• Historical Overview
• Resurgence of Interest in Herbals
• FDA Proposes Strict Herbal Supplement-Claims Guidelines
• The Dietary Supplement Health and Education Act
• The April 1998 FDA Proposal
• The Industry Reacts
• Product Breakouts
• Classification by Standards and Origin

• 1998 Sales Reach $2.6 Billion
• Table 1-1: The U.S. Market for Herbal Supplements: Retail Sales, 1993-2002 (dollars)
• Sales by Retail Outlet Type
• Top-Sellers in Health and Natural Product Stores
• Top-Selling Herbal Supplements in the Mass Market
• Positive Factors Affecting Market Growth
• Negative Factors Affecting Market Growth

• Hundreds of Companies in Field
• Leading Herbal Supplement Marketers
• Sleeping Giants Awaken
• New Players and Acquisitions
• Store Brands Becoming More Important
• Variant Marketing Methods
• Steady Rate of New Product Introductions
• Table 1-2: The U.S. Herbal Supplement Market: Number of New Product Introductions, 1995-May 1999
• New Products Increasingly Specialized
• Medical Claims Joined by Pharmaceutical-Style Packaging
• Standardization vs. Whole Herbal Products

• Two Distinct Distribution Sectors
• Distributor Margins for the Two Sectors
• Health and Natural Product Stores Essential for Herbal Supplement Market
• Customer Service in Health and Natural Product Stores
• Larger Retail Margins in Health and Natural Product Stores
• Strategic Category Management
• Mass Merchandisers Compete on Price, Selection, and Advertising
• Herbal Supplements Important to Drugstores
• Health and Natural Product Stores Threatened by Mass Market

• Percentage of U.S. Adults Using Herbal and Garlic Products Is Growing
• Demographics of Herbal Supplement and Garlic Users
• New Users Are Younger
• Top-Selling Herbal Supplements
• Consumers Take Herbal Supplements for Health and Well Being
• Information about Herbs May Help Retention

• Market Parameters
• Report Methodology

• Herbal Supplements Used for Nutritional or Medicinal Purposes
• Vitamins and Minerals Excluded
• Nutraceutical and Functional Foods Not Covered
• Culinary Herbs Excluded
• Homeopathic and Aromatherapy Products Not Covered

• Ancient Roots of Herbalism
• Early European Influences
• The Rise and Fall of American Herbalism
• Oriental and Ayurvedic Influences
• Native American Origins
• A Growing Industry Sparks Government Crackdown
• The Proxmire Amendment Curbs FDA, Opens Market
• NLEA Gives FDA New Rules and Power
• FDA Proposes Strict Herbal Supplement-Claims Guidelines
• FDA Takes Firm Stand, Particularly Against Herbal Supplements
• Pro-Supplement Bill Introduced
• Passage of DSHEA Is Victory for Industry
• FDA Attacks DSHEA After Ephedra Incident

• Plant-Based Products
• Table 2-1: Herbal Ingredients and Their Primary Benefits (104 herbs)

• The Two Main Categories: Single-Ingredient Products and Formulas
• Standardized and Non-Standardized
• Classification by Origin
• Europe Has Strong Influence on the United States
• Chinese Herbal Products Now in the Mainstream
• Ayurveda Based on Ancient Indian Texts
• Native American Herbs Based on Native Plants
• Tropical Herbs Support Rainforest Preservation
• Classification by Function
• Delivery Systems Include Tablets, Capsules, and Liquids
• Health and Natural Products vs. Mass Market

• Herbs Regulated by the Federal Food and Drug Administration
• Drug Approval Process Costly
• NLEA Health Claims Limited
• Supplement Industry Wins Ruling
• DSHEA Supplement Protections
• DSHEA Structure/Function Claims Allowed
• Disease Claims Prohibited by DSHEA
• The April 1998 FDA Proposal
• The Industry Reacts

• American Botanical Council
• American College of Nutrition
• American Herbal Products Association
• Citizens For Health
• Consumer Healthcare Products Association
• Council for Responsible Nutrition
• Herb Research Foundation
• National Nutritional Foods Association

• Sales Difficult to Quantify
• 1998 Sales Reach $2.6 Billion
• Herbal Supplements Go Mainstream
• Table 3-1: U.S. Retail Sales of Herbal Market, 1994-1998 (dollars)

• Health and Natural Product Stores Losing Stronghold
• Mass Merchandisers Overtake Drugstores in Mass Market
• Herbs Number-One Category in Drugstores
• Table 3-2: Share of U.S. Herbal Supplement Sales by Retail Outlet Type, 1994-1998 (percent): 9 Outlet Types
• Top-Selling Herbal Supplements
• Table 3-3: Top-Selling Single Herbs in U.S. Health and Natural Product Stores, 1997-1998 (percent): 11 Herbs, Other
• Single Herbs Account for Half of Sales
• Mass-Market Single-Herb Winners
• Greater Variety Through Health and Natural Product Stores
• Table 3-4: U.S. Top-Selling Single Herbs in Mass-Market Stores, 1998 (percent): 10 Herbs, Other
• Fast-Growing Herbal in Health and Natural Product Stores
• Table 3-5: Fastest-Growing Herbal Categories in Natural Products Channel (percent): 5 Categories
• West Leads Market for Herbal Supplement Use
• Table 3-6: Regionality of Use of Herbal Supplements, 1998 (percent and index): West, Northeast, Midwest, South
• Sales Stronger in Winter Months

• Prevention and Trend Toward Self-Care
• Aging Population Will Drive Herbal Supplement Sales
• Living Longer, Living Well
• Women's Health and Aging
• Modern Man's Health Problems
• Herbal Supplements for Age-Associated Conditions
• Positive Experiences with Alternative Therapies
• Confidence and Use of Herbs Increasing
• Popularity of Authentic Chinese Medicine
• Growing Interest in Ayurvedic Medicine
• Expanded Mainstream Distribution Adds to Growth
• A New Playing Field with DSHEA
• FDA Tries to Rein in Herbal Industry
• Private Testing Group Questions Label Claims
• Standardization an Issue
• German E Monographs Spawn Duplication
• Associations Promote Herbal Industry
• NDMA Broadens Focus
• Positive Research Promotes Specific Herbs
• Research Funding Increases
• Negative Studies Countered by Industry
• Medical Establishment Using Herbs
• Medical Schools Teaching Herbs
• New Alternative Medicine Publication
• HMOs and Insurance Companies Endorse Alternative Medicine
• Potential for Growth: The Majority of Americans Still Non-Users
• Herbal Advertising in Mainstream Media
• Mainstream Retailers Increasing Shelf Space
• Increased Competition Leads to Lower Prices
• Lack of Education Still an Obstacle

• Sales to Reach Nearly $6.6 Billion by 2003
• Growth Expected Well into the Future
• Table 3-7: Projected Retail Sales of U.S. Herbal Supplement Market, 1998-2003 (dollars)

• Approximately 500 Companies in the Market
• Health and Natural Product Store Suppliers
• Dominant Herbal Supplement Companies
• Leading Broadline Marketers in the Mass Market
• Emergence of Pharmaceutical Giants
• Cross-Over Has Occurred
• Pharmaceutical Supplement Leaders
• New Players with Promise
• Store Brands Play Important Role
• Leading Direct Marketers
• Mail-Order Marketers
• Table 4-1: The U.S. Market for Herbal Supplements: Selected Marketers by Brand Line and Product (133 marketers)

• Leading Herbal Supplements in Health and Natural Product Stores
• Table 4-2: Leading Herbal Supplements (Capsules and Tablets) Distributed by Nature's Best: Share of Sales, 1st Quarter 1999 (company, brand/product, percent)
• Table 4-3: Leading Herbal Supplements (Powder and Liquid) Distributed by Nature's Best: Share of Sales, 1st Quarter 1999
• Leading Garlic and Ginseng Products in Health and Natural Product Stores
• Table 4-4: Leading Garlic Products Distributed by Nature's Best: Share of Sales, 1st Quarter 1999 (company, brand/product, percent)
• Table 4-5: Leading Ginseng Products Distributed by Nature's Best: Share of Sales, 1st Quarter 1999 (company, brand/product, percent)
• Top-Selling Brands in Mass Merchandisers
• Top-Selling Brands in Drugstores
• Top-Selling Brands in Food Stores
• 1999 Leaders Will Change
• Table 4-6: Top Herbal Supplement Products Sold Through Mass Merchandisers: Dollar Sales By Product Segment (in thousands), 1998 (brand and dollars): 2 Product Segments
• Table 4-7: Top Herbal Supplement Products Sold Through Drugstores: Dollar Sales By Product Segment (in thousands), 1998
• Table 4-8: Top Herbal Supplement Products Sold Through Food Stores: Dollar Sales By Product Segment (in thousands), 1998

• New Products Drive Market
• Increased Competition; Survival of the Fittest
• Mergers and Acquisitions
• Large Companies Buying In
• New Potential Mass Marketer
• Pharmaceutical Giants Crowd Out Traditional Companies
• Traditional Players Respond
• Record-High Marketing Budgets
• Lower Price Points and Greater Selection
• Line Extensions Win Shelf Space
• Brand Extensions Bank on Familiarity
• Standardization vs. Whole Herbal Products
• Medical Legitimacy
• Competition for Menopausal Market
• St. John's Wort Wars
• Conflict of Standardization
• Differences Still Remain in Marketing

• A Highly Fragmented Market
• Discounting: A Tool in the Fight for Shelf Space
• Market Segments by Demographics and Symptoms
• Natural and Scientific Innovation Drive Market
• Marketers Promote Through Health and Natural Product Publications
• Advertising Expenditures Up, But Most Competition at Store Level
• Retailers Wooed at Trade Shows
• Seminars and Lectures

• Pharmaceutical Companies Head to Head
• Largest Players Use Consumer Advertising and Promotion
• Health and Natural Products Repackaged for Mass Market
• Medical Authority Endorsements
• Health Product Lines Have Crossed Over into the Mass Market
• Price and Value Competition
• Quick Response to Media
• Educational Programs Boost Sales
• Competition by Stores for Their Own Brands
• Marketers Offer Plan-O-Grams and Shelf-Stocking Assistance

• Corporate Overview
• Move Toward Pharmaceuticals and Biotech
• Herbal Supplements Part of Consumer Health-care Division
• Acquisition of Solgar
• Agreement with PharmaPrint to Create Herbal Line
• Centrum Herbals Backed by Advertising

• Corporate Overview
• Five Business Segments
• Company History
• Research and Development Expenditures
• Consumer Care Division Handles Herbal Supplements
• Introduction of One-A-Day-Herbal Combinations
• Investments in the Future

• Corporate Overview
• Ginsana Is Flagship Product
• A Historic Launch
• Marketing Efforts Under Boehringer
• Growth through New Products
• New Products and Advertising in 1998
• Company Mission and Vision

• Corporate Overview
• Teas with Unique Identity
• Current Products: Tea Blends and Herbal Supplements
• Unusual Corporate History
• Less Than Celestial Growth
• Acquisitions, Agreements and Growth
• Widely Available Brand
• Strategies for the Future

• Corporate Overview
• Product Categories and Lines
• A Modest Beginning
• New Herbal Line Launched in 1999
• Commitment to Herbal Education
• A Company with Vision

• German/American Consortium Leads U.S. Market
• Founded by the Murdock Family
• Two Major Brands, Several Product Lines
• NaturaLife for Mass Channels

• Corporate Overview
• Products
• Health and Natural Product Store Roots, Mass-Market Success
• New Herbal Products
• U.S. Patent and Acquisitions
• Focus on Media in 1999

• Corporate Overview
• Cholestin Top Product
• Scientific Products "From the Ground Up"
• Brief, Volatile History
• A Bold Move in the Right Direction?

• Corporate Overview
• Company History
• Pharmavite Products
• Products Meet USP Standards for Dissolution
• Marketing Efforts
• Pharmavite Vitamin and Herb University

• Corporate Overview
• Complete Product Line
• Herbal Supplements: Nature's Herbs for Natural Product Stores
• TruHerbs for Mass-Market Stores
• Alvita Herbal Teas
• New Acquisitions
• Legal Challenges

• Corporate Overview
• Pharmaceuticals and Candy
• Positioned as a Global Leader
• Enter the Herbals: Quanterra
• "Gold Standard" Advantage
• Cold Business with Celestial

• Growing Emphasis on New Products
• Structure/Function Claims
• Scientific and Medical Language in Advertising
• Pharmaceutical-Type Product Names
• Pharmaceutical-Style Packaging and Promotional Materials
• U.S. Patents and Proprietary Processing
• Educating Health Care Professionals
• Two-Timing the Retail Channels
• Unified Line Names and Brand Extensions
• Retail Display Technology Drives Supplement Sales
• Simplified Pricing Strategies
• Marketers Participate in Co-Op Advertising

• Rate of Herbal Supplement Introductions Steady Since DSHEA
• Table 4-9: The U.S. Herbal Supplement Market: Number of New Product Introductions, 1995-May 1999 (stock-keeping units)
• Products Increasingly Specialized
• A Move Toward Standards?
• Formulating Combos: Herbs with Other Supplements
• "Hot" New Mass-Market Herbal Supplements
• Top-Selling Herbs in Health and Natural Product Stores
• The St. John's Wort Explosion
• Kava Becomes a Top-Selling Herb
• Cold Combinations
• Gender-Specific Products
• Seniors and Aging Baby Boomers
• More Children's Products
• Physician and Group Endorsements
• Products for the Pill-Adverse
• Table 4-10: The U.S. Market for Herbal Supplements: Selected New Product Introductions, January 1998-May 1999

• More Spent on Herbal Supplement Advertising in 1998
• Many Herbal Supplement Marketers Advertise
• Top Advertisers—$20 Million +
• Other Leading Advertisers
• Disease Prevention and Cure Covertly Advertised
• Structure/Function Claims: Limited Medical Language
• Potency and Standardization
• Information, Education, and Entertainment Sell Products
• Scientific References and Language Sells Products
• Catering to the Rat Race
• Fear Sells
• Paradise Found—In a Bottle
• Humor and Wit Lend Levity
• Mother Knows Best
• Self-Care Is In
• Beautiful Bodies, Joyous Images
• Space Age and the Coming Millennium
• Examples of Consumer Advertising and Promotions

• Educational Material Promotes Products
• Toll-Free Numbers and Web Site Address
• Free Samples and Special Offers
• Coupons and Rebates
• Consumer In-Store Magazines
• Radio Health Shows
• Contests and Sweepstakes
• Examples of Consumer Promotions

• Trade Ads Used by Most Marketers
• Messages Different in Mass and Health and Natural Product Markets
• Marketers Use Displays to Compete for Retail Space
• Educational Retail Training Provided by Marketers
• Marketers Offer Retailers Shelf-Planning and Maintenance Services
• Trade Shows
• Discounts Are Common Component of Promotions
• Examples of Trade Advertising and Promotion

• Two Distinct Distribution Sectors
• Health and Natural Product Distributors
• Several Large Distributors Dominate Health and Natural Product Sector
• Centralized Warehouses for Large Health and Natural Product Retailers
• Health and Natural Product Retailers Buying Direct
• Mass-Market Herbal Supplements and Warehouse Delivery
• A Few Mass Marketers Deliver Direct
• Leading Drug Wholesalers
• Table 5-1: Leading Mass-Market Drug Wholesalers, 1998 Sales (dollars)
• Distributor Margins for the Two Sectors Differ
• Forward Buying by Distributors
• Distributor Services
• PharmaHealth Natural Care Centers
• McKesson's Nutristation Program
• Brokers Support Marketers' Sales Efforts

• Health and Natural Product Stores Retain Largest Share
• Mass Merchandisers Second-Largest Outlet
• Slower Growth in Drugstores
• Table 5-2: Share of U.S. Herbal Supplement Sales by Retail Outlet Type, 1998
• The Well-Stocked Herbal Supplement Section
• Category Management: Grouping Products by Function
• Placing Herbs Next to Vitamins
• Margins by Retailer Type

• Retail Sector Essential to Herbal Supplement Industry
• Herbal Products Important to Stores
• Supplement Chains Oriented to Herbal Supplements
• Educated Personnel
• Mass Market Poses Greater Competition for Health and Natural Product Stores
• Meeting the Competition
• Stores Growing Larger, Reaching Broader Customer Base
• Number of Full Lines Carried Is Increasing
• The Whole Foods Approach
• Herbal Selection in a Small Supplement Store
• Private Label Growing in Importance
• Health and Natural Product Retail Prices Are Higher
• Major Promotional Tools
• Slotting Fees—A New Trend?

• Competing on Price, Selection, and Advertising
• Space Devoted to Herbal Supplements
• Private Label Key to Product Mix
• Expanded Efforts to Reach Herbal Supplement Consumers

• Herbal Supplements Are Important to Drugstores
• Larger Chains Welcome Pharmaceutical Giants
• Responding to Competition from Discounters
• Independent Drugstores Banking on Herbal Supplements
• Organization of Herbal Supplement Selection
• Herbal Supplements Usually Placed Near Pharmacy
• Drugstore Staff Typically Not Trained
• Increased Shelf Space
• Chain Drugs Expanding Herbal Selection
• Stores-Within-Stores
• In-Store Education
• Frequent Buyer Programs
• Private Label Big Opportunity

• Share of Sales Small from Herbal Supplements
• Herbal Supplements Usually Located in HBC
• Vitamin/Herbal Tug-of-Wars
• Herbal Supplement Departments Usually Small
• Expanding Selection
• Full "Health Food Store" Departments and Whole Health Stores
• Private Label Efforts
• Training Staff to Answer Consumers' Questions
• Attractive Margins and Higher Prices
• Tips for Stronger Herbal Supplement Sales

• Multi-Level Marketing Works for Herbal Supplements
• Major Multi-Level Marketers Offering Herbals
• Personalized Service and Sales Techniques
• Mail Order Still Strong on Price
• Major Mail-Order Companies Selling Herbals
• Mail-Order Newcomers to Herbal Products
• Herbal Supplement Products Are Naturals on the Internet
• Internet Companies Offering Herbals
• Store-Based Retailers Move Onto the Internet

• The Simmons Survey System
• Use of Herbal and Garlic Products Increasing
• Celestial Seasonings Study Shows Higher Use
• Amount Spent on Herbal Supplements
• Older Consumers, Women, and Westerners Use Herbal Supplements
• Educated Professionals
• Retirement, Education, and Affluence Linked with Garlic Supplement Use
• Divorced or Separated, Westerners, and Two Person Households
• Table 6-1: Demographic Characteristics Favoring Use of Herbal and Garlic Products, 1998 (U.S. adults)
• Gallup Survey's Demographic Profile
• New Users Are Younger
• Herbal Use Linked to Higher Education
• Demographics by Type of Product

• Most Commonly Used High-Profile Herbs
• Usage Trails Awareness
• The Whole Foods Survey of Health and Natural Product Shoppers
• Five Top Herbs Used
• Use of Most Herbal Products Increased
• Some More Recently Introduced Products Show High to Moderate Use
• Use of Some Herbal Products Has Decreased
• Table 6-2: Percent of Health and Natural Product Store Shoppers Who Purchased Herbal Products: By Product Type, 1996 vs. 1998 (percent): 35 Herbs, Other

• Why Users Take Herbal Supplements
• Herbal Products Better Rated for Safety, Cost, and Effectiveness
• Leading Consumer Uses of Top-Selling Herbal Treatments
• Guidance Would Help Non-Users Become Users
• Believers, Non-Believers, and Skeptics
• Believers Subsegments
• Consumers Lack Information
• Top Herbal Information Sources
• Most Important Features Affecting Purchase Decisions
• Nearly One-Third are Dissatisfied
• Potential New Users Among Non-Users

Appendix I: Examples of Consumer and Trade Advertising and Promotions
Appendix II: Addresses of selected marketers