Since the natural products industry's largest annual gathering, Natural Products Expo West, in early March, a flurry of trend reports have surfaced, all predicting consumers' future food preferences.
Last week, as Nutrition Business Journal (NBJ) and the Sterling-Rice Group's NEXT forecast questioned whether organic is on a path to eventual irrelevancy, newhope360 reported that local organic production is the biggest food trend in decades, with numbers indicating that the natural and organic food market will continue to outpace growth of the total U.S. food market.
The organic industry recorded $23.4 billion in 2010 and its growth continues to rebound from the recession, reports NBJ. The Organic Trade Association reported 7.7% organic industry growth in 2010, outpacing the growth of total conventional food sales, and industry experts are anticipating greater growth in 2011.
The growth of organic matches recent projections from Nielsen that packaged good sales have been on a steady decline, while fresh and perishable sectors are on the rise. Consumers are taking an increasing interest in the perimeter of the grocery store—produce, dairy, meat, poultry and seafood—and home-cooked meals.
But taking a healthier approach to food is often easier said than done, according to New Hope Natural Media's most recent research, "The Future of Wellness: How Consumers Define 'Healthy' at Retail." Here's what we found during this year's research.
Retail tips from the Future of Wellness research
For the past two years, New Hope Natural Media has spent time in the field—in consumers' homes, kitchens and in the grocery store—to find out what being “healthy” means. Last year, we discovered that people aren't as healthy as they would like to be and there are many barriers to health, including time, money and lack of information. This year, we took the retail angle to find out how "healthy" translates in the retail setting and what marketing, product packaging and labels resonate with consumers.
The common theme: All decisions consumers make when they shop for groceries are hampered by an overarching distrust and a lack of understanding about what makes a product healthy. Consumers told us they are “confused,” “desperate” and “infuriated," and feel they needed to be investigative journalists to decipher labels and marketing jargon.
So who do they trust? People do trust documentaries, such as Food, Inc. For example, one mother we interviewed who lives outside of Boston, said she had stopped eating Tyson's chicken after watching the movie. While mainstream media may be causing consumers to question their food, this doesn't necessarily mean consumers are making lifestyle changes, such as switching to organic.
About the 2 consumer groups
Of course, all consumers are not created equal. We identified four clear consumer groups in our Future of Wellness research. Two in particular provide the greatest opportunity for companies pursuing the health conscious consumer. These are the Basics and the Awakened consumers.
- See food as functional
- Are not emotionally attached to food
- Watch cooking shows, but aren't interested in doing the actual cooking
- Have an emotional attachment to food
- Are interested in knowing where their food comes from,
- Buy food beyond retailers: at farmer's markets, online and from CSAs
While there are many differences between these consumer groups, there are significant areas of overlap. Although both groups say they are shopping the perimeter of the store more, they are also looking for convenience. Retailers have done little to make the shopping experience more convenient, and even small adjustments, such as moving the milk to the front of the store, was noted as a coup for moms in a rush.
Consumers confused about health at retail
The consumer groups lauded healthy guidelines such as the NuVal Nutritional Scoring System, and some questioned why the system doesn't exist in natural products stores, such as Whole Foods Market. For a new customer walking into a natural foods store, it can be a daunting experience trying to navigate foreign products and brands.
These consumers want suggestions and help for being healthy. Convenience could look like an end-cap that includes a recipe card with all of the products for a healthy meal. And instead of an "organic" aisle, it's clear that these two consumer groups as looking more for a "heart healthy" or "healthy kid's lunch" aisle—but you won't find these aisles in stores.
Convenience could also mean accelerating the sampling process. These two consumer groups love samples, but they don't just want a cube of cheese. They want solutions for their picky kids or to expand their limited food repertoire. Reach these consumers by providing bins with single portion healthy lunch snacks, so families can readily try different foods without getting stuck with a box of crackers they don't like.
Which brings us to another point: size matters.
The end of the 'super-size me' era?
A recent Pew Research Center study showed that barely half of the adult population is married. Add to this the fact that many families have only one child, or their children have left the house. Could this be the end of "super sizing" food products?
If a consumer wants to try a new cereal or cracker, they better like it, because it may take them a month to finish it. That's not very encouraging for a foodie or someone who likes to eat a variety of foods. Conclusion: Sample sizes are welcome.
If not a sample size, then offer a coupon, but don't make consumers work so hard for the discount. Coupons at point of purchase are always preferred for the Basics and Awakened consumers. The general sentiment around coupons is: “There are coupons for Ho Hos but no coupons for carrots.” From the perspective of the consumer, it feels like manufacturers and retailers aren't working to meet their needs. Instead they're just trying to sell them products at any cost.
The local connection
Likely due to their confusion over health, these consumers aren't loyal to a specific retailer. They cite few brands they love, and they shop at up to four stores. They wish they had one store to go to, but no one store has given them everything they want or need.
This feeling that their needs are not being met by conventional retailers, or even online outlets, has driven consumer interest in local food. Eating local is more compelling because people want to know the story behind their food and talk to the farmer that grew it. Dr. Oz can give all the health advice he wants, but people still want to discuss that advice in-person.
Conventional retailers are not as successful as natural retailers in meeting the core needs of the Basics and the Awakened. In general, the grocery retail setting should be ripe for interaction. What if grocery shopping was like an Apple store experience, where consumers are greeted, guided through the products and given troubleshooting help? Retailers and manufacturers could stand a lot to gain from such interaction if they listened closer to what the customer wants, versus what they want the customer to buy.
For more information on the Future of Wellness research, please contact Tara Burkley.