Living in the US for the past year and being the main grocery shopper in the family (yes, I often use Instacart because I don’t have time during the week to head to the store), I have been overwhelmed by the explosion of the natural and organic selections not only in specialty retailers, but also in mainstream retailers like Winn Dixie, Safeway and Costco.
Natural and specialty is now integrated into the mainstream shopper experience, and the access to it for every family is hugely exciting. A lot of retailers now have private label natural and organic brands; even Walmart has a natural and organic-focused line of products, giving so many mainstream shoppers access to organic products at low prices, everyday.
So I think it’s safe to say that growth in natural, organic and specialty products is not a fad, it is here to stay. It’s a long-term trend driven by strong consumer expectations. As a result, retailers are now focused on driving growth and assortment in this space. And that is enabling both manufacturers and retailers to move towards more highly differentiated and higher value products.
In 2013 sales in natural products topped $110 billion. That’s only a small slice of the total retail sales in the US, but it’s the fastest growing segment, and the growth is predicted to continue.
How will that growth continue? Well, there are some key consumer drivers that underpin this growth and market, including:
- The Baby Boomer segment, which is more than 76 million and growing. These consumers are looking for healthier options that speak to wellness and maintaining optimal health.
- Changing attitudes about food and health. Approximately 95% of the US population has made the connection between diet and disease. There is also a perception that pesticides in food are a health risk, causing cancer and harmful to children.
- Concerns about food safety. Besides pesticides, consumers are worried about residues, antibiotics, GMOs, and other chemicals they view as potentially harmful, invading their food supply.
Consumer demand is really what’s driving the growth of the natural, organic, and specialty sector. Retailers and suppliers are listening, and as a result, consumers are seeing:
- Greater availability of organic and natural as it migrates into mainstream grocery chains.
- Improved taste and quality of natural and organic products as compared to national brands.
- Significant financial investment in natural and organic companies.
About 45% of people in the US actively try to include organic foods in their diet,1Source for 45% statistic: http://www.gallup.com/poll/174524/forty-five-percent-americans-seek-organic-foods.aspx and that number will likely increase. They say that organic entry points for consumers tend to be across produce, meat, dairy, baby, and food allergen products. And if I think about my shopping experience while at a mainstream store, if there is a comparable organic option available why wouldn’t I purchase it? If it’s priced competitively, and it’s better for me and my family, tastes better, and ultimately I feel like I am making a better choice by selecting it, then I guess I can include myself in that 45% as well.
|↑1||Source for 45% statistic: http://www.gallup.com/poll/174524/forty-five-percent-americans-seek-organic-foods.aspx|