GNC 2008 Annual Report Download - page 7

Table of Contents
We expect several key demographic, healthcare, and lifestyle trends to drive the continued growth of our industry. These trends include:
• Increased Focus on Healthy Living: Consumers are leading more active lifestyles and becoming increasingly focused on healthy
living, nutrition, and supplementation. According to the Nutrition Business Journal, a study by the Hartman Group found that 85%
of the American population today is involved to some degree in health and wellness compared to 70% to 75% a few years ago. We
believe that growth in the nutritional supplements industry will continue to be driven by consumers who increasingly embrace
health and wellness as a critical part of their lifestyles.
• Aging Population: The average age of the U.S. population is increasing. U.S. Census Bureau data indicates that the number of
Americans age 65 or older is expected to increase by approximately 56% from 2000 to 2020. We believe that these consumers are
significantly more likely to use nutritional supplements, particularly VMHS products, than younger persons and have higher levels
of disposable income to pursue healthy lifestyles.
• Rising Healthcare Costs and Use of Preventive Measures: Healthcare related costs have increased substantially in the United
States. A preliminary survey released by Kaiser Family Foundation and the Health Research and Educational Trust in 2006 found
that between the spring of 2005 and the spring of 2006, premiums for employer-sponsored health insurance increased by 7.7%
more than twice the rate of general inflation for the same period. To reduce medical costs and avoid the complexities of dealing
with the healthcare system, and given increasing incidence of medical problems and concern over the use and effects of
prescription drugs, many consumers take preventive measures, including alternative medicines and nutritional supplements.
• Increasing Focus on Fitness: In total, U.S. health club memberships increased 4.9% between January 2004 and January 2006
from 39.4 million members to a record 41.3 million and has grown 70% from 24.1 million in 1995, according to the International
Health, Racquet & Sportsclub Association. We believe that the growing number of fitness-oriented consumers, at increasingly
younger ages, are interested in taking sports nutrition products to increase energy, endurance, and strength during exercise and to
aid recovery after exercise.
Participants in our industry include specialty retailers, supermarkets, drugstores, mass merchants, multi-level marketing organizations,
mail-order companies, and a variety of other smaller participants. The nutritional supplements sold through these channels are divided into four
major product categories: VMHS; sports nutrition products; diet products; and other wellness products. Most supermarkets, drugstores, and
mass merchants have narrow nutritional supplement product offerings limited primarily to simple vitamins and herbs, with less knowledgeable
sales associates than specialty retailers. We believe that the market share of supermarkets, drugstores, and mass merchants over the last five
years has remained relatively constant. 3