Let the good times last: Can the botanicals market maintain momentum through 2021 and beyond?

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While most everyone on the planet breathed a sigh of relief when they flipped the calendar page from December of last year to January of the current one, those in the botanicals industry had at least some reason to feel positive about 2020.

And who can blame them? “The 2020 botanicals market was a landmark year thanks to increased supplement use during the pandemic,” recalls Francesca de Rensis, marketing director, Indena S.p.A. (Milan, Italy).

She cites Nutrition Business Journal (NBJ) data indicating that while vitamins and dietary supplements overall grew at a healthy 14.5% rate, “combination herbs and botanicals” not only surpassed that mile marker but nearly doubled it, growing at an even more impressive 24.7% for the year.

In retrospect, the reasons why are clear. As de Rensis says, “The market dynamics shifted to where consumers were proactively managing their health, and botanical supplements became a part of their everyday health routines.”

But will they stay there? If the industry has any say in the matter, they sure will. In fact, botanical brands are already doing everything they can to keep momentum rolling on the demand side, and product at the ready on the supply.

From Strength to Strength

De Rensis is hardly alone in classifying last year as a banner one for botanicals. “The market had a terrific time in 2020 thanks in large part to the pandemic,” agrees Scott Dicker, marketing data analyst, SPINS LLC (Chicago).

But COVID-19 doesn’t deserve all the credit for boosting botanicals’ prospects. As Sabrina DeBlasio, director, communication and branding, OmniActive Health Technologies Inc. (Morristown, NJ), notes, the sector was already situated for strength.

“The herbs and botanicals space is one of the strongest in the supplement industry,” she claims, “with around 20% market share,” per NBJ’s Supplement Business Report 2020. “The category has been on a growth path over the last few years, driven by consumer awareness of the products’ benefits and an increased focus on proactive self-care—which the pandemic only strengthened.”

Even better, botanicals’ “natural, plant-based origins and their established history of use” endear them to contemporary consumers further, especially in an era when “plant-forward” is rising on Innova Market Insights’ 2021 top-10 trends list, DeBlasio adds.

On the Watch List

As for which botanical benefits consumers are clamoring for, that brings us back to the pandemic, with shoppers guided by their desires to shore up their defenses against outside invasion and inner angst alike.

Thus, “We saw immune-health ingredients soar as consumers looked to boost their immune system,” Dicker observes. And given the stresses that 2020 leveled upon consumers’ shoulders, he continues, “Botanical ingredients that touted relaxation benefits also really exploded.”

Those impressions check out with DeBlasio, who’s seen projections for strong botanical growth “across all fast-growing health-benefit categories.” That translates into increased attention on formulas that address immunity, sleep support, and brain health, she says, as well as mood and mental wellness.

“NBJ estimates that sales in this category grew 30% in 2020,” she notes, “and will continue to rise through at least 2023, led by ingredients like hemp cannabidiol (CBD), homeopathics, and St. John’s wort, in addition to 5-HTP and magnesium. Consumers increasingly understand the interplay among mood, mental health, stress, sleep, immunity, and wellness, and that will continue to drive strong growth.”

Ingredients of Interest

Another winning ingredient is elderberry, which saw growth of nearly 184% in 2020 “on top of 2019’s already-stunning 69% growth driven by immune-support claims,” DeBlasio says, citing data from NBJ’s Supplement Business Report 2020.

“The availability of multiple easy-to-consume formulation types may have contributed to mainstream elderberry sales growth in 2019,” she surmises. “In recent years, consumers increasingly appear to be seeking non-pill supplements such as gummies, liquids, and tinctures, and elderberry, with its familiar sweet fruit flavor, is particularly well suited to these formulation types.”

Herbs like Echinacea and ivy leaf (Hedera helix, Araliaceae) have also seen growing success in recent years, she says. In 2019, for instance, both saw sales jumps of 5% and 14%, respectively, in the U.S. mainstream channel relative to 2018, according to data from the American Botanical Council’s HerbalGram market report¹, thanks largely to marketing around immune and respiratory benefits.

“And Ayurvedic herbs have been on a strong trajectory for years,” DeBlasio continues, “with strong projections coming in for 2020.” Turmeric and its curcuminoid bioactives provided something of a gateway through which mainstream consumers could explore Ayurveda’s potential; now, other Ayurvedic botanicals are surfing its coattails, including ashwagandha.

Dicker says that as concerns around immunity and relaxation ease, consumers are beginning to refocus their interest on ingredients that promote performance, both in mind and body. “Consumer demand, along with growing research, has helped grow botanicals’ use as nootropics and energy products,” he points out. Functional mushrooms offer a case in point, with lion’s mane seeing “excellent growth” on the nootropic end and cordyceps “gaining popularity in the performance space,” he says.

Upsides and Downsides

Botanicals’ 2020 performance set a tough act to follow, Dicker concedes, and he wagers that 2021 “almost certainly won’t be able to repeat that success. But the introduction of new consumers and the at-home consistency has kept botanicals top of mind, especially for immune health.”

And that prospect has both upsides and downsides. “The increase in awareness of botanicals has certainly generated immense demand,” notes Ajay Patel, founder and CEO, Verdure Sciences (Noblesville, IN), “but that poses some challenges to keeping up.”

For example, as conscientious consumers dig into the details around botanicals’ origins, composition, sustainability, and supporting science, industry will have to pony up the evidence. “That’s why we see brands formulate with products based on clinically validated and safety-backed science,” Patel says, “which will certainly increase consumer buy-in.”

Moreover, “Botanical supply chains are very complex and, in many cases, multi-tiered,” he continues. COVID-19 only underscored that, increasing demand as lockdowns, logistical bottlenecks, and longer lead times—on top of increasingly extreme and unpredictable weather—hampered access, lifted costs, and rendered the entire sector a prime candidate for supply-chain mitigation.

Doing Their Part

“Being headquartered in Italy,” de Rensis notes, “where COVID was a problem early, we planned and adapted quickly to maintain our supply chain. We communicated with our botanical growers and suppliers as soon as possible to limit any disruptions. And even though the past 18 months have been challenging, our great long-term supply relationships helped us witness very few problems. Many were related simply to securing timely materials transportation.”

Such efforts, Patel believes, will pay off in the future—particularly as concerns about environmental sustainability and transparency take on more weight. “The botanical supply chain will continue to evolve,” he says, “and the need for traceable, sustainable, and equitable sourcing will become the norm.”

Verdure began investing in traceability early, establishing a manufacturing facility and partnerships with botanical-growing communities in India. “To continue growing resources along with demand over the years, we’ve expanded that footprint to include multiple sourcing locations, and we’ve built further long-term partnerships with growers and harvesters,” he adds.

One key aim involves ensuring biodiversity by exploring new production techniques and promoting regenerative-agricultural practices like superior seed selection, the use of soil-booster mixes, intercropping, and crop rotation. “Further, we’ve worked diligently to continue growing our supply chain in a number of ways, including planting 2,000 Boswellia serrata tree saplings and finding eco-friendly ways to supply bioactives,” he says.

While the industry’s supply chain is in better shape than it was during the depths of the pandemic, “there’s still a long way to go before things can get back to some sort of pre-pandemic normalcy,” Patel admits. Nevertheless, he continues, “We see limitless possibilities. The increased demand over the past year and a half has rejuvenated a very resilient category, and we see it headed in the right direction. As consumers gravitate toward transparent, clean-label products across all categories, botanicals continue to meet their needs. It’s a good place to be.”

Reference

1. Smith T et al. “US sales of herbal supplements increase by 8.6% in 2019.” HerbalGram, issue 127 (2020). (Editor's note: HerbalGram recently released its 2020 U.S. herbal supplements market report.)