Survey Says: Research Shows Natural, Organic Channel Saw Steady Growth in 2021
This article originally appeared in Presence Marketing’s July 2022 Industry Newsletter.
By Steven Hoffman
Starting out in the natural and organic products industry in the mid 1980s as an associate editor with media and trade show company New Hope Network, there were a few long after-hours sessions spent each summer pouring over completed paper surveys sent in by retailers, and compiling data with company founder Doug Greene to analyze and publish what has since become a milestone marker for the industry, the Natural Foods Merchandiser’s Annual Market Overview Survey.
Photo Credit: Organic Trade Association
Today, the survey has become much more sophisticated, and so has the market, which has grown 10X since that time to reach $204.6 billion, representing an overall growth rate of 5.5% in 2021, according to this year’s report, published in June 2022.
Once dominated by independent natural products retailers, according to this year’s survey, conventional retailers now command 46.1% of natural products sales, representing growth of 5% in 2021. Combined, independent and large-chain natural products retailers comprised a market share of 31.3% in 2021. However, while independent natural products retailers recorded growth of 4.1%, the large chain and specialty store format saw sales decline by 1.9% in 2021.
Overall, conventional grocers reported natural products sales of $94.4 billion in 2021. Sales were $64 billion among natural products retailers in 2021, comprising independents, small chains and large chain/specialty stores. New Hope estimates there were 21,613 independent and large chain natural channel retail stores in the U.S. in 2021.
Of note, e-commerce sales of natural products continues to grab market share, charting growth of 23.2% in 2021. That’s not surprising, say industry observers, considering consumers were still spending considerable time at home in 2021 during the pandemic. Now, as the world emerges, some of those online consumer shopping behaviors may stick, according to Nutrition Business Journal’s 2022 Supplement Business Report, particularly when it comes to dietary supplement sales. According to NBJ, the supplement industry recorded $59.9 billion in sales in 2021, up from just $43.2 billion five years ago. E-commerce claimed the biggest share of post-pandemic dietary supplements sales growth, reported Rick Polito in the Natural Products Industry Health Monitor.
Photo Credit: Natural Foods Merchandiser 2022 Market Overview Survey, New Hope Network
Across all sales channels, e-commerce “is leading a huge shift in channel dynamics,” according to NBJ Senior Industry Analyst Claire Martin Reynolds. Based on a growth trajectory that is expected to add another $10 billion in dietary supplement sales over the next four years, “2024 is expected to be the record year where e-commerce market share in supplement sales is larger than natural and specialty or mass market retail, coming sooner than previously forecasted given the pandemic-related acceleration,” NBJ reported.
New Hope’s overview also revealed some interesting data regarding the demographic makeup of natural products shoppers.
While a common assumption is that natural channel shoppers are mostly white, well-off moms, that perception is inaccurate, said New Hope’s editors. “In fact, shoppers are fairly evenly divided along gender lines; fewer than half are Caucasian; about 40% are affluent; and more than a third live in households with just two people. Additionally, more than a quarter of natural channel shoppers are Hispanic and more than a third of Asian consumers are significantly more likely to shop at natural grocery stores; 36% of consumers who represent communities of color agree that products at natural retailers were, ‘made with me in mind’ (compared to 32% of all retail customers combined); and Hispanic and Asian consumers specifically are more likely than all natural retail shoppers to agree that they are ‘willing to pay a premium for natural and organic foods and products’ (44% vs. 36%),” New Hope’s researchers reported.
In related news, in its annual Organic Industry Survey, published in June 2022, the Organic Trade Association reported that between 2020 and 2021, sales of organic products surpassed $63 billion, growing 2% during that time period. Food sales, which comprises over 90% of all organic sales, rose 2% to $57.5 billion, and sales of nonfood organic products grew 7% to reach $6 billion in sales.
“Like every other industry, organic has been through many twists and turns over the last few years, but the industry’s resilience and creativity has kept us going strong,” said OTA’s CEO and Executive Director Tom Chapman, “In 2020, organic significantly increased its market foothold as Americans took a closer look at the products in their home and gravitated toward healthier choices. When pandemic purchasing habits and supply shortages began to ease in 2021, we saw the strongest performance from categories that were able to remain flexible, despite the shifting landscape. That ability to adapt and stay responsive to consumer and producer needs is a key part of organic’s continued growth and success.”
Among the strong performers in organic: organic beverages experienced the highest growth (8%) of all major categories, with organic coffee topping 5% growth and $2 billion in annual sales. Organic produce accounted for 15% of the organic products market, bringing in $21 billion in revenue in 2021, a 4.5% increase over 2020. Fresh produce drove growth in that category, at 6%.
While a decline in packaged and prepared organic food sales in 2021 represents a shift away from the pantry loading of 2020, organic baby foods — traditionally a strong entry point for shoppers new to organic — was a bright spot in 2021 with 11% growth. Organic snack foods, which suffered a decline in 2020, saw healthy growth of 6% in 2021, reflecting a return to active lifestyles and demand for healthy, nutritious on-the-go foods.
Among non-food organic products, fiber, supplements and personal care products were the most dominant performers with growth rates of between 5.5% and 8.5% in 2021, said OTA. Textiles, the largest non-food sub-category, represented 40% of the category’s total sales and brought in $2.3 billion in annual sales. Overall, non-food products saw 6% growth in 2021 and represented nearly $6 billion in sales, OTA reported.
However, industry observers caution that the unprecedented inflation the country is experiencing this year could affect sales of typically higher priced organic products as price-sensitive consumers opt for purchasing conventional foods to save money, according to a recent report in the Organic Produce Network. According to an Economist/YouGov poll taken in June 2022, 69% of Americans say changes in the inflation rate have impacted them negatively. In a June 2022 survey conducted by market research firm The Feedback Group, 24% of consumers are substituting similar, less expensive foods and 12% said they are buying fewer organic items and products to cut costs.
“Organic’s ability to retain the market footholds gained during 2020 and continue to grow despite unprecedented challenges and uncertainty is a testament to the strength of our industry and our products. To keep organic strong, the industry will need to continue developing innovative solutions to supply chain weaknesses and prioritizing efforts to engage and educate organic shoppers and businesses,” said OTA’s Tom Chapman.
Making Waves in the Dairy Industry: Kalona SuperNatural™ Goes Above and Beyond During Unprecedented Times
FOR IMMEDIATE RELEASE
Certified Organic Dairy Honors June’s National Dairy Month by Supporting Regenerative Agriculture and Small Scale Family Farmers as a Sustainable Solution to Protect Livestock and Preserve the Land for Future Generations
Kalona, IA (June 22, 2020) – Kalona SuperNatural, an emerging, certified-organic, grass-fed dairy producer and brand is making waves during this year’s National Dairy Month by remaining resilient during these unprecedented times. According to the International Dairy Foods Association, National Dairy Month was created in 1937 to encourage Americans to consume more milk to fix the over surplus of product.
This past spring, many conventional dairies were forced to dispense milk because of a lack of demand. Since the pandemic began earlier this year, Kalona has been busy filling distributors’ large orders and working closely with its more than 40+ Amish and Mennonite dairy farmers in eastern Iowa.
Kalona’s CEO and Founder, Bill Evans, was recently quoted in a series of articles published by Presence Marketing, the nation’s largest independent natural and organic food brokerage firm and New Hope Network, an internationally recognized media leader in the natural products industry. Evans indicated that this is a crucial time for dairies, such as Kalona, to be recognized for the ripple they are making in helping the dairy industry regain strength.
"The conventional guys are having issues because they’ve got a large portion of their manufacturing set up for food service; there was no place for that to go a month ago, and it's still limited," Evans says. "We’ve been able to accommodate a 25-30% increase in sales volume, whereas larger producers are shorting people. Kalona SuperNatural has been more successful than others in balancing our organic milk supply."
With more than six months left on the books for the year, Kalona SuperNatural not only has its eye on the state of the industry, they are also paying close attention to the fields.
Going Beyond Organic
Kalona SuperNatural creates delicious, certified organic cream-topped dairy products that are non-homogenized and batch-pasteurized to preserve the fresh flavors. The Amish and Mennonite farmers that are part of the Kalona SuperNatural family of farms take a holistic approach to farming and have done so for the past 100 years.
The farmers believe in allowing their cows to engage in their natural behaviors and move freely in open pastures. This grazing practice mimics the natural movement of wild herds in times passed and follows regenerative agriculture methods, a sustainable approach to farming. When dairy cows are pasture-grazed, they become a boon for combating climate change.
Kalona also encourages its farmers to practice a technique called mob grazing, which means a farmer will put their herd out to graze on a small plot of land daily. They will continue to rotate the herd to various parcels of land, letting the grazed plots rest and rebuild naturally. This technique is done without the use of pesticides and fertilizers and provides cows with plants and grasses rich in nutrients. The result contains more nutritious milk for consumers.
In Support of Regenerative Agriculture
As awareness of climate change grows, Kalona SuperNatural is looking at innovative farming practices that are traditional, yet sustainable. “We are looking to utilize farms as a force for good,” says Phil Forbes, Kalona SuperNatural’s Director of Supply Chain.
“What’s beautiful about regenerative agriculture is that it’s not prescriptive,” Forbes says. “Regenerative agriculture provides us with a framework of modern techniques done sustainably. We want our farmers to manage their land in a sustainable manner that works within the context of their land. There's creative freedom in that model for farmers, and the outcome is net positive for the entire ecosystem."
Evans adds, “At Kalona, we’re ‘Dairy Proud’ all year long, beyond National Dairy Month. Every purchase of our products is a vote for a healthier planet.”
Where to Find Kalona SuperNatural
Kalona SuperNatural products are available at leading retailers in the western U.S., including Whole Foods Market, Natural Grocers, Sprouts Farmers Market, Fresh Thyme, Hy-Vee, and other independent natural food stores, co-ops, and grocers. Visit kalonasupernatural.com/store-locator.
For wholesale and sales inquiries, please contact Sharon Lake, Supply Chain Manager, sharon.lake@opengatesgroup.com.
About Kalona SuperNatural
Kalona SuperNatural is based in a thriving organic farming community in the heartland of America - Kalona, Iowa. They work with small, sustainable Amish and Mennonite family farms to produce delicious, minimally-processed organic dairy products from pasture-grazed cows. Kalona SuperNatural offers a full line of certified organic dairy products. Learn more at kalonasupernatural.com.
Media Contact
Steven Hoffman, Compass Natural, tel 303.807.1042, steven@compassnaturalmarketing.com
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U.S. Retail Sales of Herbal Supplements Grew 9.4% in 2018
Photo: Pexels
Originally Appeared in Presence Marketing News, October 2019
By Steven Hoffman
Driven by the growth of CBD, mushrooms and immune-enhancing products, sales of herbal supplements in the U.S. increased 9.4% in 2018, according to a new report published by the American Botanical Council (ABC) in collaboration with market research firm SPINS and Nutrition Business Journal. Consumers spent a total of $8.842 billion on herbal supplements across all market channels in 2018, an increase of approximately $757 million in sales over the previous year, marking the strongest year of U.S. sales growth of herbal supplements since 1998, according to the report, available for download here. In mainstream retail outlets, herbal supplements with horehound (Marrubium vulgare) listed as the primary ingredient, including natural cough drops and lozenges, grossed the highest sales in 2018. Goji berry (Lycium spp.) supplements, many of which are marketed for weight loss, experienced the strongest sales growth in this channel, with a 637% increase from 2017. Booming sales of products containing cannabidiol (CBD), a psychoactive but non-intoxicating constituent of Cannabis sativa, made it the top-selling ingredient with the highest percent sales growth (332.8%) in the 2018 natural channel, says ABC. “CBD and mushroom products dominated the 2018 herbal supplement scene, and sales growth remained strong for Ayurvedic herbs and adaptogens,” said Tyler Smith, Managing Editor of HerbalGram, who has co-authored the report since 2014. “There were also a few surprises in the data — sales of goji berry, for example, which had declined sharply in recent years, experienced a significant rebound in 2018,” he said. “This report strongly supports the continually rising consumer preference for natural, plant-based dietary supplements that can have a positive impact on their health,” said Mark Blumenthal, ABC founder and executive director, and editor-in-chief of HerbalGram. “For over 20 years we have been publishing information on the steady growth of the market for herbal dietary supplements in the United States; the market sales results demonstrate the confidence that consumers appear to have in herbal dietary supplements.”
Natural Products Sales Outpace Conventional
Photo: SPINS
Originally Appeared in Presence Marketing News, October 2019
By Steven Hoffman
If you look at the state of the natural and organic products industry, says market research leader SPINS, one of the primary takeaways is this: “The 5% sales growth rate for natural food and beverages over the year ending May 19, 2019, was nearly three times greater than for the overall food and beverage industry—continuing a now-longstanding trend,” reported New Hope Network. “Natural products have been outpacing their conventional counterparts for some time in terms of dollar growth,” said Jessica Hochman, SPINS senior manager of natural insights and innovation research and the lead author of the State of the Natural Industry report in a webinar presenting results from the study. According to SPINS, natural and organic products sales totaled $47.2 billion over the 12-month period and accounted for 10.5% of the overall $448.2 billion food and beverage market. In addition, natural products sales accounted for 29.3% of all food and beverage industry sales growth, says SPINS. In the convenience store channel, while natural products accounted for only 4.6% of total C-store sales, growth of these products over the one-year period was 12.6%, due to rising consumer demand for convenience and natural snacking. The data, presented as part of the Good Food insights series in collaboration with FamilyFarmed’s Good Food Accelerator and Naturally Chicago, Esca Bona and SPINS, will be highlighted on October 7 at Naturally Chicago’s Quarterly Keynote Event in Chicago. Presence Marketing / Dynamic Presence is a Sponsoring supporter of Naturally Chicago.
Forging the Way: Functional Formularies® Liquid Hope™
For Immediate Release:
Contact:
Robin Gentry McGee, Functional Formularies, robin@functionalformularies.com, 937.271.0381
Steve Hoffman, Compass Natural LLC, steve@compassnatural.com, 303.807.1042
Forging the Way: Functional Formularies® Liquid Hope™ Innovative Organic Whole Foods Meal Replacement Wins NEXTY 2014 People’s Choice Award
Award-winning Liquid Hope by Functional Formularies, the world’s first organic, non-GMO shelf stable whole foods meal replacement and feeding tube formula, is poised for growth in the natural products retail and health care institutional channels.
Wilmington, OH (October 17, 2013) – The combination of revolutionary product and the power of social media placed Liquid Hope—the first organic, non-GMO, shelf stable whole foods meal replacement designed for enteral (feeding tube) delivery produced by Ohio-based Functional Formularies—among a select group of 61 nominees for the 2014 NEXTY Awards.
The winners were announced in time to be showcased at Natural Products Expo East this past September. Liquid Hope won the People’s Choice Award in the Natural, Organic and Functional Foods and Beverages Category.
The NEXTY Awards, powered by Boulder-based New Hope Natural Media in conjunction with the Sterling Rice Group, recognizes companies in the natural products space for their ingenuity and innovation in a given category.
While meal replacements and supplements are a fiercely competitive and growing category—U.S. consumer sales of supplements grew 7.5% to $32.5 billion in 2012—the organic whole foods meal replacement feeding tube category was virtually nonexistent until Liquid Hope came to market. The leading conventional feeding tube formula brands are Nestle and Abbott Nutrition.
Robin Gentry McGee is the Founder and CEO of Functional Formularies, the company behind Liquid Hope. The whole foods meal replacement is the first of a line of products developed by McGee in 2006 in an attempt to help her elderly father recover from a traumatic brain injury. McGee realized the hospital feeding tube formula was comprised mainly of ingredients including corn syrup, soy and sugar that may have been genetically engineered, artificial flavors and other chemicals—“no real food to be found,” she says, and thus began her quest to use food as medicine to help her father.
Food as Medicine
As a seasoned chef, certified health coach and entrepreneur, McGee knows Functional Formularies is an opportunity to “delve into the deeper healing properties of food and share with those in need of alternative forms of nutrition due to illness or digestive issues, or simply a desire to consume nutritious whole foods on a regular basis.”
With an extensive ingredient list of pureed gluten-free, vegan, organic whole foods including green peas, carrots, sprouted quinoa, miso, almond butter, turmeric, rosemary and a proprietary vitamin blend, the meal replacement was originally intended for feeding tube delivery however it’s palatable savory flavor works well for anyone seeking increased daily nutrition through oral consumption.
Currently consumers of Liquid Hope range from children as young as 18 months to the elderly suffering from such illnesses as cancer and Eosinophilic Esophagitis, extreme inflammation of the esophagus.
“Many of my cancer and ALS patients have asked me for a whole foods approach to nutritional support and I have not had anything to give them until now. Liquid Hope is a perfect answer to this problem. It is … made to help improve the health of patients, not add to their illness. I would love to have all my patients on it,” said Lynn Goldstein, MS RD CDN, Clinical Nutrition Supervisor for Beth Israel Comprehensive Cancer Center.
With positive response from health care professionals, McGee would like to see the company launch into the larger health care institutional channel, crossover pharmacies, and the natural products retail marketplace. Retail outlets that emphasize education for the consumer are ideal, says McGee. Liquid Hope, available in 12 oz. shelf-stable pouches, is currently sold at Dorothy Lane Markets, select independent natural products stores and online atwww.functionalformularies.com.
Meet Functional Formularies at the Food and Nutrition Conference & Expo
Functional Formularies will exhibit at the Food and Nutrition Conference and Expo October 19-22 in Houston, TX. For more information visit www.eatright.org/FNCE.
For more information about Functional Formularies or to inquire about selling Liquid Hope in your store or health care practice, please email Functional Formularies or call 937.271.0381.
About Functional Formularies
Founded in 2008 by chef, certified health coach and entrepreneur Robin Gentry McGee, Functional Formularies produces organic whole foods meal replacement products, including Liquid Hope, designed for enteral feeding and oral consumption. The company is founded on the principles of “food as medicine” and is an alternative for patients suffering from a wide range of illness as well as those seeking increased daily nutrition through whole foods. For more information visit www.functionalformularies.com.
Communications by Compass Natural Marketing
info@compassnatural.com 303.807.1042