 13% share, and the top 10 players collectively occupy ~21% share in the overall market. The largest player, Amway, occupied only a meager 4% share as of 2020.
The bargaining power of suppliers, therefore, is low and barriers to market entry are also low. Two of the major reasons for this are the wider variety of products available with little to nothing product differentiation and the low capital cost of new entrants.
The major cost component for a manufacturer is the cost of raw materials. Since several small and medium-scale players invest very little in automation, the cost of labor and personnel is quite high. In fact, raw material cost (~50%) and labor costs (~17%) are two of the largest cost heads. The vitamins and dietary supplements market procurement intelligence report provides a detailed analysis of the cost structure of the service along with the prevalent pricing models that prominent suppliers opt for.
In addition to the cost of manufacturing the product, product marketing cost is also high. Since there are several companies offering essentially similar types of products, the suppliers need to maintain a top-of-the-mind recall for their products. As such, significant investment is done in the marketing and branding of the products.
Flat fee pricing is the most prevalent pricing model followed in the industry. Flat fee pricing leaves the minimum scope for price negotiations. One of the major reasons for this pricing scheme is the prevalence of CDMO manufacturing in this market. Apart from the flat fee, value-based pricing is also followed in certain instances.
While North America has the largest consumer base for vitamins and dietary supplements, Asian counties like China, Singapore, and India are still the most cost-effective countries for manufacturing. Most of the manufacturing in these countries is done through contract manufacturers. However, the imports of multivitamins have increased recently and have overtaken the export quantity in China.
Since the number of players in the market is high, the larger players prefer a full-service outsourcing engagement model and prefer to have their products manufactured through contract manufacturers. This omits the requirement for having a global manufacturing presence. Thereare also instances of white label manufacturing in the industry. With the instances of contract manufacturing and white labeling prevalant in the industry, the approved provider model of operating model becomes the common operating model for the largest players.
Presently, there are several products in the market with little to no product differentiation. It is also significantly fragmented. However, this generic nature of the industry is expected to change in the future with more regulations around product and quality and mergers and acquisitions.
b. The global vitamin and dietary supplement market size was estimated at USD 109.5 billion in 2019 and is expected to reach USD 114.9 billion in 2020.
b. The global vitamin and dietary supplement market is expected to grow at a CAGR of 4.9% from 2019 to 2025 and reach USD 146.0 billion by 2025.
b. Increasing focus on a healthy diet and public impression that multivitamins aid in reducing symptoms of COVID has resulted in the growing demand for vitamin and dietary supplements
b. LCC/BCC sourcing analysis indicates China to be one of the best sourcing destinations for vitamin and dietary supplements.
b. Some of the key manufacturers of vitamin and dietary supplements are Amway, ByHealth, GSK, KT&G, Herbalife, etc.
b. The market is neither highly fragmented nor consolidated. The top 5 players make up ~13% of the market. There are several small and medium scale suppliers of vitamin and dietary supplements as well
b. The raw materials account for 50.1% of the overall manufacturing cost of multivitamin supplements.
b. Flat fee pricing is one of the most prevalent pricing strategies followed in the vitamin and dietary supplement industry
Component wise cost break down for better negotiation for the client, highlights the key cost drivers in the market with future price fluctuation for different materials (e.g.: steel, aluminum, etc.) used in the production process
Offering cost transparency for different products / services procured by the client. A typical report involves 2-3 case scenarios helping clients to select the best suited engagement with the supplier
Determining and forecasting salaries for specific skill set labor to make decision on outsourcing vs in-house.
A typical newsletter study by capturing latest information for specific suppliers related to: M&As, technological innovations, expansion, litigations, bankruptcy etc.
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