Natural products sales trends and how to capitalize on them

December 1, 2015,  By Daniel Lohman, CPSA

Progressive Grocer – 2016 Category Management Handbook p20-21

Natural product sales continue to dramatically outpace their conventional (mainstream) counterparts. This is true in most every channel and every category. Americans today are focused on and constantly looking for healthier solutions to improve their lives. The old adage “you are what you eat” is resonating across the entire country as we strive to improve our overall health and wellness.

Improved health and wellness continues to be a feature topic in the media, in the news, at schools, and dinner tables all across the country. Natural (better-for-you) brands are leading this trend by providing the thought leadership that resonates with consumers. “True” innovation from natural brands continue to develop the kind of products and solutions that appeal to consumers. This is largely because natural brands are much more closely aligned with their core shoppers wants and needs.  Natural product shoppers will gladly pay a few pennies more for healthy products that meet their needs and the needs of their families. Natural product shoppers carefully read food labels and they are extremely loyal.

At the heart of the natural trend is transparency. Consumers are demanding to know what's in their food.  They want simple ingredients that are easy to understand and trace back to their origins – how the product is produced, how it’s grown, where it comes from, and whether it includes any artificial or modified ingredients.  They also want condition/attribute specific solutions like Gluten-Free, Non-GMO, and organic. As a result, natural product (health and wellness) consumers have larger market baskets with high year-over-year growth.

Market LOHAS (Lifestyle Of Health And Sustainability)*** recently released a New Industry Report to help better understand and identify consumer perceptions around organic and Non-GMO. The survey indicated that 57% of consumers shop Non-GMO over organic.  Consumers surveyed place more value on “trusted brands” (up +48%) compared to products labeled as “natural” (down -36%). It revealed that “top brand choice purchase factors (among regular Non-GMO buyers) were 1) the ingredient list, 2) Non-GMO, 3) taste, and 4) organic”.       Notably, the study highlighted the confusion and the misunderstanding between Non-GMO and organic – it mirrored the confusion found in non-LOHAS consumers.

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