The market for natural OTC products continues to see double-digit year-over-year sales growth, while the traditional OTC market struggles with only 2%-3% growth each year. Kline defines natural OTCs as drug-free, non-monograph products that may contain natural, plant, or herb-based ingredients. Natural OTCs can be homeopathic products and often make claims of support, prevention, maintenance and/or treatment of minor ailments. What seems to work for natural OTCs is honesty and transparency of ingredients. Millennials are driving demand for natural OTC products that have natural ingredients and help treat minor ailments without harmful ingredients or unwanted side effects. Millennials are also becoming parents and are also demanding natural products for their children.
Brands such as Zarbee’s, Babyganics, Garden of Life, Irwin Naturals, and Olly are growing rapidly, as they are transparent about ingredients and sustainable sourcing. Millennials are also heavy online shoppers, and these natural brands thrive in the ecommerce channel where messages of natural ingredients, transparency, sustainable sourcing, and social responsibility can be communicated and shared with consumers interested in these trends.
There is growing interest in transparency on product labels for foods, beverages, consumer goods, personal care products, and now vitamin supplements. The Clean Label Project is an independent product testing organization that tests pet and baby foods and beverages for the presence of harmful ingredients. Clean labels are found on products that contain no artificial flavors, colors, sweeteners, preservatives, GMOs, antibiotics, or hard-to-pronounce, unrecognizable ingredients. Consumers are scrutinizing labels and ingredient lists, looking for short, easy-to-read, easy-to-recognize lists. They are also attracted to products that claim to be “free of” artificial dyes, preservatives, GMOs, and other synthetic substances.
The need for label transparency or clean labels is being driven by five major trends:
- Millennials are interested in clean labels.
- Consumers with food allergies are demanding clean labels.
- Food recalls are causing consumers to push for increased food safety and transparency in the supply chain.
- Consumers are increasingly seeking healthy food options with clean labels that are non-GMO, sustainable, organic, and local.
- Popular retailers, such as Whole Foods, Sprouts, and Trader Joe’s, were built on the foundation of selling healthy and natural products, and consumers in turn are demanding similar options from traditional retailers.
A full assessment of sales, market trends, natural ingredients, claims, and sales forecasts, plus the results of a large-scale consumer survey on attitudes, perceptions, and usage of natural OTCs, are all part of Kline’s Natural OTCs: Impact of Non-Drug Products on the U.S. OTC Market. Kline’s upcoming OTC Indies: U.S. Analysis of Independent OTC Companies will be published this spring and will provide detailed profiles of some of the fastest-growing indie OTC companies and brands. For more details about these and other market studies on the OTC market, contact us.