Following a trend for many of the top-selling herbs in the mainstream market, sales of ginseng are down 26.54% to $56,277,876 in food stores, drug stores and mass market retail outlets (FDM).¹ These data reflect the 52-week period ending April 29, 2001. The sales figures on ginseng indicate that some of the largest selling brands declined while some recently-introduced products increased (partly due to the increased distribution for a recent entry in its second or third year). The drop in ginseng sales for this 52-week period represents a slight increase of about 12.5% in the rate of decline in ginseng sales; the overall drop for the 52-week period ending almost six months earlier, on November 12, 2000, was about 24%. The decline in ginseng is about twice the estimated decline of 12% in total herb sales for the same 52-week period² and 15% for the 52-week period ending January 7, 2001.³ These statistics represent only the FDM channel of distribution and do not include sales generated through high-volume warehouse buying clubs, convenience stores, the natural foods market, multi-level market companies, health professionals, mail order, or the internet. Although the FDM sales data label the category generically as "ginseng," without specifying the type of ginseng, a review of the products supports the notion that all or at least most of these products are made from Asian ginseng (Panax ginseng C.A. Mey., Araliaceae), although it is possible that some other types may also be included. The data were compiled by Information Resources Inc. (IRI).

Sales in the natural foods channel for ginseng supplements are also declining. According to SPINS, a San Francisco-based market research firm that tracks sales trends in the natural foods markets, total sales for the entire ginseng category for 12 months ending November 2000 in natural foods supermarkets (smaller stores are not included) reflected a reduction of 16.5% from the previous year.⁴ For all classes of trade, total consumer sales of all types of ginseng is about $170 million, according to surveys conducted by Nutrition Business Journal (NBJ),⁵ a leading publication tracking business statistics in the natural products field. NBJ compiles data from IRI, businesses and direct sellers in the MLM (multi-level marketing), mail order and practitioner channels to come up with overall sales figures. Interestingly, a new report from NBJ published in its May/June issue concludes that sales for all herbal supplements (single category and combinations) in all classes of trade rose by 1% over 1999, reflecting increased sales in high-discount warehouse buying clubs and modest increases in higher-volume natural food, MLM and other channels.⁵ Several recent reports have suggested that many consumers have switched from their traditional buying patterns for herbal dietary supplements to more price-competitive sources.

In the FDM channel, the combined sales for private label brands (those made by a third party for a particular retailer, who sells ginseng under its own brand) rank third, after market leader Ginsana® (with $11,162,956 sales in total dollars) and Sundown® Herbals (selling $10,185,172). The sales decline for Ginsana for the period was 41.7% in total dollar sales (38.8% in unit sales) compared to Sundown’s 17.9% drop in dollar sales (18.3% unit sales). Sundown sold more units (1,771,106) than Ginsana (1,011,289), a difference of 759,817 units. This disparity is a result of the significant price differential between the two lines (avg. $11.30 for Ginsana and $5.74 for Sundown). The probable interpretation is a larger drop in sales for the higher priced Ginsana product, despite the company’s promotional advertising and clinical studies and the increased tendency in the market for consumers to view herbal products as generic, despite formulation differences, backup of claims by clinical studies, etc.

Table 1 shows the top 15 ginseng products in FDM. Several recently-introduced line extensions show positive growth, a result of their not having previous market history, specifically Centrum® Focused Formula Ginseng and Veromax® Ginseng. Three companies have two products each in the listing: Sundown (Herbals®, and Herbals Xtra), Centrum (Focused Formula, and Herbals), and Pharmavite (Nature’s Resource® and Nature Made®); and one company has three: Pharmaton Natural Health Care Products (Ginsana, Ginsana Sport, and Ginkgoba® ME). Curiously, a combination product, Ginkoba® ME, has emerged as number 15 in the ginseng category. Introduced recently by Pharmaton Natural Health Care Products, this product combines Ginkoba®, a market leading standardized ginkgo (Ginkgo biloba L., Ginkgoaceae) extract, with Ginsana® ginseng extract. The introduction of a line extension by a company with a product already generating high sales has a tendency to cut into the sales of the previous product as well as (at least in the hopes of the company) sales of competing brands. Thus, the introduction of Centrum Focused Formula has moved to 5th place, replacing some of the sales formerly generated by Centrum Herbals, down in 10th place, reflecting an almost 59% decline from the previous year.

References:

1. Bender K. (Information Resources Inc.). Personal communication. May 17, 2001.

2. Bender K. (Information Resources Inc.). Personal communication, Dec. 6, 2000.

3. Blumenthal M. Herb sales down 15% in mainstream market. HerbalGram 2001;51:69.

4. Odum L. (SPINS). Personal communication, Jan 26, 2001.

5. Ferrier G. NBJ’s sixth annual overview of the nutrition industry, Nutrition Business Journal 2001;5/6:1-7.