Natural growth: Utah's Nutraceutical industry lays the foundation for continued market dominance.

• Author: Mischel, Marie
• Position: Special Report

While many of Utah's other industries are struggling to maintain their market share, the nutraceutical sector is growing. Nutritional supplements are the second-largest industry in the Beehive State, up from third last year, says Tami Goetz, state science advisor.

"It's a viable, credible industry with critical mass that contributes to the economy," she says.

In 2009, the Economic Development Corporation of Utah reported more than 150 nutritional product companies in Utah, with total revenues ranging from $2.5 billion to $4 billion a year. Utah contributes about 25 percent of the nations market, according to state statistics.

While growth rates in the dietary supplement industry are down from 20 percent to 30 percent seen in the 1980s and 1990s, they're still averaging about 8 percent, says Loren Israelson, executive director of United Natural Products Alliance.

Historically, natural products have done well when consumers have less money to spend, Israelson says. "In a rough economy with high joblessness and high loss of insurance, what do people naturally do?" he asks. "They return to the fundamentals. They have to stay healthy and well. If they don't, there's no safety net. Our industry is part of the safety net, with people rethinking or readopting practices that go back to the 1820s in the United States."

Workers are interested in having a healthy immune system and being able to stay on the job, he points out. "What we try to do is help people stay well. People are willing to spend out of pocket, even with few dollars in the pocket, when they believe--and experience has shown--that that investment preserves any job that they've got, keeps the kids healthy and well, and helps aging parents to feel better."

A GROWTH MARKET

Within Utah's natural products industry, the multi-level marketing sector is particularly strong, growing 10 to 20 percent, Israelson says.

One example of a natural products MLM company that's going strong is Nu Skin, which in November announced record third-quarter results, with revenue of $383.6 million, a 15 percent increase over the prior year. A week after the financial report, the company unveiled architectural renderings for a new $80 million building in Provo.

Like Israelson, Mark R. Bartlett, vice president of Nu Skin's Pharmanex Global Research & Development, believes that health and beauty are important to people even in a down economy. "Nu Skin has made a conscious decision to continue investing in our...