8 trends driving the hardware market

Here’s how XRC, a venture capital firm, says it will continue to expand into the vitamin, mineral and supplement field.

Chances are good that if you walk into the health section of your grocery store, there are many new vitamins, minerals and supplements (VMS) on the shelves that cater to different needs and demographics. From brands aimed at female customers to those looking to attract new customers with flashy graphics and bright colors, it’s what industry analysts say is a “working space” for early stage investors and strategic developers.

But which health topics lead the charge? And what qualities are investors looking for in VMS products? A new report from XRC Ventures has the answers.

The venture capital firm is deeply involved in the VMS space, which has thrived as Americans become more health-conscious and content to spend their hard-earned dollars on supplements that promise improved performance and recover. There is undeniable momentum within the VMS arena, fueled in part by social media entrepreneurs-turned-entrepreneurs who have captured Gen Z’s attention (and wallets) while they are introducing ready-made products.

Case in point: Bloom Nutrition, a brand of herbal supplements and superfoods founded by health and wellness influencer Mari Llewellyn, who rose to social media fame with her weight loss journey the body. After Bloom launched, which quickly went viral on TikTok, major retailers like Target took notice, adding their brand to shelves and online stores. Earlier this year, health and wellness company Nutrabolt (maker of C4 Energy) acquired a 20% stake in Bloom as part of a larger $90 million deal.

While the path from influencer to fitness and health business seems like a sure bet, analysts are more loyal to certain health topics. As investors look for clinical studies and a strong brand, the key groups in XRC’s Q2 Seed-to-Series A benchmark VMS report:

Ozempic effect

Ozempic and other weight loss drugs, which quickly took the diet industry by storm, did not help consumers lose weight and control their health but contributed to weight loss, according to XRC.

Another contributing factor is the name recognition that weight loss medicine has produced (such as Oprah and other celebrities and influencers). With the continued decline, XRC projects that there will be a need for non-prescription alternatives as well as a need for supplements to address nutrient deficiencies caused by the use of weight loss drugs. bodies – such as products like AG1. Supergut, on the other hand, focuses on boosting GLP-1 naturally, which causes a lighter appetite.

Mushroom boom

The homeopathic health scene has expanded rapidly from independent grocery stores to Walmart, and nootropics, adaptogens, and mushrooms have become commonplace.

Wellness has introduced the average consumer to a new world of products that promise focus, better sleep and stress relief – and they’re on board. Spacegoods is one of the many mushroom brands that have sprung up, known for their colorful packaging and catchy product names like “Rainbow Dust”. Travis Barker’s health brand, Barker Wellness, recently added mushroom gummies to its product line as it expands into Sprouts grocery stores nationwide.

As XRC points out, interest in mushrooms and adaptogens has increased dramatically, and mushroom-based supplements are expected to grow 6x between 2018 and 2027. Clearly, XRC says supplement sales for mental health received the highest rates of sales growth in 2023 – and have staying power.

The Femtech Revolution

Until recently, women (who drive more than 70-80% of purchasing decisions) have been neglected in terms of access to contraceptive options and support products related to fertility, menstruation and stop menstruating.

But the rise of women-owned startups in the femtech space has XRC anticipating significant growth, citing Spins director of marketing information Scott Dicker, who said he would be surprised if it has double-digit growth for women’s health. products in 2024.

Long life

Taking steps to support longevity means more than peptide therapy; 45% of American consumers take anti-aging supplements. While Gen Z may get all the attention for their desire for health and wellness, XRC shows that it is the Boomers who are most interested in finding ways to live longer and thrive.

It’s also easier than ever to create your own add-ons through technology. London-based Bioniq uses AI and bloodmarker data to recommend ultra-personalized devices to consumers – an approach that has won investors. The startup recently raised $15 million in an oversubscribed Series B round.

Other Types of Pills

Gummies are already the most popular type of supplement, but new varieties – such as mints, patches and oral strips – are also emerging for their use, reducing sugar and quick absorption.

The Good Patch and Patch Brand are two of the brands that want to make their mark as easy ways to get your daily dose of vitamins or a caffeine boost.

Emotions and Mental Health

Stress and mental health continue to be top concerns for American consumers, leading to a ripe market for anti-anxiety drugs. Even performance-oriented drinks often combine stress-relieving ingredients like ashwagandha. Momentous, a personal performance and nutrition company, introduced Elite Recovery this year as a post-workout drink that includes creatine but also ashwagandha to lower cortisol levels.

Apothékary, a plant-based and women’s business that received a $500,000 investment from Solidcore founder Anne Mahlum, also offers a line of stress-relief products in the form of free tonics. wine.

Performance Nutrition and Hydration

Although nutrition and hydration are not really new products, XRC sees a spate of startups in the area targeting female consumers or offered as low-sugar products. Although it has the potential for growth, it can be a challenge for companies to create a good site.

“As we continue to monitor this rapidly growing segment – rising 27% by 2023 – we believe it is a competitive environment where it is difficult to find a compelling differentiator to truly stand out,” the XRC report says.

One of the latest hydration products to hit the market is Cadence, a zero-calorie drink that bills itself as the first ready-to-drink salt-based drink that has fetched more than $100. million.

Beauty from Within

Finally, XRC sees the difference between beauty and health, which led to a 210% annual increase in supplement sales in 2021. Although this group fell in 2023 with a decrease while 7% of consumers are interested in gut health. digestion, supplements are increasingly being used for improved hair, skin and nails, according to the venture capital firm.

Meanwhile, products like Solluna Glowing Greens are making it easier for consumers to get their greens — and their glow.