If, after 2021, there was any question whether this would turn out to be just a fleeting trend, the latest forecast by Euromonitor leaves us in no doubt. Not only is the category still flourishing, its progress accelerated in 2022 and is showing no signs of slowing down.
Evidently, this is much more than a temporary post-pandemic trend. So, how is the category behaving and where are the opportunities?
The pandemic-induced sales increase of stress and sleep supplements has certainly been sustained in the following years. After April 2020, a clear spike recorded in Amazon US online sales was the first indication of the upcoming development of the category.
This was transformed into sustained growth as sales increased by 31% year-on-year (YOY) for stress relief and 55% YOY for sleep support supplements in 2021 (Clear Cut analytics, October 2021).
Today, “stress and sleep” is officially the fastest-growing global food supplement category for the second year in a row.
It grew by 13.4% in 2020 and 14.5% in 2021, and the latest Euromonitor forecast suggest that it will grow by 14.9% in 2022.
Stress/sleep supplements and over-the-counter (OTC) drugs are performing well throughout various global markets. According to pharmacy sell-out data by IQVIA, 25% YOY growth was seen in the stress/sleep OTC and food supplement market in Italy in 2020, 42% YOY growth was recorded in the same segment in Brazil and Germany showed 18.3% YOY growth in 2021.
It’s no wonder, therefore, that numerous market intelligence agencies and brand owners from around the world have identified stress and sleep as the category to look out for.
For example, Ariane S.F. Barros from Eurofarma (Brazil), Matthew Oster from Euromonitor International, Scott Dicker from SPINS (US) and Dmitri Lazerson from Queisser Pharma (Germany) are just a few of the experts who share that opinion.
Discerning customers
Despite the high demand, currently available solutions for stress/sleep-related problems do not seem to satisfy consumers … who are now more than ever focused on mental health. According to Euromonitor, stress and sleeping disorders have been in the top three consumer health concerns in recent past years.
Mental and emotional well-being, getting enough sleep and feeling “good” are all now considered to be important aspects of overall health.
In 2022, STADA published a health report in which 37% of European consumers said their stress levels worsened during the pandemic and 59% said they experienced or felt close to burnout.
Unfortunately, Euromonitor data also suggests that sleeping is the category wherein consumers are least satisfied with their current treatment and are frequently looking for new solutions.
However, this presents a clear market opportunity for new product launches in the segment. As stress and burnout are reaching epidemic levels in Europe, they are also becoming increasingly recognised by health institutions (such as WHO), thereby opening the market to brands based on medical detailing.
Convenience is key
As the global share of new supplement launches with functional stress and sleep claims continues to grow, user-friendly formats are gaining popularity. Although there are still relatively few launches in this category, according to Mintel GNPD, significant growth was seen in the last 5 years — from 2.6% in 2017 to 4.5% in 2021.
And whereas the majority of these launches are still in capsule or tablet forms, we are seeing increased demand for chewables and gummies. New launches in this format grew from 1.6% of all stress and sleep launches in 2017 to 11.2% in 2022. User-friendly delivery forms are, therefore, a viable differentiation strategy for new product development.
Movers and shakers
To fully understand the gaps in the market, however, we need to look at how some of the world’s leading and most innovative brands are responding to the stress and sleep trend with their recent new offerings.
The segment is gradually evolving from a commodity driven one to a more advanced, added-value, clinically supported one. In the past 2 years, active organisations have been launching more premium products. For example, global pharma brands (such as Pierre Fabre, Uriach, Servier and Dietpharm) and innovator companies (Neurohacker, Nature Made, The Vitamin Shoppe) are releasing products with branded and clinically studied ingredients.
With some of these recent additions to the sleep supplement segment, we’re noticing increasingly specific positionings in terms of function and an association with stress. Low-cost herbal or melatonin products still represent the majority of products and gummies prevail in Western markets.
In the stress segment, more and more innovative brands are choosing branded saffron and ashwagandha. Big Pharma is mostly sticking to recognised herbals, magnesium and vitamin B6, with some innovation in delivery forms.
Target groups and applications
So, what are the market opportunities for new supplement launches in the stress and sleep segment? One area that’s ripe for picking is the premium, clinically supported segment, wherein added-value products could do extremely well.
According to a survey by Friesland Campina in 2021, the three most important factors that drive the purchase of stress-support supplements are scientific backing (51% of consumers), ingredient relevancy (49%) and price (47%).
More than 80% of supplement users also stated that they are willing to pay a higher price for a product that has scientific proof of efficacy.
These numbers are supported by product ratings. Mental health supplement brands that are rated among the top five on Amazon US use branded and clinically studied ingredients (such as New Chapter and ashwagandha, Life Extension and ashwagandha/L-theanine, and Pure Essence and Rhodiola).
The third best-selling product on Amazon US in September 2021, goli gummies, also includes branded ashwagandha. By contrast, Gaia Herbs promotes the traceability of its ingredients and quality test results on the meetyourherbs.com platform.
Personalised recommendations and the connection of supplements to technology, such as personal health tracking devices or apps, present another market opportunity. For example, Librestil by EG has an online stress test and Proper offers a sleep-tracking app.
STADA’s 2022 health report found that only 25% of Europeans between the ages of 18 and 34 do not use any health-related apps. Apps are mainly used to support healthy cooking and eating (19%), followed by monitoring sleep quality (17%) and mental well-being (16 %).
And lastly, an opportunity lies in products and brands focusing on children. As estimated by physicians and psychologists, up to 30% of children may have a sleep disorder at some stage of their childhood.
According to Nutritional Business Journal, children’s sleep supplements experienced an impressive YOY sales growth rate of 32.8% in the 52 weeks ending on 10 July 2022. Holland & Barrett, for example, launched sleep gummies for children in 2022.
The concept can also be expanded to products that all family members can use; Pranarôm has recently introduced sleep gummies in this segment.
In conclusion
It now seems evident that stress and sleep supplements are here to stay. As consumers prioritise mental health and emotional well-being, sales continue to grow.
A high level of consumer dissatisfaction with currently available products presents a clear market opportunity for new product launches in this relatively small but fast-growing segment.
In the future, we believe added-value products, supplements connected to technology and those that target children will have the most chance of commercial success.