Nielsen: More Americans purchasing organic
In the last year, 88 percent of U.S. households have purchased organic food and beverages — a trend that’s growing in strength as consumers increasingly turn to more healthy and clean options in food, beverages and non-food categories like personal care, according to a recent report from Nielsen.
Retail measurement data validates this shift. In the year ended Sept. 2, dollar sales of UPC-coded organic products grew 9.8 percent, and unit volume increased 11.4 percent compared to the previous year.
But for a variety of reasons, including factors related to product supply and labor inputs, organic products often come with a higher price tag. Nielsen reports that 41 percent of consumers said financial costs associated with eating healthier foods are a barrier to their personal health. Compared to conventional products, organic eggs cost an average of 122 percent more than the average retail price for eggs; organic milk is 87 percent higher; vitamins are 40 percent higher; and baby food is 20 percent higher, according to Nielsen.
But private brands can offer the accessibility of organic products at a more affordable price point, Nielsen states in the report. When looking at the average price for a selection of organic items, the private brands basket was 18 percent less expensive than the branded basket. This suggests that private brands could serve as the entry point for organics among consumers with less disposable funds to spend.
For retailers looking to boost their organic sales at price points that resonate with the average shopper, investing in private-branded organics may open doors to a larger set of consumers on the hunt for healthier foods, regardless of which channel they shop in, according to Nielsen.
In recent years, organics have become more accessible and popular than ever with dollar sales shifting across channel lines, Nielsen stated. While premier natural and fresh outlets account for 26 percent of organic spend, share has started to shift in the last two years. For instance, warehouse/club stores, which gained 0.8 percentage point in the last two years, now represent 27 percent of the total organic spend. Supermarkets, mass merchandisers and discount grocery channels now represent a combined 25 percent share of organic spend, up 2.0 percentage points from two years ago.
Organic growth is also spreading across the actual store, according to Nielsen. While fresh departments are top drivers of success for retailers when it comes to organic offerings, there are still many other opportunities for growth across center store aisles that carry shelf-stable packaged goods, dairy and frozen foods.
Nielsen reports that 29 percent of Americans say organic claims influence their purchasing of food and beverage categories. But the importance of organic does vary across specific fast-moving consumer goods (FMCG) categories.