Naturally Network Mid-Year Update: Natural Products Outpacing Growth of the Overall Marketplace
This article first appeared in Presence Marketing’s July 2023 newsletter.
By Steven Hoffman
There are “some key areas where natural continues to be really important and shoppers are continuing to engage despite inflation where they're saying, ‘Natural's important to me and I will continue to spend a little bit of extra money despite price.’” – Jessica Maniscalco, SPINS
Addressing the ongoing theme of inflation, Jessica Maniscalco, Senior Retail Insights Manager of market intelligence firm SPINS, said, “While the impact is still present in natural and specialty accounts, it’s being felt at a lesser rate than in conventional channels.”
Speaking at a recently held mid-year industry trends update webinar hosted by Naturally Network, Maniscalco shared that the drug, convenience and natural channels have seen lower price increases, “which lowers the growth rate compared to the conventional channel,” where price increases have been higher.
Source: SPINS
According to multi-year data tracking by SPINS, Maniscalco said that over time, “overall dollars have continued to grow across all positioning groups while units have been negatively impacted, especially with conventional products, which holds the lion’s share of sales.” Thus, while inflation is impacting overall unit growth everywhere, conventional products are being the most impacted.
“We all know what was going on with eggs most recently and how high the prices have gotten in terms of base price over the past year. So things like eggs, cereal, and bars were among the highest to increase their price. But what you'll notice that during this same time period is that natural and organic products within these same categories have held their prices at a much lower rate than the overall total category during the same time,” Maniscalco said.
Top Natural Categories Show Resilience
Maniscalco noted the top fastest growing categories for natural products, including infant formulas, creamers, salsa and dips, jerky and meat snacks, refrigerated entrees and a few others, are experiencing “exponential growth” versus overall category performance. She also pointed out that there are “…some key areas where natural continues to be really important and shoppers are continuing to engage despite inflation where they're saying, ‘Natural's important to me and I will continue to spend a little bit of extra money despite price.’”
In analyzing the composition of conventional, specialty wellness and natural products sales in brick & mortar retail over the past year, Maniscalco reported that specialty wellness products comprised about 15% of overall product sales. “But when it comes to dollar sales growth, it's lagging while contributing to only 10% of that overall bump. So, this is saying that specialty wellness sales are going up or the dollars are going up, but the price is holding at a lower rate than the conventional and natural products in these channels, so contributing less to the overall growth.”
Maniscalco also reported that, outside of grocery, pet care products and alcoholic beverages also continue to experience significant growth in the natural channel, and advised retailers to be aware of such attributes as “organic,” whose prices have held steadier over time compared to their conventional counterparts.
Source: SPINS
The Rise of the Values Oriented Shopper
In addition, Maniscalco shared data regarding the impact of the values-oriented shopper. “Value oriented has to do with people that are associating certain values or keeping those top of mind when they they're shopping at a store and engaging with products. And almost 50% of shoppers are considered value oriented and they shop differently. Almost 90% of them shop at least once a week, which is 1.2 times a more than the average shopper. So, they're a very valuable customer. When asked what was most important to them when they are going about their everyday shopping or look for new products, is they were really prioritizing ‘good for the planet’ attributes very highly” Maniscalco said.
With such a focus on sustainability, “shoppers are looking more and more now at not only what's good for you health-wise, but how the impact can really go further and whether it's good for the planet, good for animals, etc.,” she noted.
“The other thing that value oriented shoppers are looking for more and more now is functionality, and functional ingredients have been on the rise for several years now. But, it's great to see that it's no longer limited to just the vitamin section or beverages or bars, but really across all aisles we're seeing some type of integration with availability, and shoppers are really looking to get more bang for their buck now,” Maniscalco added. “We know that adaptogens in the form of mushrooms have been seeing huge gains in acceptance, especially since COVID, and they are being integrated in many ways across the store.”
The values oriented shopper “is a very valuable customer. When asked what was most important to them when they are going about their everyday shopping or to look for new products is they were really prioritizing good-for-the-planet attributes very highly. The key takeaway here is how important this shopper is,” Maniscalco emphasized.
SPINS will be releasing a full report later this summer.
Source: SPINS
Steven Hoffman is Managing Director of Compass Natural, providing public relations, brand marketing, social media and strategic business development services to natural, organic, sustainable and hemp/CBD products businesses. Compass Natural serves in PR and programming for NoCo Hemp Expo and Southern Hemp Expo, and Hoffman serves as Editor of the weekly Let’s Talk Hemp Newsletter, published by We Are for Better Alternatives. Contact steve@compassnaturalmarketing.com.
Sugar Free Is Top Sales Trend in Chocolate
Photo: Pexels
This article originally appeared in Presence Marketing’s October 2021 Industry Newsletter
By Steve Hoffman
“People are really thinking about self-care,” Joanna Lepore, Global Foresight Lead at Mars Wrigley, told the Food Institute. In that pursuit, consumers are seeking moments of indulgence from candy and chocolate, but they are increasingly opting for healthier alternatives. According to IRI data analyzed by the Food Institute, in the 52-week period ending August 8, 2021, chocolate candy dollar sales in the U.S. were up 5.8%, reaching nearly $12.8 billion. However, sales of sugar-free chocolate fared especially well over that 12-month span, increasing 27.4% to roughly $225.64 million. Lepore told the Food Institute that Mars Wrigley is aiming to create snacks to help consumers interested in portion control and consuming a “responsible level of calories and sugar.” She added, “We’re thinking about chocolate as to what role it plays in activating brand values, or giving back to sort of bigger planetary causes, but also thinking about it as being primarily this emotional, social connector.”
In related news, Hershey’s – one of America’s biggest names in chocolate – is responding to the plant-based trend by launching “Oat Made” vegan chocolate bars in select retail markets. “We're working with partners to keep a limited number of stores supplied with a limited quantity of inventory… We'll use the results of our in-market testing to determine whether we take the products to a national launch in the future," said Dan Mohnshine, Hershey’s team lead of strategic growth platforms, in a statement. “After finding that the ingredient formulas of existing products could be improved upon, our masterful R&D team at Hershey developed formulas using oats that we believe deliver better on consumers' expectations than what is in the marketplace today,” he said. Hershey’s launched organic Reese’s Peanut Butter Cups earlier this year, and vegan, plant-based Reese’s could be on the horizon, Food & Wine reported.
Iconic natural products company Dr. Bronner’s, however, is already there when it comes to standing behind values, giving back to planetary causes – and innovating plant-based, vegan products. Known worldwide for its natural and organic soaps and for its support of natural health and environmental causes, the company has set its sights on changing the cocoa industry for the better by launching Magic All-One Chocolate, its new line of vegan, fair trade, regenerative organic chocolates. Produced in direct partnership with small-scale cacao farmers, Dr. Bronner’s is using a model it established in 2009 to create its certified organic and fair trade palm oil project, reported Honeysuckle Magazine. “Born from the company’s industry-leading socially and environmentally responsible supply chain and developed with the expertise of world-class Swiss chocolatiers and industry experts—this is a chocolate experience like no other—from the brand that is best known for making soap like no other. Dr. Bronner’s Magic All-One Chocolate is the ultimate expression of ethical business, activist compassion, and deep love for the planet,” the company said in a statement.
HealthLine Projects the Top 7 Vitamin and Supplement Trends of 2021
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This article originally appeared in Presence Marketing’s April 2021 Industry Newsletter
By Steven Hoffman
The dietary supplement industry experienced its highest growth in more than two decades, with a 12.1% increase in 2020 as U.S. consumers focused during the coronavirus pandemic on improving their health and fitness and boosting immunity and wellness, reported HealthLine. The growth trend is expected to continue into 2021, with the following seven trends highlighted by HealthLine for the coming year: 1. Stress and Mental Health – consumers are turning to supplements to support mental health, and a recent report anticipates brain and mental health supplements will grow 8.5% over the next six years; 2. Beauty Support – there’s an increased interest in beauty as a subcategory of the supplements industry, said HealthLine, which reported that Google searches for collagen supplements increased 33% over the past year; 3. Immune Health – there’s been a 50% increase in consumers seeking out immune supporting supplements, according to HealthLine, and expect to see growth in sales of zinc, selenium, B complex vitamins, vitamins C and D, elderberry, echinacea, astragalus, turmeric, ginger, and in particular, medicinal mushroom extracts including chaga, cordyceps, lion’s mane, reishi and others; 4. Vitamin D – As studies link low vitamin D levels with increased risk of complications from COVID-19, vitamin D continues to lead the charge as the top nutrient for overall health, HealthLine said; 5. More Enjoyable Supplement Experiences – Think gummies as consumers seek more convenient and enjoyable delivery vehicles for dietary supplements; 6. Trustworthy Companies – consumers are becoming increasingly knowledgeable about their health, and they’re growing wary of misleading or false health claims, and consumers will pay more for brands they trust to be transparent and honest about their products; and 7. Pet Nutrition – among the fastest growing categories in the pet industry are supplements and pet food products to help ease anxiety, aid skin issues and improve our pets’ gut health, and the pet dietary supplements market is projected to reach a valuation of #3.78 billion by the end of 2021, HealthLine reported.
Natural and Organic Products Sales Grow 12.7% to $259 Billion in 2020
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This article originally appeared in Presence Marketing’s April 2021 Industry Newsletter
By Steven Hoffman
Natural and organic products sales grew an estimated 12.7% to $259 billion, with sales on track to surpass $300 billion by 2023, reported New Hope Network at its virtual Spark Brand Success event, held March 2-4, 2021. Sales were accelerated by the COVID-19 pandemic, as consumers cooked more meals at home and developed a greater interest in healthier food, wellness and boosting immunity. “2020 was a challenging year. But natural and organic brands face a bright future. We are positioned where a growing number of consumers are headed,” Carlotta Mast, SVP and Market Leader at New Hope Network said at the event, the Fermentation Association reported. Natural and organic food and beverages (39% of total sales) and functional food and beverages (31% of total sales) dominate the market, reported the Fermentation Association. Other key findings include: Consumers are prioritizing health and are seeking immunity-boosting and nutrient-dense foods. However, while consumers are focusing on health and wellness more than ever, they’re also struggling with junk food, lack of exercise, and anxiety and sleep issues emerged in 2020. Also, binge drinking is up a disturbing 41% among women since the start of the pandemic, Mast noted. Consumers want less sugar and fewer carbs and additives, and plant-based foods, pantry staples, frozen foods and meat/fish/poultry experienced the highest growth rates, while snack foods and packaged and prepared foods declined as fewer people opted for grab and go offerings during lockdown. Of note, Mast said the pandemic accelerated e-commerce sales, which grew 60% in 2020, generating $16.5 billion in natural and organic products sales. She noted that natural products are outpacing conventional products in e-commerce, with natural shoppers spending on average twice as much as those that buy “traditional” items online. “As you all know, organic is mainstream now,” Mast said. “During other economic downturns that we’ve experienced, the organic sector has typically taken a hit when it comes to sales growth, but not in 2020,” she said.