The equity research division of California-based financial firm Wedbush Securities recently released the results of its 2015 Natural Food Survey, which polled more than 600 consumers on their natural foods shopping habits and preferences. As it turns out, while there is an undeniable movement toward natural and organic products overall, consumers remain fairly flexible when it comes to where and how they buy them.
Consumers reported caring less about price and more about the health benefits and availability of natural and organic products. When asked to rank attributes, consumers ranked quality ahead of price, which Wedbush chalks up to an increased willingness to dedicate a higher portion of income to quality foods and beverages. The result is about 80 percent of consumers surveyed buying natural and organic items over the last year overall, as well as over 45 percent of consumers reporting an increase in their buying.
When asked why they don't buy more natural and organic products, just over half of respondents cited price barriers. And as they search for affordable options, buying habits are shifting across the board.
Of the shoppers who said they’ve increased their natural and organic consumption, the vast majority (80 percent) reported purchasing more of these products at their regular supermarket. Wedbush researchers are concerned that this trend will cause a continued migration from specialty grocers toward traditional and club retailers.
Brands on the backburner
In their quest for cheaper alternatives, fewer and fewer consumers are prioritizing brand names. In fact, 83 percent of consumers reported that they’re more influenced by price than brand. And when they were specifically asked how much a brand influences their buying decisions, 60 percent said they’re indifferent; 85 percent said they’d change brands to get a sale price. According to Wedbush, this could translate to increased popularity among private label offerings, as well as consumers opting for naturals from any brand that can keep its pricing competitive.
The Independent Upside
While independent stores may not be able to compete on price, what they can do is focus on “offering new and exciting products that large conventional and mass grocers may be slow to adopt,” said Phil Terpolilli, senior equity analyst, which would tap into consumer desire for quality and availability. “This may help drive traffic trends for them.”