Natural Foods Merchandiser

3 trends driving natural retail success

Even with positive growth rates, competition has distracted independent natural products retailers in recent years as they have watched Whole Foods Market and larger naturals take on secondary markets, and Kroger and other conventionals awaken to natural as the new normal.

The year 2014 marked the first time Americans bought more natural products from those big stores than from the independents who founded this industry. The shift has happened. And with it, we noticed an apparent mind shift as we spoke to retailers for Natural Foods Merchandiser’s 2016 Market Overview Survey.

Growth for independents hit 6.3 percent in 2015, the worst growth rate in a decade. Flat became the norm for many as 21 percent experienced no growth nor declines. Yet retailers we talked to for this year’s report seemed more positive about the power to change than stuck in the powerlessness of the competitive swell.

What’s exciting them? Supplements. Foodservice, deli and grab and go. Meat and produce. And the still-growing focus on local. Natural foods leaders are serving changing customer needs.

Here are three retail trends driving success:

Simply convenient. The rise of convenience continues, but for natural products retailers this consumer trend isn’t just about snackification. It means making the shopping experience easier and offering food conveniences, too. Are staff available to assist customers? Are you offering easy-to-reach grab-and-go options for breakfast, lunch and dinner? Are products that make meal prep fast and easy merchandised optimally? Consider making your customers’ lives easier and they will reward you.

Rethink the aisles. With the growing focus on fresh, packaged fresh, ready-to-drink beverages, snacking and prepared foods, it’s time to rethink the aisles and sets. Sprouts Farmers Market may be leading the way as it puts produce in the center of the store in a big way. Others are increasing focus on food bars and fast casual dining options. It’s working in the restaurant business. As a natural foods grocer, consider what you can borrow from the fast casual dining sector.

Community not commodity. Sure, the local food movement has been a key driver for natural products retail. But like so many things about the growing natural industry, big is copying small. The new local is not just about the food, but the community it grows. Think of local grain economies, food hubs, Slow Money and cottage industries. Such support pushes a store beyond a commodity market to a community market worth supporting.

Find out how retailers like Kevin Cotter of New Earth Market, David Rand of Local Foods and Lisa Malmorowski of Outpost Natural Foods are tapping these trends and finding success in our Market Overview analysis.

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