(Note: This story is an adaptation of the executive summary of the "Sports Nutrition and Weight Loss Report 2014," which was compiled and published this month by Nutrition Business Journal, a sister publication of Club Industry.)
With its promise of tangible, near-immediate results, the sports nutrition and weight loss categories of the overall nutrition industry continue to capture consumers' interest and a growing chunk of their wallets.
While the overall nutrition industry, which includes sports nutrition and weight loss (SNWL), grew in 2013 by 9.1 percent in both volume growth and sales, SNWL (weight-loss meal replacement supplements, sports nutrition supplements, sports and energy drinks, nutrition bars and gels, and weight-loss pill-form supplements) grew by 6.6 percent.
Just the sports nutrition category within SNWL, which includes powdered and ready-to-drink, grew by 13 percent in 2013, a healthy jump from an already strong 11.7 percent the previous year. The largest portion of the sales in that market comes from sports and energy drinks and shots, which make up 56 percent of sales ($17.1 billion). The second largest category is sports nutrition supplements at 15 percent ($4.5 billion), followed closely by nutrition bars and gels at 12 percent ($3.6 billion) and weight-loss meal replacement supplements at 11 percent ($3.3 billion). Weight-loss pill-form supplements came in last at 6 percent ($2 billion).
The bright spot in SNWL continues to be protein, which remains the unblemished macronutrient with essentially zero criticism in the media or from online communities. Interest in plant-based proteins, including rising stars such as pea protein and brown rice protein, appears to be driving growth in new consumer segments as the category moves further into the mainstream.
The sourest note in the sports nutrition weight loss news is energy shots. Five-Hour Energy continues to dominate the category, and it continues to fall—three years in a row. SK was among the few companies to garner sales increases. The overall sports energy beverage market grew, likely entirely on the strength of Red Bull and Monster, but at a disappointing 3.5 percent. The chasm-sized dip in sales for weight-loss meal supplements was obviously more startling, but the energy beverage market may represent a longer-term obstacle. Consistent negative media around energy shots, including safety questions and criticism in the U.S. Senate charging companies with marketing to children, may have a lasting effect that could stunt what was a strong trend.
The ViSalus Sciences implosion, in which the nutrition product and dietary supplement multi-level marketing company went from a meteoric rise to a drastic fall, rocked the weight-loss meal supplement market. The lasting effect and the long-term trend cannot be based on one company's troubles, even though the effect on the market was huge and responsible at least in part for a slowdown in growth from15.2 percent to 6.8 percent. However, it may be more a matter of bad business practices than bad news for the category. As a multi-level marketing operation, ViSalus could have simply hit the peak in the bell curve and skidded down the other side. New weight-loss meal supplements are doubtlessly vying to be the next big thing and could return the category to previous growth numbers.
For 2013, weight-loss pills showed surprising strength, growing at 11.6 percent, up from 10.4 percent the year before. Continually buffeted by bad press and widespread skepticism, the category found traction with new products buoyed by the Dr. Oz effect. Ingredients such as raspberry ketones, green coffee bean extract and cambogia garcinia were a hit with consumers, despite little proof of efficacy. Proof of results for raspberry ketones were less than scant, but demand growth percentages hit well into the triple digits.
Across all the niche markets and broader categories, sports nutrition and weight loss still represents an attractive area for investment because businesses can grow so fast and the barrier to entry can be low. Consumers buying products expecting those immediate results often bring immediate results for the manufacturers and finished product companies. But the waters remain turbulent and are not expected to calm. It requires nimble navigation to stay afloat there.
The longer-term strategy may be a focus on science and the mainstream. Particularly in sports nutrition, years of scandal and skepticism have kept the mainstream wary with a ubiquitous "it either doesn't work or it's dangerous" reaction. Building on the strength of protein, smart companies may still be able to find an edge with ingredients that are proven safe and effective beyond the Dr. Oz endorsement. The key could be in avoiding the over-promise-under-deliver effect. Wild claims work on late-night TV, but they may not work in the mainstream.
Steady, long-term growth may turn out to be modest in that model, but it would be lasting. To get there, the claims need to be modest, too.
(To purchase the full report, which features analysis of markets, trends, competition and strategy in the U.S. sports nutrition and weight loss market, click here.)