Natural Foods Merchandiser

Who’s Pushing the Shopping Cart?

What really matters in a store may depend on who your customer is.

According to a new study conducted by The Natural Foods Merchandiser and The Intelligence Agency, natural, organic and health shoppers can be divided by service preference into four consumer segments.

By knowing what?s important to each segment, retailers can tailor their messages to their core customers. For instance, if you have a dietary supplements store with a juice bar and some food, and most of your customers are in the group known as service seekers, you might want to promote your store this way: It?s not always about price. Different groups of shoppers value different aspects of the shopping experience.

Product passionates
These shoppers want very fresh food, local products and lots of choices. They prefer a store that carries a higher proportion of organic, natural and health products. They?re willing to pay for what they want, but only for the best quality products.

Adrianne Mossman of Phoenix and Jay Hong of Houston are product passionates. ?If I?m buying produce, I look for no pesticides first, then price,? Mossman says. ?If I?m buying meat, I would never consider buying nonorganic, so price is my primary criterion among those left after quality.? Hong says he spends 75 percent of his total food budget on natural, organic and health products. He says it seemed silly to him to buy substandard conventional food when he can taste the difference in quality of organic and natural. He also likes shopping in his local Whole Foods because they have a huge variety of vegetables—some which can?t be found in a conventional store.

Product passionates spend 29.4 percent more than the average shopper on food, 0.4 percent less than the average shopper on supplements and 20.3 percent more than average overall. Stores with higher-than-average proportions of these shoppers are consumer buying clubs, supernaturals, gourmet food stores and network marketing.

Primarily pricers
These customers want to eat well and take care of their families, but they watch their pennies and will shop around for a deal. In addition to low prices, they say they want stores that have very fresh food and good variety. They also want a store that?s nearby.

Irene Miller of Monticello, Minn., is a primarily pricer. She says it?s reasonable to spend 15 percent to 20 percent more for organic or natural versions of conventional items, but since she?s affected by price, she?s more likely to try a new product if she has a coupon for it. Thomas Miller of Nashville, Tenn., says that he?s not brand loyal; he buys what?s cheapest. Primarily pricers spend 22.3 percent less than the average shopper does on food, 7.8 percent less on supplements and 17.8 percent less than the average shopper overall. Stores with higher than average proportions of these consumers are club stores, pharmacies, supermarket and other (Internet, mail order).

Service seekers
These shoppers have questions about natural/organic food and health supplements. They want stores with staff who are available, helpful and knowledgeable—and who know them and can meet their unique wants and needs. They also want very fresh food and good product variety.

Shaunita Etuk of Rock Hill, S.C., recently moved, but misses her old natural foods store. It was a no-frills store, but the people were incredibly friendly and helpful, and they knew their regular customers, she says. Laurie Scriven of Beaverton, Ore., enjoys shopping in her naturals market because they have ?done their research? to stock high quality, fresh, good tasting, helpful foods and supplements. She adds that the staff is friendly and welcoming and they really know what they?re talking about. Service seekers spend 8.6 percent less than the average on food, 8.3 percent more than the average on supplements and 3.4 percent less than the average overall.

These consumers would prefer to purchase their natural, organic and health foods at vitamin, mineral and supplements stores; mass merchandisers (Wal-Mart, Target); natural foods stores; and pharmacies.

Convenience cravers
Convenience cravers want to be healthy, but they?re in a hurry. They want stores that are close to home or work. They want to be able to get in and out of a store quickly. If they have questions, they want a staff person to be right there. They also want very fresh food.

Jennie Schultz of Rohnert Park, Ala., shops at Oliver?s, Whole Foods and Community Market. She says she prefers Oliver?s because it?s the closest and offers conventional and organic items. She says the food is well-organized and the store is easy to navigate.

Convenience cravers spend 14.5 percent less than average on food, 11.6 percent more than average on supplements and 6.5 percent less than the average shopper overall. Stores with higher than average proportions of these consumers are vitamin, mineral and supplements stores; mass merchandisers; conventional supermarkets; and club stores.

Who?s in Your Store?
Supernaturals appeal to higher than average numbers of product passionates, along with solid numbers of service seekers and convenience cravers.

Natural Foods Stores appeal to higher than average numbers of service seekers and product passionates, as well as some convenience cravers.

Vitamin, Mineral & Supplements Stores appeal among food shoppers to higher than average numbers of convenience cravers and service seekers, lesser numbers of primarily pricers and product passionates. Shoppers for supplements in VMS stores are more likely to be service seekers and product passionates, less likely to be convenience cravers and primarily pricers.

—S.B.S.

Natural Foods Merchandiser volume XXV/number 8/p. 14


Indexed Spending by Consumer Segments

Service Seekers Index

Convenience Cravers Index

Product Passionates Index

Primarily Pricers Index

Food

Club Store

128.6

106.3

32.1

155.5

Mass Merchandiser

124.2

123.3

68.3

113.5

Natural Products Supermarket

92.3

93.6

125.1

79.2

Conventional Supermarket

98.4

108.5

73.8

126.3

Pharmacy/Drug Store

121.4

100.4

60.7

130.6

Vitamin, Mineral & Supplements Store

158.7

174.9

61.7

85.3

Natural Foods Store

121.4

91.3

104.9

86.0

Gourmet/Specialty Foods Market

71.6

75.3

110.6

111.9

Consumer Buying Club

0

0

204.9

73.4

Network Marketing Distributor

109.3

0

109.3

117.5

Other

75.9

100.4

91.1

122.4

Total

100

100

100

100

Supplements

Club Store

95.0

117.9

65.3

134.1

Mass Merchandiser

122.3

107.5

65.0

123.3

Natural Products Supermarket

94.4

66.3

130.2

81.5

Conventional Supermarket

130.1

114.8

65.1

116.6

Pharmacy/Drug Store

91.1

92.1

101.2

106.1

Vitamin, Mineral & Supplements Store

112.5

99.7

108.5

84.2

Natural Foods Store

98.1

173.8

98.1

79.1

Gourmet/Specialty Foods Market

109.3

45.2

82.0

132.2

Consumer Buying Club

0

129.1

195.2

42.0

Network Marketing Distributor

44.3

146.6

118.2

95.3

Other

83.7

81.4

108.3

105.9

Total

100

100

100

100

Source: NFM/IA

These indexes show which store types various kinds of shoppers say they patronize. The higher the number rises over 100, the more likely the shopper was to spend money on naturals in that channel. Indexes under a hundred mean the shopper is less likely to buy natural products there.

Natural Foods Merchandiser volume XXV/number 8/p. 14


Who Are They?

Higher income people (those making more than $75,000 in annual household income) tend to be convenience cravers and product passionates. Older people, age 55 and up, tend to be service seekers and product passionates. Younger people, age 35 or less, tend to be convenience cravers. People without kids tend to be product passionates or primarily pricers; those with kids tend to be convenience cravers and service seekers. Marital status and education are all over the map.

—S.B.S.

Natural Foods Merchandiser volume XXV/number 8/p. 14


Spending by Consumer Segments

Spending

Total %

Food Spending

Index

Supplement Spending

Index

Total Spending

Index

Service Seekers

18.30%

$137.78

91.4

$72.65

108.27

$210.43

96.6

Convenience Cravers

11.10%

$128.91

85.52

$74.86

111.57

$203.77

93.54

Product Passionates

36.60%

$195.13

129.45

$66.83

99.6

$261.96

120.25

Primarily Pricers

34.00%

$117.09

77.68

$61.88

92.22

$178.97

82.16

100.00%

$150.74

100

$67.10

100

$217.84

100

Source: NFM/IA

The foodies of our research, product passionates, spent almost twice as much on food every month as our primarily pricers.

Natural Foods Merchandiser volume XXV/number 8/p. 14


Purchase Channels for Natural, Organic and Health Products

Purchased Natural Organic and/or Health Food

Purchased Herbal Products, Vitamins, Natural Remedies and/or Supplements

Purchased Natural, Health or Organic Products (combined)

Club Store (Costco, Sams Club)

18.90%

23.50%

31.50%

Mass Merchandiser (Wal-Mart, Target, Meijer)

25.60%

39.70%

47.20%

Natural Products Supermarket (Whole Foods, Wild Oats)

65.50%

50.70%

68.60%

Conventional Supermarket (Safeway, Albertsons, Kroger)

60.00%

28.80%

64.80%

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

11.30%

34.50%

38.40%

Vitamin, Mineral & Supplements Store*

15.10%

31.90%

35.60%

Natural Foods Store**

40.70%

26.80%

44.40%

Gourmet/Specialty Foods Market

32.80%

15.70%

34.20%

Consumer Buying Club

1.90%

1.60%

2.30%

Network Marketing Distributor (Shaklee, Herbalife)

3.40%

7.90%

8.80%

Other

6.10%

9.70%

11.40%

Source: NFM/IA

* A ?Vitamin, Mineral & Supplements Store? was defined as having 4 or fewer aisles with 50% or more of the store devoted to dietary supplements and natural remedies.
** A ?Natural Foods Store? was defined as having 4 or fewer aisles with 50% or more of the store devoted to food.

Consumers of natural/organic foods and supplements are purchasing these products in significant numbers from every major food and health retail channel in the United States. The average number of channels shopped (at least some of the time) for health food and supplements is almost four. Natural products supermarkets are being visited by the highest proportion of respondents for both food and dietary supplements.

Natural Foods Merchandiser volume XXV/number 8/p. 14


Natural Foods Merchandiser volume XXV/number 8/p. 1, 14

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