2022 Dietary supplement and natural product industry outlook: Insights from Nutritional Outlook’s Editorial Advisory Board

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As dietary supplement and natural product companies head into another year of dealing with the pandemic, supply chain disruptions, and more demand than ever (in some product categories), Nutritional Outlook asked its Editorial Advisory Board members to chime in on what they expect to see in terms of trends and challenges for the industry in 2022, as well as their tips for success.

Nutritional Outlook: What major market, industry, and/or consumer trends do you expect to see in 2022?

Daniel Fabricant, PhD
Executive Director & CEO
Natural Products Association (NPA)

Daniel Fabricant, PhD

We expect the demand for immune-supporting products to remain strong as we continue to live with COVID-19. People are more conscious about their health, and with different variations of the COVID variant emerging, people will want an extra layer of support.

David Foreman, RPh
Founder & President
Herbal Pharmacist

David Foreman, RPh

There will be a continued interest from consumers in products in the mental wellness arena. Even the World Health Organization has acknowledged that mental health will be a huge challenge now because of the impact COVID-19 has had on society. Two specific areas within mental wellness should be hot for years to come: stress/mood support and sleep. Since stress and sleep are directly connected to causing issues for the other, there should be consumer interest in formulations which address both and that come without side effects. Cognition is the third area of the mental wellness category, and it is directly impacted by stress and poor sleep. Any company that positions itself as a leader in mental wellness should grow quickly.

Additionally, I see the botanical marketplace growing significantly as there are many companies completing clinical studies in most areas of health. As consumers become savvier and look for “proof” that products work, clinical substantiation should help lead the way.

Kimberly Kawa, BSc
Wellness Product Specialist
The Movitz Group

Kimberly Kawa, BSc

My expectations for functional ingredient trends in energy, performance, and hydration, as well as cognition, mood, and sleep, are based on 2021 health focus growth rates across condition-specific dietary supplements, performance nutrition, and protein supplements/meal replacements categories.

In energy and performance segments, guarana continues to gain shelf space, featured as a natural caffeine source. Reishi and cordyceps are emerging “super mushrooms” in preworkout, recovery, and electrolyte supplements, with growth potential. Animal-based proteins remain growth drivers due to their amino acid and digestibility standpoint, but consumer interest in animal alternatives will drive innovation in plant-based protein formulations. In this category especially, multifunctionality is sought after. Continued sales growth and distribution gains in plant-based protein powders that feature the addition of both herbal adaptogens and medicinal mushrooms is anticipated.

For boosting cognition, lion’s mane is the leading medicinal mushroom. Shoppers seeking calm-focus support might try adaptogens ashwagandha and rhodiola, as well as nootropic amino acids like L-theanine and DMAE. In the mood support supplement set, adaptogen ingredients grew +137.9%* in 2021, with no indication of slowing down. In sleep aids, melatonin continues to be a growth-driver functional ingredient. Also expect nervine relaxants, such as chamomile and lemon balm, to win with consumers looking for sleep support.

* Source: SPINS data – Natural Enhanced Channel + Multi-Outlet (powered by IRI) – 52 weeks ending November 28, 2021

Douglas “Duffy” MacKay, ND
Senior VP, Dietary Supplements
Consumer Healthcare Products Association (CHPA)

Douglas “Duffy” MacKay, ND

Dietary supplements are becoming a part of mainstream self-care and healthcare systems. Dietary supplements—like over-the-counter (OTC) medicines and consumer medical devices such as toothbrushes—are products consumers use every day to maintain health and feel better. The COVID-19 pandemic has accelerated self-care in general and led to the largest spike in supplement sales in two decades. As consumers become more educated about supplements as a credible self-care option, we anticipate the continued growth of the dietary supplements industry.

COVID-19 drove significant growth in the immunity category, but consumers also explored ways to use supplements to address stress or sleep issues. We anticipate supplements marketed for stress, sleep, and overall health and wellness will continue to grow, especially as scientific evidence continues to raise the credibility of the category.

Michael McGuffin
President
American Herbal Products Association (AHPA)

Michael McGuffin

My expectation is that strong consumer acceptance of dietary ingredients and natural products will continue in 2022. In addition, the industry should expect an increased focus on sustainability and transparency from the demands consumers will place on us. Consumers will continue to seek out brands and products that claim to be sustainable, and companies that claim to care about diversity, equity, and inclusion (DEI), and will want assurances that such claims are legitimate. Any company promoting their sustainability and DEI efforts should be prepared to survive a social audit of those values.

Irfan Qureshi, ND
VP, Product Development & Quality Assurance
Healthy Directions

Irfan Qureshi, ND

As the coronavirus pandemic still stays top of mind for at least the first quarter of 2022, we will continue to see a demand for immune health products, though the consumer may shift from products or ingredients that are designed to acutely support immune health (i.e., fending off current immune challenges) to products that provide immune support year round. With this shift, consumers will also become savvier in terms of recognizing other health factors that contribute to a healthy immune system, such as stress, sleep, energy, and other areas. They will continue to look for products that support these areas of health along with immune function.

While companies will make an effort to transition workers back to the office in early- to mid-2022, it is hard to imagine that we will see a return to a five-day work week, meaning people will continue to work from home or work in a hybrid role. This will keep the focus on achieving an optimal work-life balance, which will mean consumers will continue to focus on health and wellness and will gravitate towards supplements that support these trends. At the same time, they will look for products that are supportive of this new way of working. This could mean that cognitive health, cardiovascular health, joint health, and eye health (vision, macular function, as well as a reduction in eye fatigue and dryness from looking at screens all day long) could all be trending categories.

While probiotics will continue to be a large category, brands and researchers will have to evolve the science behind probiotics to develop more targeted solutions for microbiome support, taking into account health status, gender, and other demographic data. In addition, prebiotics (a continually emerging trend) that are targeted to support specific healthy actors in the microbiome should begin trending upwards, since it will become clear that generalized probiotics are not able to support the needs of the entire microbiome in ways that prebiotics may. Research into targeted prebiotic solutions should begin coming to the forefront, and the idea of prebiotic specificity will begin taking hold.

Harry B. Rice, PhD
VP, Regulatory & Scientific Affairs
Global Organization for EPA and DHA Omega-3s (GOED)

Harry B. Rice, PhD

GOED members have reported very strong demand for eicosapentaenoic acid (EPA)- and docosahexaenoic acid (DHA)-rich oils during 2021, but the challenges in the supply chain have attenuated innovation—so, provided supply chains return to pre-pandemic status, innovation should pick up in the near future.

Paula Simpson, BSc, RNCP, R.Herbalist
Author / Nutricosmetics Innovation & Formulation Expert / Founder
Nutribloom Consulting

Paula Simpson, BSc, RNCP, R.Herbalist

Cited as a top 2022 trend by Ulta Beauty, holistic beauty that encompasses aesthetic wellness/nutrition, along with topical interventions and self-care, will be top consumer priorities for 2022. We’re far beyond the days of “hope in a jar” as the sole way to rejuvenate the health of our skin or overall aesthetic.

Partly due to the pandemic, hair wellness through supplementation has and will continue to be a consumer demand, [in part because] a side effect [of] the virus [is] hair loss, but also due to [the impact of] environmental and product toxicities/pollutants, aging, and hormonal balance.

Longevity research, now more accessible through AI technologies and at-home testing, merged with personalized nutrition, will continue to grow in 2022. Healthy aging is the new anti-aging.

The rise in microbiome for health and skincare will continue. Expect to see more focus on targeted postbiotics in skincare due to their enhanced stability in formulations over “living bacteria,” the probiotics that are more likely denatured by compounding ingredients and preservatives in formulations. Focus on the “whole microbiome” versus gut and skin health only will become more integrated into supplement regimens as emerging clinical data and products that focus on the oral microbiome and its influence on systemic health advance.

Biotech meets environmental and sustainable demands: Sustainable, clean supplements and packaging will become more sophisticated as biotech companies leverage science and technologies to bring forth clinically validated and efficacious, naturally derived ingredients and packaging without a heavy eco-footprint. Algae is one industry taking on many environmental challenges in this way.

Lu Ann Williams
Global Insights Director
Innova Market Insights

Lu Ann Williams

In our Top Ten Trends, we see that the bigger picture of health is a recurring consumer theme. We think the microbiome has the potential to be a game changer and is the focus of our trend “Gut Glory.”We see growing consumer interest in the link between the gut and other health areas like immunity, sleep, energy, and mood. Health is also increasingly intertwined with lifestyles. Our “My Food, My Brand” trend highlights that consumers are looking for solutions that align with their values and personal needs. Personalized nutrition is important here, and the supplement industry has an opportunity to help consumers target very specific needs.

Brian Wommack
Senior Vice President, Communications
Council for Responsible Nutrition

Brian Wommack

I expect consumers will continue to focus on supplements as a key component of their self-care. During the pandemic, usage of dietary supplements—and trust in them—has increased, according to the CRN Annual Survey. The behaviors learned during pandemic are likely to persist into the future.

Nutritional Outlook: What will be the biggest challenges for dietary supplement and natural product companies in 2022?

Lisa C. Buono
Principal, Client Insights
IRI Worldwide

Lisa C. Buono

One of the biggest challenges will be to keep new users of supplements motivated and engaged once the pandemic weakens. The industry must communicate convincing reasons to make taking supplements that help support immunity, help promote better sleep, and help optimize mental health the norm versus a response to the pandemic.

Daniel Fabricant:

When we speak to our [NPA] members, we repeatedly hear that we need better and more consistent regulation from FDA. Marketplace uncertainty is one of the biggest challenges for businesses, and we don’t expect that to change until the FDA takes steps to address this issue.

Specifically, this uncertainty is driven by the FDA’s inaction on cannabidiol (CBD), failure to stop adulterated products from entering the marketplace, a decrease in domestic and foreign inspections, and confusion over the regulatory status of N-acetyl-L-cysteine (NAC). This is further exacerbated by proposals from state legislatures that would restrict access to nutritional supplements and create a patchwork of state laws that businesses would have to navigate.

Making matters worse, the FDA is asking for more authority regarding mandatory product listings. Before the FDA is granted more authority (especially in an area that is not needed), the natural products industry needs the agency to start enforcing the laws on the books.

David Foreman:

The biggest challenges for 2022 may be in supply chain and meeting the consumer’s desire for innovative products. While many blame COVID-19 as the total cause for supply issues, this has been a growing issue for multiple reasons. With supply issues, we then encounter adulterated ingredients, or worse. Supply issues will drive those with greedy intent to buy or sell adulterated ingredients and hurt the credibility of the industry. There will be a greater demand for testing due to this challenge.

As if our lifestyles weren’t already busy enough, the dramatic shift to work at home, school at home, and now some sort of hybridization of work and school will drive consumers to seek products that fit into their lifestyles. I see stick packs, beverages, shots, etc., as a way to integrate new products with scientifically proven ingredients into consumers’ homes.

Douglas “Duffy” MacKay:

The industry is facing three major challenges for 2022: the rising cost of doing business, rapidly evolving key opinion leaders, and the unknown length of the pandemic.

Companies in the dietary supplement and natural products industry are facing increasing costs of doing business due to the continuing supply chain and labor challenges across the globe. Everything, from common ingredients to packaging materials and manufacturing equipment, is delayed, leading to additional costs and issues for the industry. The supply chain and labor issues are unpredictable, which makes business planning for 2022 and beyond a guessing game.

We are now in an era of evolving key opinion leaders on health where no formal nutrition or medical training is needed to be viewed as an expert by the public. Consumers are not just turning to their healthcare providers for information about supplements; they’re looking at celebrities, politicians, social media influencers, and people not associated with healthcare to learn about new products that may offer the benefits they’re searching for. This underscores the importance of developing credible resources and scientific studies to educate the public about products and benefits so consumers are well informed when making purchasing decisions.

And, of course, as new COVID-19 variants continue to disrupt daily life, it will remain difficult for companies to plan for 2022. We don’t know how much travel, trade shows, supplier qualifications, audits, and meetings will return to normal and in person. It is difficult to anticipate just what issues will arise for business leaders because of the pandemic. We also don’t know how the pandemic will impact consumer purchasing and what ingredients and products may continue to grow in popularity as consumers seek out new self-care strategies.

Michael McGuffin:

Supply chain issues will continue to be a big challenge for dietary supplement and natural product companies in 2022. Consumer demand for products with botanical ingredients for health and wellness support during the pandemic has left some companies challenged to find suppliers, which has the potential to drive up the price of raw materials. Responsible manufacturers must maintain their high level of vigilance to protect from misidentification and intentional adulteration of botanicals.

Irfan Qureshi:

Some of the bigger challenges that have been identified in the past will continue to be challenges going forward. These include distinguishing brands based on quality practices to continue to address consumer and media attention around bad players in the market. At the same time, navigating rule changes from big e-commerce players like Amazon and others will also continue to be something brands need to stay on top of. Furthermore, staffing changes at the FDA and shifting priorities could present new challenges as well as opportunities for the industry.

The role of state regulatory bodies and attorneys general will continue to be something to stay abreast of. As federal agencies continue to struggle with enforcement resources, these bodies will attempt to fill the gap in areas they perceive are not receiving adequate enforcement attention.

Beyond this, the continued move towards online and e-commerce sales will favor growth of those brands that are adept at selling this way. While brick-and-mortar retail will still be a big piece of the overall pie, brands will need to have a robust online presence and develop a brand story that sets them apart from the competition to thrive in the online world.

The trend for acquisitions and mergers in the industry is likely not slowing down. As mergers take place, this transition presents a challenge to individual brand identities. Successful brands will be those that can navigate how to sustain their individual brand identities and reason for being while at the same time being a part of a larger overall organization, taking advantage of the synergies that size brings.

Harry B. Rice:

While not specific to the omega-3 industry, supply chain and logistics challenges are likely to continue to wreak havoc at least through the first half of 2022. Such challenges result in increased costs, which may ultimately get passed along to consumers.

Specific to the omega-3 industry is a rule from the U.S. National Marine Fisheries Service (NMFS) and the National Oceanic and Atmospheric Administration (NOAA) implementing a provision of the Marine Mammal Protection Act (MMPA) that “prohibit[s] the import of fish or fish products [including fish oil] from commercial fishing operations that result in the incidental mortality or serious injury of marine mammals in excess of United States standards.” Specifically, this rule established conditions for evaluating a harvesting nation’s regulatory programs to address the mortality or serious injury of marine mammals in any fishery that wishes to export to the United States. After January 1, 2023, a fishery’s fish or fish products can be imported into the U.S. only if it has been authorized to do so based on information submitted to the U.S. by the country’s competent authority. The deadline for receipt of information by the U.S. was November 30, 2021, and it’s been a challenge to determine if countries have submitted the necessary information.

Paula Simpson:

Supply chain issues may be the most challenging for 2022.

Brian Tanzer, MS
Senior Manager, Scientific & Regulatory Affairs
The Vitamin Shoppe Inc.

Brian Tanzer, MS

A big concern of mine is social media. Social media is a double-edge sword. It’s a great platform for education and marketing but has quickly become a breeding ground for misinformation provided by many who lack the education, training, and experience. It is a constant battle to debunk common myths and dispel misinformation that negatively impacts our industry. At The Vitamin Shoppe, we pride ourselves on providing a solid foundation of education and training for our employees, whom we call Health Enthusiasts. We want our Health Enthusiasts to be equipped with the knowledge they need to provide our customers with the information they need to make an educated purchasing decision for them and their families. As industry stakeholders, we must be relentless in our quest to provide unbiased, science-based information to our customers and the public at large. Let us all be the voice the industry needs to help ensure that our reputation is one where people know they can depend on us for their health and wellness needs.

Lu Ann Williams:

From an operational point of view, supply chain and price increases will be the biggest challenges. Consumers remain interested and engaged with their health, and clean-label continues to be important—but being able to meet that demand will be challenging for many companies.

Brian Wommack:

Two big ones remain—supply chain problems and labor shortages. There aren’t easy or quick answers to either challenge.

Nutritional Outlook: In 2022, what will be the key to success for those in the dietary supplement and natural product industries?

Daniel Fabricant:

The most important thing anyone can do for the industry is to be a part of the policymaking process, and if you’re not already, get involved with NPA. Our members have seen firsthand what a real return on investment looks like for their involvement in NPA. Some highlights from 2021 include:

• Filing a lawsuit against the FDA for its retroactive application of the Dietary Supplement Health and Education Act (DSHEA) against NAC
• Defeating legislation in California, Massachusetts, and New York restricting access to supplements
• Expanding our support in the House and Senate for tax-free contributions to health savings accounts to purchase natural products
• Joining the SHOP SAFE Coalition, which advocates for establishing a set of provisions incentivizing e-commerce platforms to address the sale of counterfeits and protect unsuspecting consumers from unsafe products sold through these channels
• Joining the Healthy Workplaces Coalition, which advocates for providing payroll tax credits for expenses associated with COVID-19
• Advocating for the FDA to set a safe level of daily consumption for CBD
• Filing a lawsuit against the Occupational Safety and Health Administration (OSHA) requiring employers with 100+ employees to mandate their employees meet specific vaccination requirements
• Submitting comments to regulatory agencies advocating for important issues, including: intellectual property protection, and export and import alerts
• Another record-setting year for political engagement for NPA PAC, with over 254 contributions to NPA PAC

This year, the key to success will be staying on offense and continuing to lead on issues like these at the federal and state levels, and ensuring policymakers remain informed about the policies that impact the businesses that support the health of millions of Americans.

David Foreman:

They key to success for those in the dietary supplement and natural products industry will be those who check all the boxes:

• Innovative delivery methods for consumption
• Using clinically substantiated ingredients (at therapeutic doses)
• Having a “feel good” cause attached to their company (i.e., eco-friendly, supporting a cause, etc.)
• Experiential: Consumers want to be able to feel the effects of products

Douglas “Duffy” MacKay:

Growing consumer confidence remains a key to success for the industry. As an industry, we must advance the science and focus on product safety, integrity, and sustainability. We also need to strengthen and standardize quality assurance programs, abide by and encourage all companies to follow current Good Manufacturing Practices at a minimum, and prioritize consumer safety to build trust in the category and products. And for those that choose to ignore the law, we need strong FDA, FTC, and DOJ enforcement as a deterrent.

And of course, companies will need to navigate the global supply chain and labor issues to find success in this unpredictable market. Strong supplier, lab, and packaging relationships and good communication with all business partners is going to be key to keeping product in stock. This is a turbulent time in the global market, and successful companies will need to communicate and manage any product delays or other issues that may impact consumers.

Michael McGuffin:

Especially considering ongoing supply chain issues, the key to success for those in the dietary supplement and natural products industry is maintaining strong, committed relationships with their suppliers. With strong relationships to source, manufacturers will be able to secure the raw materials they need, at a price they can afford, to produce their products. Treating the farmer who supplies your ingredients as a partner in your success is the key to success. In addition, companies need to listen—really listen—to their customers and be able to back up their positions on social and environmental issues with evidence of commitment through corporate action.

Irfan Qureshi:

The key to success for brands in the natural products industry in 2022 will be the ability to innovate, stand apart, and continue to maintain their brand identity and principles while navigating pandemic-related supply chain challenges that are likely to remain prevalent throughout the year. Another key will be retaining their thought leaders and high performers in a time of workforce transition. Since many individuals are rethinking what their priorities are in terms of work, and career transitions are bound to continue into 2022, companies that can keep their employees content, satisfied, and engaged are the ones likely to thrive in the future.

Harry B. Rice:

As always, consumer trust is going to drive success. Two ways to build trust with consumers is to increase vigilance and enforcement.

Paula Simpson:

Being able to adapt and be flexible to the fast-paced and changing demands of the consumer on all levels—innovation, formulation, marketing, and communications. This is being driven by information accessibility and, to some degree, overload—high-tech and AI companies leveraging personalized plans. Being open to incorporating a wider breadth of health or wellness experts as ambassadors can add value to reaching the consumer over traditional research and marketing tactics as holistic health and beauty continue to appeal and merge within the market. People are seeking information that is informative yet approachable and practical for them.

Lu Ann Williams:

Companies that are able to provide products that deliver on quality, as well as offer meaningful benefits for consumers, will be the winners. Ingredients drive innovation in today’s market, and every day I hear about supply chain challenges and increasing prices.

Brian Wommack:

Continuing to deliver innovative products in response to increased demand for self-care products sparked by the pandemic in a challenging environment where there is supply chain disruption and significant regulatory uncertainty.