Current Market and Future Demand for Private Label Products

Written by

Gaurav Sood
Gaurav Sood

Partner - HimPharm

A Comprehensive Analysis of the Private Label Health, Wellness, and Supplements Markets Over the Next 10 Years

Diverse health and wellness products

In the ever-evolving landscape of health, wellness, and supplements, private label brands have emerged as key players, offering unique perspectives and products to consumers. Below we provide deeper information on the current market scenario, shedding light on trends and dynamics, while projecting the future demand for private label health, wellness, and dietary supplements industry over the next decade.

The Current Private Label Market Landscape

Diversity of Offerings

  • Extent: Private label brands in health, wellness, active ingredients and dietary supplements industry have proliferated across diverse product categories, including vitamins, dietary supplements, and wellness products.
  • Trends: Private labels are expanding beyond traditional offerings, embracing organic, sustainable, and ethically sourced ingredients. Customization is a growing trend, with private labels allowing the new age global consumers to tailor products to their specific health needs.
  • Market Dynamics: The increasing consumer inclination towards holistic well-being and personalized health systems and solutions has driven the surge in private label offerings. A private label offering a range of wellness products, will witness an unprecedented surge in popularity.

Success factors of key players in the private label health and wellness space

  • Natural Ingredients: A focus on botanical and herbal ingredients, catering to consumers seeking clean and natural products.
  • E-commerce Dominance: A successful brand’s strong online presence shall contribute to a very large degree in its success, reaching a wide audience globally.
  • Innovative Formulas: Continuous innovation in product formulas with a focus on personalized nutrition will help a private label player in staying ahead of market trends.
  • Collaborations: Partnerships with health influencers and experts will result in an enhancement in the brand’s credibility and reach.

With the rising demand by consumers for natural supplements, wellness and health products most companies in this space are poised for significant growth over the next decade.

Projecting Future Demand for Private Label Products

Projecting Future Demand
  • Trends: The concept of wellness as a lifestyle is gaining traction, driving demand for a holistic range of products. Consumers are seeking preventive health solutions, leading to increased demand for supplements and wellness products in the nutrition market.
  • Market Dynamics: Private labels that align with the evolving definition of wellness, herbal medicine and quality health care are likely to experience sustained demand.
E-commerce Expansion
  • Trends: The preference for online shopping in the health, herbal medicines and wellness sector is on the rise. Private labels investing in seamless e-commerce experiences, including Amazon FBA are expected to capture a significant market share.
  • Market Dynamics: E-commerce-centric private labels will play a crucial role in enhancing user experience and meeting the growing demand for health, wellness, and supplements.
ecommerce online shopping of health products

It is estimated that private label products currently account for over 35% of overall sales across all supplement categories at speciality retail chains and independent health food stores and pharmacies. Based on projected category growth rates, by 2030 it’s forecasted that private brands could capture close to 50% market share in health and supplements.
Several industry drivers are fueling rapid expansion in private label and contract manufacturing services for health products:

Consumer Desire for Customized, Specialty Wellness Products

A 2022 survey found 73% of consumers search for customized wellness regimens to meet their unique health needs, driving demand for specialized formulations that can only be found in smaller independent brands. There is also a desire for local, transparent sourcing wherever possible. These consumer preferences increasingly benefit smaller and emerging brands focused on targeted wellness support, often sold through alternative health channels.

Growth in Ecommerce widens opportunities for new health brands

As online shopping expands rapidly, selling direct-to-consumer (DTC) has become easier than ever – lowering barriers for niche and specialty brands to reach wider audiences outside of traditional retail. Between wider consumer discovery and the highly targeted advertising options of today’s digital landscape, emerging health and supplement brands have used online channels to achieve remarkable growth. It’s expected by 2025 over 50% of specialty supplement sales will occur online.

Rise of lifestyle customization

Today’s consumers seek personalization across all spheres of life, no longer satisfied by one-size-fits all solutions. This applies to their wellness regimens too – instead of defaulting to mass brands, many shoppers actively prefer smaller companies that reflect their lifestyle values and priorities more specifically. A custom private label allows independent retailers to extend their own brand identity into high-quality supplements that resonate with their core customer base.

As demand has grown amongst retailers and DTC brands for customized formulation, label design and production of health supplements, contract manufacturing has risen over 120% from 2015-2020, with no signs of slowing momentum according to market research firm IBIS World. Projecting into the next decade, analysts forecast the contract manufacturing industry to sustain over 10% yearly gains as seller emphasis on private label and specialty branded products reaches new heights across online and bricks-and-mortar retail.

Global Market Size and Future Projections

Global Market Size

In 2022 the global supplements market was estimated at over $155 billion annually, lead by top categories including vitamins, probiotics, proteins, omega fatty acids and a wide range of single ingredient extracts and blends. The United States represents over 35% total global demand currently, trailed by China, Japan Germany and India as other major markets using supplements for preventative wellness and medical support. 

Across international regions, the spread of lifestyle diseases has driven adoption of dietary supplements for health maintenance. By 2030, analysts predict the total global supplements market size swelling to over $275 billion annually as more evidence on the benefits of preventative supplementation comes to light across both developed and developing economies.

For the growing subset of private label and custom contract manufacturing brands, year-over-year expansion rates are expected to exceed 10% globally through 2030 – meaning by the end of the decade over half of all supplement sales volume could come from specialized niche brands, small independents and customized private labels. This presents a major window of opportunity for new market entrants to establish reputable brands and seize share while health-conscious consumers seek out targeted wellness solutions that mass-market products do not satisfy.

Regional Opportunities: Market Sizing and Growth Projections

Americas

Fueled by high spending power on health and rising preventative wellness adoption, the Americas currently lead global demand for supplements and customized formulations

United States

As the #1 market worldwide, the U.S. supplements industry was most recently valued at over $55 billion, with vitamins comprising the largest share at over 30% of sales. Alternative medicines, botanical extracts, specialty minerals and niche compounds represent strong growth areas as consumer prioritize customized regimens. 

The U.S. private label and contract manufacturing market for supplements reached an estimated $22 billion in 2022 – by 2030 it is projected to surpass $40 billion driven by independent retailers’ branding efforts. Yearly growth rates range from 4-7% for core essentials like multivitamins, up to 15% for specialized categories.

Canada

Canada also demonstrates steady demand for supplements to promote wellness and preventative health. Total market value recently exceeded $2.5 billion annually and growth between 7-12% is forecast through 2030. Canada has one of the world’s highest rates of alternative medicine usage, presenting opportunities for independent natural health brands.

Mexico & Central / South America

Supplement consumption continues rising fast in Mexico as health awareness improves among middle class and professional communities. The overall Mexico supplements market recently surpassed $2 billion with projections nearing $5 billion by 2030. There is robust appetite for U.S. and European imported brands trusted for their quality. 

Central and South American countries like Brazil, Argentina, Chile and Peru represent emerging supplement markets, with consumers recognizing the need for preventative health solutions amidst spreading lifestyle diseases. While still developing compared to North American sales, analysts predict strong double-digit growth across LATAM as populations age and education efforts expand.

Europe

Representing over 25% of global demand second only to the U.S., Europe’s dietary supplements market was estimated at $40 billion in 2022. Consumer education on preventative nutrition varies widely from West to East, correlated with differences in market maturity and sales rates:

Western Europe

Countries like Germany, France, Italy, Spain and the UK demonstrate substantial demand and spending for all supplement types – especially botanical concentrates, probiotics and vitamins. Total sales are growing steadily between 4-8% each year. Consumers demonstrate willingness to pay premium prices for clinically backed, specialized brands, sustaining a thriving contract manufacturing ecosystem.

Eastern Europe & Russia

Preventative supplementation is still gaining traction farther East with consumers. However projected growth is robust at over 10% annually through 2030 in countries like Poland which show accelerating adoption of dietary supplements for wellness as access to health education improves. Further east sales remain small but are picking up fast. Russia continues battling high disease rates that supplements may help abate over the long term.  

Asia Pacific

There is sizable demand across developed and developing Asian regions. Efforts by governments and health organizations to promote wellness behaviors including supplementation continue gradually influencing consumers.

Japan, South Korea, Australia

These developed nations demonstrate substantial demand for imported supplements as trust surpasses domestic offerings. Total sales growth is steady between 4-7% yearly as adoption caps out. Australia, New Zealand and Japan shoppers eagerly pay premiums for exclusivity and demonstrable efficacy to remain best-in-class for health longevity. Private label popularity persists thanks to close cultural ties between retailers and local consumer bases.  

Southeast Asia

Broadly speaking the 10 ASEAN countries represent growth opportunity for foreign supplements chasing emerging middle classes with increasing health awareness. Total sales reached nearly $15 billion in 2022. Countries like Singapore, Thailand and Malaysia show the most progress to date with over 10% projected annual growth, while Indonesia and Vietnam remain underdeveloped for now. As focusing on wellness increases sales are set to expand quickly.

India & South Asia

India’s supplements market recently exceeded $4 billion annually thanks to concerted public health efforts and local manufacturing incentives – but per capita consumption still lags far behind global standards, suggesting major room for consumption to multiply as consumers realize potential lifestyle benefits. Yearly increases near 10% are predicted through 2030. Neighboring Pakistan and Bangladesh have nascent industries under $500 million each currently, but represent new frontier markets that will contribute meaningfully to broader regional growth in the coming years. 

Africa & Middle East

These diverse regions have ample road ahead to nurture healthier living behaviors and routine supplementation for wellness and disease prevention. While consumer understanding remains low, pockets of progress support a bullish outlook long-term.

South Africa & Sub-Saharan Africa

South Africa leads the continent in supplements adoption – albeit still low with total sales under $500 million. The well-educated population understands preventative wellness and sales are projected to double by 2030. Neighboring countries have negligible demand presently but may follow South Africa’s trajectory gradually over the next decade.  

Nigeria & West Africa

Nigeria’s 214 million citizens spend over $200 million on supplements today, mainly in large cities where some health awareness exists. There is immense upside though rural penetration remains difficult currently. As Nigeria goes, surrounding countries will follow over time in the region. 

Middle East and North Africa

Lead by wealthy Gulf states like Saudi Arabia, UAE and Qatar, demand concentrates among upper class consumers already attuned to Western emphasis on health. Total regional sales expected to sustain 20%+ growth in the years ahead to surpass $5 billion by 2030. Outside the Gulf health awareness drops markedly, though leafy MENA states like Egypt, Turkey, Lebanon and Israel trend closer to global norms in usage higher income brackets.

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