Natural Opportunities To Sprout Sales
Increasing interest in raw foods and BPA-free containers gives retailers opportunities to grow sales of natural and organic store brand products.
Things are looking good for the natural and organic products market. According to "Natural and Organic Food and Beverage: The Consumer — US," a November 2011 report from global market researcher Mintel, the $18.9 billion natural and organic food and beverage market — which has shown strong growth during the economic downturn — offers "great opportunities for producers and marketers who understand" what consumers want from the market.
And opportunities certainly exist on the store brand side — particularly in the organic sector. Organic and Natural 2012," an October report from The Hartman Group, Bellevue, Wash., says brand preferences among most organic purchasers tend to be "relatively low," with private label products being "almost as popular" as national brand ones.
Trends with traction
Raw foods are "branching out" into new product categories, reports SPINS, a Schaumburg, Ill.-based market research and consulting firm for the natural products industry. In its "Trendwatch 2012" report, the firm points to examples such as raw condiments, fermented unpasteurized sodas and kvass beverages. Meanwhile, cultured raw condiments such as kimchi and sauerkraut are becoming more mainstream.
"Factors believed to be influencing fermented/cultured products' popularity include [consumers'] desire for digestive balance and immune system support, and their growing understanding of how these types of products can meet those needs," the report explains.
On the packaging end, more and more manufacturers are responding to consumer demand for BPA-free containers, the SPINS report says. Canned foods are a major area of concern at the moment. And although many products that come in plastic containers already have switched to BPA-free materials, newly published information indicates that chemicals beyond BPA can leach from those containers.
Given this news, the report says glass packaging might make a viable alternative to cans and plastic. In fact, several companies already are packaging their natural and organic products in glass containers.
"Eden Foods is one of several brands that … package all their tomato products in glass containers, the report notes. "We will likely see more innovative solutions to this issue over the next couple years.
As for merchandising, the Hartman Group report says very few consumers buy organic products exclusively — most supplement conventional purchases with natural and organic items. Therefore, more and more retailers are integrating natural and organic products into their selection of conventional items. By doing so, they're exposing consumers to products that otherwise might have been overlooked, making shopping trips easier, and more.
Trends on the horizon
As for what types of products matter to shoppers, consumers would much rather spend their dollars on organic produce, meats, dairy and other inherently nutritious foods "whose healthful properties are enhanced by organic farming methods," the SPINS report states. Therefore, an increasing number of retailers could start focusing their organic efforts less on cookies, ice cream and other products not seen as having healthful properties to begin with.
The industry also could see more and more retailers working harder to educate shoppers who are having trouble deciding which natural and organic products and brands to buy. The Hartman report says the marketplace is "awash in confusing and conflicting information." And consumers "genuinely appreciate" retailers that help via education related to natural and organic products and agricultural practices.
Consumers want retailers to help them discern the differences before them, like cage-free vs. free-range vs. pasteurized," the report says.