Health Supplement Industry Analysis Paper

Health supplement stores, like many other businesses had a sharp decline in 2008 when the recession hit. Since then, this industry has made tremendous strides. For example, in 2008, the revenue growth declined 7.2%. In 2009 it had a 7.5% revenue growth. You can visually see this on the graph to the left (McKenna, 2015).

Currently, the revenue for Food (Health) Supplement Stores is $21.5 Billion with a profit of $1.2 Billion. In just a few short years, the revenue for this industry has gone from $16,143.8 revenue in millions in 2008 to $21,052.1 revenue in millions in 2014. The industry revenue is expected to grow 2.3% in 2015 to $21,534.6 revenue in millions (McKenna, 2015).

In the next five years, to 2020, the Food (Heath) Supplement Stores

The rising age population of 50+ years is a major driving force among the socio-cultural forces. This rising population is the reason that this industry is going to continue to grow in the next five years. They are seeking products to maintain their health and to help keep them young.

Another factor that affects the socio-cultural forces is society’s constant changing of preferences. The healthy eating index and growth of the Food (Health) Supplement Stores industry rise together. They compliment each other, eating healthy and this industry, therefore showing a potential opportunity in this industry (McKenna, 2015).

Political Factors

The biggest political factor that would be a driving force would be The Patient Protection and Affordable Care Act of 2010. In the act, it has different sections that prohibit discrimination against anyone who is licensed or certified under state law. This would include alternative medicine practitioners. Because of this inclusion, it could potentially be beneficial for the supplement

Companies such as NOW, Burt’s Bees, and Lehi Valley are some of the Food (Health) Supplement distributors. Food (Health) Supplement stores do well to have a wider variety of distributors, though can carry a primary distributor if there is a need and a want of it in the particular community the business is located. These stores also work with local distributors, such as Hanna’s Honey of Salem, Oregon.

Financial Characteristics

In order for a Food (Health) Supplement store to do well, the markup needs to be around 40%-50% (Linda Perkins, 2015). There are some stores that have tried to have competitive prices at just a 20%-30% markup and have found it is inefficient in order for the business to survive. There are no sales commission in this industry, no credit card offers, and no return on sales that have been opened. There are some companies that have a 100% satisfaction guarantee on their products or the customers get their money back, however, this is not always the case. Inventory is constantly rotating in this industry.

Anticipated Changes and Trends in