Supplements are Big Business — The Bottom Line, Not Health Benefits, Matters Most

Nutritional supplementation has become a booming industry within the last two decades.  Individuals are frequently attracted by claims of product superiority and promises of health improvement into purchasing one of the numerous nutritional supplements on the market today.  While the claims of nutritional supplement companies are supposed to be regulated by the FDA (FDA.gov, 2016), the bottom line cost of these various supplements continues to grow out of proportion with cost of living increases.

Many supplements that have been proven both safe and effective, such as Vitamin D and fish oil (Omega-3 fatty acids) cost a mere $3 to $4 a month, however, numerous nutritional supplements currently sell for more than $100 a month.  The high cost of these supplements may be due to their manufacturing process, ingredients, or availability, however, the industry’s rapid growth paints a far darker picture of targeted marketing practices that are spending copious amounts of money to sell a marginal product (Temple, 2010).

In 1994, the FDA began formatting the rules and regulations for the assertions made by nutritional supplement companies.  These rules included very sensible approaches that would require the verification of claims that were stated by nutritional supplementation companies in both product packaging and advertising, however, many individuals have discovered over time that advertising labels often benefit from a certain poetic licensing in their statements (Levitt, 2001).

Due to this marginally misleading information, nutritional supplement companies have been under repeated examination.  In 2015, this resulted in 117 leading nutritional supplement companies, including industry leader GNC, and individuals being charged by Justice Department for civil and criminal infractions (Lattman & O’Conner, 2015).  A mere year prior to this charge, GNC launched a nutritional supplement advertising campaign that cost them more than $30 million dollars for a 6 month period, and was designed to appeal to a wider audience and attract a new customer base (Coyne, 2014).  This amount was only a small portion of the advertising expenses that this single company undertakes.

GNC franchise owners are expected to contribute 3% of gross sales to advertising.  The average gross sale amount reported by GNC per location is more than $500,000 which would create a marketing revenue of around $15,000 per store (Unhappy Franchisee, 2016).  While this seems like a small amount, GNC has over 6,500 locations which results in a minimum of $97,500,000 in discretionary advertising funds (Bloomberg, 2017).

This amount is an approximation of what is spent on advertising by only one of the nutritional supplement corporations in the United States.   There are hundreds of nutritional supplement specialty companies currently operating in the United States, and for each GNC newspaper insert, television spot, or Facebook ad you encounter in your daily browsing, you may well see tens or hundreds by Beachbody, Nature’s Way, Puritan’s Pride, MHP, Cytosport, or any of the hundreds not mentioned directly in this article.

In 1994, nutritional supplements were not the common household item that they are currently, and yet the laws that would guide advertising practices for nutritional supplement companies were established then, and continue to lag behind the targeted advertising we have today.  The advertising expenses of decades ago, spent primarily by companies like Pfizer –Centrum Multivitamins and Bayer–Flintstone Children’s Multivitamins were a part of the brand.  An individual bought Bayer Flintstone multivitamins because they patronized many Bayer products, and they bought Centrum multivitamins because Pfizer sold many good reliable products.

Today, however, when you see that newly advertised specialty weight-loss, muscle-building, life-changing nutritional supplement, it would be a wise choice to remember that newer is not always better…No matter how much they might spend on advertising.

References:

Bloomberg. (2017). Company Overview of GNC. Retrieved from http://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=9277653

Coyne, J. (2014). GNC Launches First Large-Scale National Ad Campaign in a Decade. Retrieved from http://www.bizjournals.com/pittsburgh/news/2014/04/28/gnc-launches-first-large-scale-national-ad.html

FDA Food & Drug Administration. (2008). Guidance for Industry: Substantiation for Dietary Supplement Claims Made Under Section 403(r) (6) of the Federal Food, Drug, and Cosmetic Act. Retrieved from http://www.fda.gov/food/guidanceregulation/guidancedocumentsregulatoryinformation/dietarysupplements/ucm073200.htm

Lattman, P & O’Connor, A. (2015). Makers of Nutritional Supplements Charged in Federal Sweep. New York Times. Retrieved from https://well.blogs.nytimes.com/2015/11/17/federal-officials-target-dietary-supplement-makers/?_r=0

Levitt, J. (2001). FDA’s Progress With Dietary Supplements. Retrieved from http://www.fda.gov/NewsEvents/Testimony/ucm115229.htm

Norman J. Temple. The Journal of Alternative and Complementary Medicine. July 2010, 16(7): 803-806. doi:10.1089/acm.2009.0176.

Unhappy Franchisee. (2016). GNC Franchise Store Sales Slipping, Competition Increasing. Retrieved from http://www.unhappyfranchisee.com/gnc-franchise-sales/