The 8 Trends Driving the Supplements Market
Here’s the trends XRC, a venture capital firm, says will continue fueling the vitamins, minerals and supplement space
Chances are good that if you stroll through the wellness aisle at your local retailer, there’s a plethora of new vitamins, minerals and supplements (VMS) on the shelves catering to various needs and demographics. From products geared towards female consumers to those looking to lure young buyers with splashy graphics and bright colors, it’s what industry analysts say is an “active space” for both early-stage investors and strategic acquirers.
But what wellness themes are driving the charge? And what attributes are investors eyeing for in VMS products? A new report from XRC Ventures has the answers.
The venture capital firm conducted a deep dive into the VMS space, which has blossomed as Americans become increasingly health-conscious and content to spend their hard-earned dollars on supplements that promise enhanced performance and recovery. There’s an undeniable energy within the VMS arena, fueled partly by social media-influencers-turned-entrepreneurs who have captured Gen Z’s attention (and wallets) as they launch products to a ready-made audience.
Case in point: Bloom Nutrition, a greens and superfoods supplement brand founded by fitness and wellness influencer Mari Llewellyn, who rose to social media fame with her weight loss journey. After launching Bloom, which quickly went viral on TikTok, major retailers like Target took note, adding the brand to their shelves and online stores. Earlier this year, health and wellness company Nutrabolt (maker of C4 Energy) acquired a 20% stake in Bloom as part of a larger $90 million financing.
While the road from influencer to fitness and wellness entrepreneur seems like a sure bet, analysts are particularly bullish on specific health themes. As investors look for clinical studies and a strong brand, here are the leading categories from XRC’s Q2 Seed-to-Series A benchmark VMS report:
The Ozempic Effect
Ozempic and other weight loss drugs, which have quickly disrupted the diet industry, have not only helped consumers slim down and gain control of their health but have contributed to the broader destigmatization of weight loss, according to XRC.
One contributing factor is the name recognition that weight loss medications have brought forth (such as Oprah and other celebrities and influencers). With continued destigmatization, XRC projects that there will be a demand for non-prescription alternatives as well as the need for supplements to address nutrient gaps stemming from weight loss drug use – such as brands like AG1. Supergut, on the other hand, is focused on naturally boosting GLP-1, resulting in a lighter appetite.
Mushroom Boom
The homeopathic wellness scene has quickly expanded from the aisles of independently owned specialty alternative health stores to Walmart, with nootropics, adaptogens and mushrooms becoming commonplace.
The wellness boom has introduced the average consumer to a whole new world of products promising sharpened focus, better sleep and stress optimization — and they are on board. Spacegoods is one of the many mushroom brands that have emerged, known for its colorful packaging and catchy product names like “Rainbow Dust.” More recently, Travis Barker’s wellness brand, Barker Wellness, added mushroom gummies to its product line up as it expands into Sprouts grocery stores nationwide.
As XRC points out, interest in mushrooms and adaptogens has grown substantially, and mushroom-based supplements are expected to grow 6x between 2018 and 2027. Notably, XRC says that supplement sales for cognitive health scored the highest sales-growth rates in 2023 — and have staying power.
Femtech Revolution
Until recently, women (who drive over 70-80% of the purchase decisions) have long been neglected in terms of having alternatives to birth control and supportive products related to fertility, menstruation and menopause.
But the surge in women-related startups in the femtech space leads XRC to anticipate that there could be massive growth, citing Spins marketing insights director Scott Dicker, who said he’d be shocked if there isn’t double-digit growth for women’s health products in 2024.
Longevity
Taking steps to support longevity means more than peptide treatments; 45% of American consumers are taking supplements to slow aging. While Gen Z may get all of the attention for their health and wellness quest, XRC points out that it’s the Boomers who are especially interested in finding ways to live longer and thrive.
It’s also becoming easier than ever to custom-create supplement regimens with technology. London-based Bioniq uses AI and bloodmarker data to recommend ultra-personalized supplements to consumers – an approach that has won over investors. The startup recently secured $15 million in an oversubscribed Series B round.
Pill Alternatives
Gummies have become the most popular supplement form, but new alternatives — such as mints, patches and oral strips — are also emerging for their ease of use, lowered sugar content and faster absorption.
The Good Patch and the Patch Brand are two of the brands looking to make their mark as convenient ways to get daily doses of vitamins or even a caffeine boost.
Mood and Mental Health
Stress and mental health remain two of the top concerns for American consumers, leading to a market ripe for remedies that combat anxiety. Even beverages that are typically centered on performance are integrating stress-relief ingredients such as ashwagandha. Momentous, a human performance and nutrition company, debuted Elite Recovery this year as a post-workout drink that includes creatine but also ashwagandha to lower cortisol levels.
Apothékary, a plant-powered and woman-owned business that landed a $500,000 investment from Solidcore founder Anne Mahlum, also offers a line of stress relief products in the form of wine-free tonics.
Performance Nutrition and Hydration
While functional nutrition and hydration certainly aren’t new products, XRC sees a “spate of startups” in the space that target female consumers or offered as low-sugar products. Despite its growth potential, it may be a challenge for companies to carve out a niche.
“While we continue to monitor this rapidly growing category—up 27% in 2023—we believe it’s a competitive space where it’s difficult to find compelling differentiation to truly stand out from the pack,” XRC’s report states.
One of the latest hydration brands to hit the market is Cadence, a zero-calorie drink that bills itself as the first ready-to-drink mineral salt-based hydration beverage that secured over $100 million in funding.
Beauty from the Inside
Lastly, XRC sees a crossover between beauty and wellness, which led to a 210% year-over-year increase in supplement sales in 2021. While this category hit a snag in 2023 with a 7% decline as consumers became interested in gut health and digestion, supplements are being widely used for improved hair, skin and nails, according to the venture capital firm.
In the meantime, brands like Solluna Glowing Greens are making it easy for consumers to get their vegetables — and their glow.
