GNC 2010 Annual Report Download - page 8
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Table of Contents
• 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 52% from 2000 to 2015. 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 healthier lifestyles.
• Rising Healthcare Costs and Use of Preventive Measures. We believe that current economic conditions are affecting health related
choices being made by consumers. A report released by the Kaiser Family Foundation and Health Research & Education Trust in
2009 found that, since 1999, the employee contribution for a family health insurance policy had risen 128%. Additionally, according to
the Nutrition Business Journal's Supplement Business Report 2009, a report by Information Resources Inc. reports that 25% of
consumers indicate that they are cutting back on doctor visits. We believe that as more people lost their jobs and ability to pay for
healthcare, many turned to supplements to remain healthy and ward off expensive doctor visits and pharmaceutical drugs. We
believe that these measures, along with the rising cost of health care, will motivate consumers to purchase more supplements.
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