I don’t know about you, but social media seems awash with ads for quick, easy and “scientifically backed” nutrition hacks to transform our lives: “improve your sleep with magnesium butter”; “try our coffee alternative without the terrible side effects”; or “add to your routine our all encompassing dietary supplement - it’s sure to make you leap out of bed in the morning, excel at work and nourish your mental health!”
Some are calling it the 'nutrition revolution’, others the ‘supplement boom’, but, one thing is for certain, start-ups are emerging all over the place, attracting venture capital, and tapping into society’s obsession with leading ever healthier, simpler, lives.
However, the overarching question remains: is this growth sustainable, and what does the future of nutrition look like? Research suggests nutrition is becoming increasingly personalised with consumers willing to pay more for customised, tailored dietary products and services as opposed to generalised solutions.
Written by: Marcus McGrigor
The Supplement Boom – What’s Driving It?
Promotional videos for new food alternatives and food services can be found on every social media platform, advocating the same message: a promise of huge nutritional benefit at great convenience for a price. This reminds me of a quote from Jordan Belfort in the Wolf of Wall Street: “something just came across my desk, John… it has huge upside potential and very little downside risk”.
I am not saying all dietary supplements and food services are a scam, nor am I labeling them a fraud like Di Caprio’s character, I am merely highlighting the power of a key strategy of modern day supplement start-ups… Marketing.
Marketing has always been a useful tool, but with the emergence of algorithmic content on social media, it is fast becoming the sharpest tool in the shed, especially for early stage start-ups looking to improve Monthly Recurring Revenues (MRR). Thanks to eye-catching, ever-available and targeted videos, marketing has become ‘the’ major driving force behind the supplement boom, and one consumers, investors and founders should be wary of.
The global market for vitamins and dietary supplements grew at a rate of 6.3% (CAGR 2014-2018), mainly driven by the food supplement segment, reaching a total of $91.2Bn. In 2023, the market was estimated to be $177.5Bn, with a projected CAGR of 9.1% between 2024 and 2030.
Source: PwC Analysis, 2019
Source: Grand View Research
The ‘brain-health’ supplement segment alone reached $1.4Bn in 2024, with projections to grow $1.9Bn by 2026. Similarly, the mood and mental health category is expanding at a compound annual growth rate (CAGR) of 3.7%, expected to reach $1.5 Bn in sales by 2027. Protein supplements continue to dominate the market, achieving 14% year-on-year growth, fueled by rising consumer demand for functional and energy-boosting products.
Niche segments are also thriving. The magnesium supplement market, valued at $1.6 Bn in 2024, is projected to nearly double to $3 Bn by 2032, growing at a robust CAGR of 6.3%, according to Data Horizzon Research. High-protein claims, energy-enhancing properties, and calcium-rich options have propelled the market to new heights, with consumers spending close to $1Bn annually on high-protein foods alone.
This growth reflects a broader consumer shift, with nearly half of Americans affirming that food is as important as medicine. Growth is driven by consumers becoming more proactive with their health, specifically their diets, due in part to heightened awareness post-pandemic. Consumers are wanting to take control of their diet to improve their lives, be it health (longevity), productivity at work, parenting, or performance in sport.
Companies like Heights, a startup focusing on what it describes as ‘braincare’, providing “ultra high quality, sustainable plant-based supplements that feed your brain”, have received plenty of funding in 2024. Only recently (Oct 24), Heights raised $2M from a crowdfunding initiative led by Seedrs. The fact they sought the backing of consumers directly, as well as that of institutional investor Forward Partners, showcases their aim to build trust with customers as a primarily D2C business. The idea that ‘we are in it to win it together’, is a powerful one.
Investors are attracted to such businesses because they boast scalability potential through subscription models and have relatively low barriers to entry - the consumer segment often does. People want to improve themselves and are willing to spend money on something they believe will have a desired effect.
Beyond the Hype – Challenges in the Supplement Sector
So, what’s not to like?
The market is in danger of becoming saturated, where the sheer volume of competitors in the sector starts to drown out even the best businesses. There is also the possibility that fierce regulation changes raise barriers to entry for dietary supplements to hit the market. By this I mean: supplements are currently regulated more like food products, not drugs. Yet, the way they are marketed and the health effects they promote mirrors that of prescription medicine.
The problem with this is both ethical and scientific. Drugs must undergo rigorous testing and approval processes to ensure their safety and efficacy, whereas food and nutritional supplements are subject to far less stringent regulations focused primarily on safety and labeling rather than demonstrable effectiveness. If this were to change, supplement businesses would face significantly higher costs and longer timelines to bring products to market, potentially stifling innovation.
This is a concern for VC’s as it would likely impact the scalability and profitability of supplement companies, diminishing the attractiveness of the sector as an investment opportunity and potentially leading to lower returns, and weaker fund performance. It also raises the bar for founders who will have to hit trickier and more costly milestones to attract investment. Of course, this may actually be a good thing overall, as the businesses who persevere will emerge stronger and stand a better chance of success.
There’s also the issue of consumer trust. Skepticism is rising among the general population who are cottoning on to the marketing tactics used by start-ups. Perhaps you are one of a growing number who have tried a product seen on instagram, only to become locked into a monthly subscription without feeling the promised benefits? Rest assured - you are not to blame.
Much has been written about supplement advertising appealing to a “nature fallacy” on social media. It is a theory stating that consumers assume something is inherently ‘good’ because it is ‘natural’. The supplement industry often positions itself as a natural alternative to modern, artificial medicines, appealing to consumers seeking purity and simplicity. Brand names frequently include terms like "nature," while advertisements emphasise "pure" and "natural nutrition" over synthetic options. While lots of things in nature are very good for us, this is not universally true and certainly not the case for many supplements.
Finally, the "action bias"—the belief that doing something is better than doing nothing—drives many to take supplements as a way of asserting control over their health. However, overconsumption of certain vitamins, like vitamin C or D, can cause adverse effects such as nausea, kidney stones, or worse. Additionally, some supplements, like St. John’s Wort, can dangerously interact with prescribed medications, including contraceptives, immunosuppressives and even chemotherapy, altering their effectiveness. Therefore, in the realm of supplements, more is not always better and consumers should be careful with what they think will have an effect, as it can be very different case by case.
The supplement industry is at a delicate stage, then: how can start-ups navigate these challenges and carve out a positive future? The answer may lie in more personalised solutions and genomics.
The Rise of Personalised Nutrition – A Tailored Alternative
This emerging field leverages individual genetic, metabolic, and lifestyle data to tailor dietary recommendations and supplement formulations. It is a spectrum, encompassing anything from semi-customised products for specific groups, such as long-distance runners, to fully customised supplements for a single person with a specific biological make up.
Demand for PN is surging, driven by a heightened awareness of the intricate link between diet and overall health, particularly amidst the rising prevalence of chronic diseases. This is further amplified by remarkable advancements in technology.
Breakthroughs in genomics, metabolomics, data analytics and AI have enabled the development of precise and effective personalised nutrition interventions. Moreover, the seamless integration of PN with digital health platforms, such as wearable devices and mobile applications, facilitates the effortless collection of crucial data, empowers the delivery of personalised recommendations, and fosters enhanced user engagement, pushing the market forward. The global PN market is projected to reach $16.6Bn by 2027.
Driven by increasing health consciousness, skepticism, regulation and the desire for personalised nutrition, consumers are seeking more than just one-size-fits-all approaches to nutrition. Startups have taken up the mantle here, taking on venture capital to fund their efforts. For example, UK-based Zoe has raised $15M to expand operations stateside, where the largest market for PN currently exists. The US has a global market share of 44.6%, followed by Europe (27%).
The value for these businesses lies in their ability to move beyond simply supplying products to hopeful consumers to actually enhancing positive effects with high efficacy rates. They need to flex their experience and expertise to expand into new services, such as providing diagnostics and data-enabled recommendations. Companies that measurably add value to customers will win outright, and personalisation holds the key.
Finding the right Business Model
From an investment perspective, success in the PN market hinges on several factors, regardless of the model used. Whether, you are a personalised eGrocery start-up, customised nutrition platform or tailored ready meal service, the following must be considered:
A robust and interconnected platform is essential, seamlessly integrating personalised nutrition data with food production and delivery systems. This requires a standardised approach to nutrition profiles to enable a complete and efficient value chain.
Secondly, the emotional connection with food must be acknowledged and respected, as the enjoyment of taste and sensory experiences plays a vital role in our relationship with food. To ensure long-term engagement, businesses must develop compelling mechanisms that motivate consumers to actively participate in their personalised nutrition journeys.
Furthermore, building consumer trust is paramount, necessitating transparent and responsible handling of sensitive personal data, including genomics.
Finally, a sustainable business model is crucial, with subscription services or other innovative revenue streams providing a viable foundation for long-term growth and success.
Regardless of what a specific start-up provides, one thing to look out for is if the business is maximising its position. Has it found its profit margin sweet-spot? Research from BCG indicates that throughout the supplement industry, delivery costs and the price people are willing to pay are directly related to a product’s level of customisation. In other words, consumers are willing to pay more for higher levels of personalisation.
Source: Boston Consulting Group - Winning Formula in Personalised Nutrition
The supplement industry is undergoing a significant transformation, moving beyond generic, one-size-fits-all solutions towards a more personalised and data-driven approach. While the allure of quick fixes and the convenience of readily available supplements has fueled explosive growth, the industry faces critical challenges, including market saturation, potential regulatory hurdles, and the need to address consumer skepticism.
However, within these challenges lies a significant opportunity: the rise of personalised nutrition. By leveraging advancements in genomics, metabolomics, and data analytics, companies can develop highly tailored solutions that address individual needs and deliver genuine, measurable outcomes.
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