From The Fall 2005 Issue of Natural Grocery Buyer

Stalking the wily natural shopper

Sherwood Badger Smith and Lisa Everitt

“What I would like most is one store where I could do all my shopping. Right now I go to several different stores to get all of the products we use.”

Such sentiments—cross-channel shopping and a desire to bring it all together in one location—came up again and again from mainstream buyers of natural and organic products, according to the findings of the 2005 Natural Grocery Buyer Consumer Research Study.

In May, NGB and its sister publication, The Natural Foods Merchandiser, surveyed more than 2,000 consumers of natural, organic and health products around the country via a detailed online survey and in-depth phone interviews. People told us where they shop, how much they spend and why.

“I realized the importance of diet to health when my mom developed cancer,” says Cheryl Pinzone of East Setauket, N.Y., who started eating organic about two years ago. “I use Silk soymilk, [organic] peanut butter, Muir Glen tomato sauce, Cascadian Farm cereals, frozen vegetables and frozen fruit.” But she only purchases such items “occasionally” at Stop & Shop, preferring a local health food grocery. Our results may help you get shoppers like Pinzone to associate your store with the organic and natural products they buy.

The group we surveyed was a broadly representative sample of consumers recruited from multiple sources and shopping in a variety of venues, including mass merchandisers such as Wal-Mart, supermarkets, warehouse clubs such as Costco, Web sites and supplements stores such as GNC. Respondents were screened to ensure that they buy natural, organic and health products at least once per month.

We found that the base of natural products consumers continues to expand. Many of our respondents first purchased natural products within the previous 12 months. Those who have already dabbled are expanding their purchases of naturals product categories: 57.5 percent of all respondents indicate that they are purchasing more natural, organic and health products than they did a year ago.

A 20-year consumer of healthy food, Al DeLaGarza of New Braunfels, Texas, does all his shopping at H-E-B and Wal-Mart. “I’ve really gone back to eating more natural food in order to bring my health, energy and weight back to where I would like it,” he says. H-E-B gets his nod for organics and quality produce; Wal-Mart has low prices on packaged goods such as Kashi cereal. What makes him loyal to a store? “Having the products I want at a price I can afford.”

Like DeLaGarza, quite a significant chunk of all shoppers do at least some naturals shopping in conventional supermarkets: 55 percent of all respondents purchased some natural, organic and health food within the supermarket channel during the past year; 25 percent purchased supplements from supermarkets, and 20 percent purchased natural and organic body care products in supermarkets.

On the other hand, shoppers are not finding everything they want, which forces them to spread their purchases out to other channels: Internet supplements retailers, body care shops, chain drugstores, naturals stores and specialty retailers. William Freeman of Oklahoma buys all his nutrition products from Shaklee, initially through a distributor, now online. “I don’t really like to go shopping,” he says. “This way is much easier. I can just order what I need in a few minutes, and within a week I have it. … There are not too many stores where I live that sell health products.”

Price remains a powerful motivator in store choice, our research revealed. Survey respondents viewed two advertisements —one focused on service and product knowledge, the other stressing low prices. Asked which store they’d rather patronize, they chose Albert’s, the low-price store, by a 5-3 margin. Besides being price-conscious, Albert’s shoppers were more likely to be supermarket shoppers.

Retail buyers know that you cannot be all things to all people, but our supermarket-favoring respondents told us the products they have recently tried that they are happiest with and the natural products or product categories they would most like to see beefed-up at their store of choice.

They’d like to see more organic produce, more skin care products and supplements such as flaxseed oil and acidophilus, and more natural meat and poultry. They’re glad their stores carry Kiss My Face body care, Barbara’s Bakery cereals and Odwalla juices. If you carry these naturals categories, strengthen them. If you don’t carry them, this may be your next best area in which to build out your naturals assortment. Otherwise, you may be giving your customers a reason to take their whole shopping trip somewhere else.

Says Billy Alounevong of Providence, R.I., “I think it’s great if I can get both the natural and organic brands I like, along with all of the other stuff, under the same roof.”

In general, the naturals shoppers in our study who favor supermarkets estimate they devote about 34 percent of their total food budget to natural, organic and health products. This is somewhat less than the overall average of 42 percent in our study. Naturals buyers who prefer supermarkets report they are spending an average of $181 per month on all product categories in all distribution channels. About 77 percent are women, slightly higher than the 75 percent average for all categories. More than half of them are between the ages of 25 and 44. Most are married, and about 36 percent of them have one or more children, 18 years old or younger, living at home.

As more consumers become familiar with naturals product categories, and as those who are buying them deepen their involvement, all on the heels of a deeper awareness of the connection between food and health, it will make sense for grocery buyers to continue to expand their assortment in natural, organic and health products. Then these consumers won’t have a reason to take their wallets somewhere else.

Sidebars:
Spending profiles of “Albert’s shoppers” vs. “Bernard’s shoppers”

Sherwood Badger Smith is president of The Intelligence Agency, a marketing consultancy in Traverse City, Mich., that specializes in the natural products industry.