Natural Foods Merchandiser

Natural flock expands with converts

Not surprisingly, most people who buy natural, organic and health products do so to avoid harmful preservatives and additives, and to improve their overall health.

But the trigger, the reason they first traveled down nature's path, varies widely from one person to the next. In a May survey for The Natural Foods Merchandiser by Traverse City, Mich.-based Avero Research, knowledge gleaned from a news story was the most frequently cited reason for trying natural, organic and health products for the first time. But many of the responses were as individual as the shoppers themselves.

One person had a friend die of cancer linked to pesticides. Another wanted to lose weight. And one started shopping at Whole Foods during a grocery strike. Whatever the case, motivations are worth studying, as 29.9 percent of consumers who use natural, organic and health products started using them in the last year, and 43 percent of veteran naturals shoppers say they've increased use of these products during the last year.

Among all naturals consumers, 21.7 percent say they began using natural, organic and health products after learning something in a local or national news story finding that supports a traditional strategy of media advertising.

Friends and family are also big motivators, at 13.2 percent and 9.7 percent respectively, which suggests retailers could find creative ways to build business with "for you and a friend" promotions or by offering seasonal gift items and gift cards or certificates.

Lisa Talak, 44, of Pittsburgh, says her 16-year-old daughter introduced her to healthier eating four years ago. "She got me into eating different things—soymilk and stuff like that she likes," including organic fruits and vegetables, tempeh and guacamole from the prepared food section of Whole Foods. "Now and then we'll be going to the store and try something new that her friends' parents bought and she'll taste it at their house. She'll make me taste it, and usually we get hooked."

Attesting to the power of close connections, Ryan Blanchard made his first move toward organic and natural foods through a high school crush on a vegetarian girl.

"I did what I thought I had to do to impress her," says Blanchard, 30, of Dearborn, Mich. "The more she taught me, the more I learned. The more I learned, the more interested I got. Long story short, I didn't get the girl, but I have led a more healthy lifestyle because of her."

While some, like Talak and Blanchard, remember a specific event in their lives that attracted them to natural, organic and health products, for others (12.9 percent), eating clean has been a way of life as long as they remember.

Another 14.2 percent of consumers began trying natural, organic and health products either because they developed a health problem, or a doctor or other health practitioner urged them. And contrary to research that says children are a gateway to more adult consumers, just 5.1 percent of respondents to the Avero survey said that having children started them using natural, organic and health products.

Product safety—avoiding harmful ingredients—topped the list of most important reasons for buying natural and organic foods for 42 percent of consumers. (Consumers also indicated they would feel safer shopping in a store that has high health and safety standards, verifies its suppliers' standards, has strong oversight on meat and poultry products, limits the use of pesticides, steers clear of all genetically modified foods, and performs consistent testing of its products, among other safety protections.)

Another 22 percent say the positive effects that natural, organic and health products can have on their and their family's health is the most important reason behind their naturals purchases.

"As I grew more aware of my body and seeing what was being considered nutrition, I thought I needed to look for better," says Michael Roberson, 41, a massage therapist from Aliso Viejo, Calif. "I believe what we eat … affects our lives. Keeping to a more natural and organic lifestyle should help to promote that cause."

Other "most important" reasons include product uniqueness, taste, sustainability and eco-friendly production and overall food quality.

Among those who have purchased natural/organic/health products for one year or more, 43 percent said they increased consumption in the last year, and 53 percent said they bought about the same amount. Just 4 percent said they bought less, indicating that once consumers make the choice to shop natural and organic, they don't go back.

Why are some consumers buying more? The reasons are both big and small. The top two factors: advice or information received from a friend or relative, and advice or information received from a health practitioner. The findings suggest that retailers should work to build strong relationships with doctors, naturopaths, chiropractors and the like. A few ideas: Send them copies of news stories covering current issues about food and health, invite them to give in-store lectures around their area of expertise, or deliver an organic lunch to their office.

Consumers say health or lifestyle magazines and coupons are the third-biggest element driving their increased use of natural, organic and health products. Other factors include reading a book by a health expert, in-store samples, a product label or information supplied with a particular product, and news stories.

There's more evidence that information is a powerful tool.

In Avero's survey, 36.7 percent of consumers who don't buy natural, organic and health products, and 61.4 percent of those who do, say they agree either "somewhat" or "completely" with the statement: "I would consume more organic, natural and health products if I knew more about these products."

Overwhelmingly, the data supports a store strategy that's heavy on variety and quality of produce. Produce is the first destination in the healthy-eating universe for the greatest share of consumers, followed by vitamins and herbs and herbal products. Produce also ranks No. 1 among products for which existing consumers are most satisfied and No. 1 among products for which shoppers would make a "special trip" to the grocery store, followed by meat, fish, specialty or imported cheeses and fresh baked goods.

Blanchard says produce is the most important category of his grocery shopping. "It seems commercially grown produce, with all its pesticides and fertilizers, has a more direct path to our bodies."

Suggestions consumers offered about what retailers could do to make them more comfortable shopping in a particular store included creating a "local faces" section—of local farmers—in their store's produce department and posting more information about the origins of products.

Kelly Pate Dwyer is a Denver-based freelance writer.

Natural, Organic and Health Product Use in the Past Year

Of existing consumers—those who have been purchasing for 1+ years:

43% report consuming more natural, organic and/or health products

53% report consuming the same amount of natural, organic and/or health products

4% report consuming a fewer amount of natural, organic and/or health products


Which of the following factors caused you to increase your use of any organic, natural or health products within the past year?

Rank

Factor

% Affected

1

Advice/information direct from a friend or relative

35%

2

Advice/information direct from a health practitioner

34%

3

Health or lifestyle magazine

33%

4

Coupon

27%

5

Book by a health expert

27%

6

In-store sample

26%

7

Label or other information supplied with product

23%

8

Article/story in local newspaper or on local TV/radio program

22%

9

Article/story in other national newspaper/magazine or on national TV/radio program

19%

10

Website

18%

11

Product display

13%

12

A product demonstration conducted in-store by a person

12%

13

Product advertising

12%

14

Personal speaking appearance by a health expert

10%

15

Advice/information direct from a store employee

9%

16

In-store information station or computer

7%

17

E-mail from an organization or company

7%


Most Important Reasons for Buying Food Products

Rank

Categories

% Listing as Most Important

1

Safety: These products are less likely to have harmful ingredients or additives.

42%

2

Product Healthfulness: These products have a more positive influence on my health and/or my family's health.

22%

3

Product Uniqueness: These products are more interesting or unique.

13%

4

Product Taste: These products taste better.

8%

5

Sustainable/Eco-Friendly Production

7%

6

Overall Quality: These products are of better overall quality.

7%


I would consume more organic, natural and health products if I knew more about these products.

"UnNatural"

ONH* Consumer

Completely Disagree

7.7%

3.5%

Somewhat Disagree

10.2%

8.2%

Neither Agree Nor Disagree

39.1%

24.9%

Somewhat Agree

26.1%

34.0%

Completely Agree

10.6%

27.4%

No Opinion

6.3%

2.0%

* Organic, natural and health products


Penetration of Natural, Organic and Health Products

Percent of Respondents Reported Consuming Within Past 12 Months

No Organic, Natural or Health Products at All

36.6%

Vitamins, Minerals and Other Dietary Supplements

45.1%

Natural Food Products

30.2%

Organic Food Products

29.2%

Health Food Products

26.7%

Herbal Health Care Products or Other Natural Medicines

20.8%

Organic or Natural Personal Care Products

16.0%

Organic or Natural Household Cleaning Products

12.9%

Organic or Natural Pet Products

7.1%


Percent of Household Food/Household Items Spent on Natural, Organic and Health Products

%

Network Marketing Distributor

44.0

Natural Foods Store

38.7

Natural Products Supermarket (such as Whole Foods, Wild Oats)

38.0

Web Site/Internet

36.0

Vitamin, Mineral & Supplements Store

32.0

Gourmet/Specialty Foods Market (such as Trader Joe's, Cost Plus)

30.7

Mass Merchandiser or Club Store (such as Wal-Mart, Target, Costco, Sam's Club)

24.1

Conventional Supermarket (such as Safeway, Albertsons, Kroger)

21.8

Pharmacy/Drug Store (such as CVS, Rite Aid, Walgreens)

18.7

Other (please explain)

34.4

Total

29.10


Motivations: Events Causing Trial of Natural, Organic and/or Health Products

Which of the following best describes the reason you started using organic, natural, and/or health products?)

%

I learned something in a national or local news story that made me try them

21.7

A friend/acquaintance urged me to try them

13.2

I just grew up using these products

12.9

A family member urged me to try them

9.7

I developed a health problem

8.6

My culture/community favors the use of these products

6.3

A doctor or other health practitioner urged me to try them

5.6

I had children

5.1

Other

16.8

Total

100.0


Most Important Reasons for Consuming Supplements (1-5 Ranking)

Rank

Categories

% Listing as Most Important

1

Product Safety: These products are less likely to cause harmful side effects.

39%

2

Product Efficacy: These products work better to improve/maintain my health and/or the health of my family.

30%

3

Product Uniqueness: These products are more interesting or unique.

13%

4

Overall Quality: These products are of better overall quality.

9%

5

Product Expense: These products are less expensive over the long run.

8%


Most Important Reasons for Consuming Personal Care (1-5 Ranking)

Rank

Categories

% Listing as Most Important

1

Product Safety: These products are less likely to cause harmful side effects.

51%

2

Product Efficacy: These products work better for me and/or my family.

14%

3

Overall Quality: These products are of better overall quality.

14%

4

Product Uniqueness: These products are more interesting or unique.

13%

5

Product Expense: These products are less expensive over the long run.

7%

Conclusion: Knowing that a big part of consumer motivation has to do with what these products lack is important information for a retailer who is developing internal communications and serving customers on the floor. Product standards and other assurances that can reinforce consumer trust in these areas is treated in greater detail in the section on "Trust."


I trust that products labeled "certified organic" are healthier than similar products that are not 'certified organic'


I trust that products labeled "certified organic" are of better overall quality than that are not "certified organic."


I trust that products labeled 'certified organic' are healthier than similar products that are not 'certified organic'

Total

UnNatural

ONH Consumer

Completely Disagree

Count

29

60

89

%

10.2%

3.6%

4.5%

Somewhat Disagree

Count

37

158

195

%

13.0%

9.4%

9.9%

Neither Agree Nor Disagree

Count

118

411

529

%

41.5%

24.3%

26.8%

Somewhat Agree

Count

62

677

739

%

21.8%

40.1%

37.5%

Completely Agree

Count

18

360

378

%

6.3%

21.3%

19.2%

No Opinion

Count

20

23

43

%

7.0%

1.4%

2.2%

Total

Count

284

1689

1973

%

100.0%

100.0%

100.0%

Conclusions: Organic is a standard that resonates even with consumers who do not use organic products. Two other concepts, fair trade and local, are close in terms of their level of significance.


Barriers

"I would consume more organic, natural and health products if these products were less expensive."

"UnNatural"

ONH Consumer

Completely Disagree

9.9%

2.6%

Somewhat Disagree

8.8%

5.3%

Neither Agree Nor Disagree

33.1%

12.1%

Somewhat Agree

21.5%

26.7%

Completely Agree

21.5%

52.2%

No Opinion

5.3%

1.1%

N =

1973

Current consumers would love to consume more, but over 50% completely agree that price is an obstacle. Over 40% of nonconsumers would also purchase more organic, natural and health products if the price would come down.


I would consume more organic, natural and health products if there were not others in my household with different preferences from mine

"UnNatural"

ONH Consumer

Completely Disagree

14.8%

18.9%

Somewhat Disagree

13.0%

15.8%

Neither Agree Nor Disagree

42.6%

29.0%

Somewhat Agree

12.7%

18.8%

Completely Agree

7.7%

12.9%

No Opinion

9.2%

4.6%

Conclusions: Understanding these barriers can lead retail managers to develop creative ways to remove them for existing and prospective customers. Obviously, strategies to manage price image and to make the unfamiliar familiar will yield an immediate payoff from consumers who wish to deepen their involvement with organic, natural and health products categories.


Service Components That Drive Customer Loyalty

Rank

Natural Products
Supermarket

Vitamin/Herb/
Supplement Store

Natural
Foods Store

1

Product Freshness

Product Freshness

Product Freshness

2

Store Environment

Product Selection

Staff Knowledgeability

3

Product Selection

Staff Helpfulness/Courtesy

Staff Helpfulness/Courtesy

4

Staff Helpfulness/Courtesy

Staff Knowledge

Store Environment

5

Staff Knowledge

Staff Availability

Items in Stock

Conclusions: Beyond having the basic right assortment of products at a reasonable price, these are the variables upon which a store can differentiate itself, retain loyal customers and leverage positive word-of-mouth referrals. Every decision, from deciding whether or not to shrink "tired" produce to deciding whether or not to insist on staff courtesy on the floor, should be thought of in terms of "How is this going to affect my customers perception of my differentiating service?"


In the past 12 months, have you been disappointed enough with a particular store or outlet to stop shopping there completely?

Yes

22%

No

78%

Some common reasons:

"The store became too dirty and crowded and wasn't worth going to anymore."

"Rude customer service. Employees act bothered by questions."

"The produce was disgusting, the store was unorganized, and some popular products were out of stock for a few days."

"Items were not easy to locate, the store was too crowded, staff was rude and unwilling to help, and the wait to check out was entirely too long."

"They relocated to bigger size store, but DISCONTINUED many regular products rather than add to their repertoire (& raised prices)."

"The store had gotten very snobby, including some of the checkers and counter help."

"Selection (especially meat) went from good to very, very average."

"They stopped filling prescriptions for women who need birth control or emergency contraception. They'll never get another nickel from me."

"They didn't have all the necessary items on my shopping list... I prefer to one-stop shop... not a fan of multiple shopping stops."


Signature/Destination Categories:
For which organic/natural/health grocery products for which you will make a "special trip?" Top 10 answers:

Fresh Produce

48.1%

Fresh Meat

35.6%

Fresh Fish

32.8%

Specialty or Imported Cheeses

29.5%

Fresh Baked Goods

22.4%

Ethnic Products

22.2%

Beer, Wine or Spirits

21.3%

Bulk Items or Ingredients

17.8%

Fresh Juices and Smoothies

17.3%

Specialty Coffee and Espresso Drinks

17.3%

Conclusion: Many of these categories are unique areas upon which a store can base a reputation and create a draw for natural products consumers. In an era of increased competition for the same core set of products, developing a strong reputation as "the best bakery in town" is a good way to:

  • Woo new customers who may be switching stores
  • Give your existing customers another reason to stop by regularly
  • Build wallet share an a more defensible competitive position

Trusted Sources of Information

We asked respondents: In the event there is national news about the health effects associated with a particular food or product, which source of information do you trust for the straight story.

Source

Always Trust

Always or Usually Trust

Source

Always Trust

Always or Usually Trust

Advice/information directly from a health practitioner

20.2%

78.1%

Website

7.7%

42.8%

Advice/information directly from a friend or relative

11.5%

55.9%

Article/story in local newspaper or on local TV/Radio program

6.4%

43.7%

Article/story in health or lifestyle magazine

9.7%

52.3%

In-store information station or computer

5.5%

37.3%

Article/story in other national newspaper/magazine or on national TV/radio program

8.6%

45.5%

E-mail from an organization or company

5.5%

31.0%

Personal speaking appearance by a health expert

8.2%

48.6%

Product advertising

5.1%

26.2%

Book by a health expert

7.8%

53.2%

Advice/information directly from a store employee (one of your primary outlets)

4.9%

32.2%


Attitudes About Herbs

Please indicate the extent to which you agree with the following: Herbal products are generally safe and rarely cause negative side effects.

2004

2006

Completely Agree

14%

13%

Somewhat Agree

43%

42%

Neither Agree Nor Disagree

20%

26%

Somewhat Disagree

18%

15%

Completely Disagree

4%

4%


Past and Prospective Marketing

Finally, we asked two questions that give further insight for how a store should approach more traditional marketing.

In the past 12 months, have you purchased a product or service after becoming aware of any of the following?

If a new store opens close to you carrying products you want at a fair price and with good service, how should this store promote itself so that it is most likely that you will try the store?

Television advertising

29.8%

10.8%

Sale flier inserted into the newspaper

28.2%

21.9%

A promotional piece received by mail

21.7%

28.9%

Newspaper advertising

18.9%

12.1%

A promotional e-mail

18.3%

6.6%

Radio advertising

11.6%

5.7%

Outdoor advertising (billboards)

6.0%

4.0%

A promotional piece delivered in person at your home or work

4.1%

3.9%

A promotional piece received by fax

1.9%

0.9%

Other

N/A

5.1%

Conclusions: Consumers tend to favor direct mail as their medium of choice for external communications. This is an arena that natural products stores often do not enter, but many other successful retailers have done fabulously with postcards send to targeted prospect lists.


Natural Foods Merchandiser volume XXVII/number 8/p. 16-17

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