Natural Foods Merchandiser

Market Overview: Sales top $51 billion

Natural products sales in the United States grew 9.1 percent across all retail and direct-to-consumer sales channels in 2005, reaching $51.39 billion in total sales. Most sales—80.9 percent—came from the natural retailing and mass-market channels. For the first time since 1999, natural products retailers saw double-digit growth at 10.9 percent for $25.5 billion in sales. Natural products retailers outpaced all other channels but the Internet, which had 17.7 percent growth and reached $558 million in sales. Mass-market (food, drug, mass merchandisers, club and convenience stores) sales grew 8.0 percent; direct-to-consumer sales rose 6.4 percent.

As it has since 2000 when The Natural Foods Merchandiser started reporting 'supernaturals' sales, Whole Foods Market led chain sales with growth of 22.4 percent and sales of $5.03 billion. Wild Oats' 2005 growth was 7.3 percent to $1.12 billion in sales. GNC saw sales decline 15.3 percent in 2005, down 15.3 percent to $1.37 billion.

In this year's market overview, the number of "other" retail outlets that sell natural and organic products (18,300) has grown significantly from the published number (4,014) in 2004. These specialty retail outlets—gourmet food retailers, personal care stores, health clubs, herb shops, mall stands and gift shops—were responsible for more than $2.1 billion in sales of natural and organic products.

In natural products stores, food sales grew 12.1 percent, and all food categories tracked by NFM had double-digit growth except nutrition bars. Organic food sales grew 15.7 percent. Supplements sales rose 8.2 percent and natural personal care/other sales increased 12.7 percent.

Natural products retailers saw organic fresh meat and seafood sales grow 67.4 percent in 2005 to $114 million. Organic nutrition bars, beer and wine, other beverages and foodservice all posted growth of more than 30 percent. Organic pet products grew 37.5 percent to $65 million.

Specialty supplements (such as Ayurvedic supplements, glucosamine and essential fatty acids) grew 13.6 percent for $988 million in sales. Homeopathy also posted double-digit growth at 11.5 percent. Sales were $244 million.

The largest sales categories in natural products stores were vitamins, $3.1 billion; produce, $2.97 billion; packaged grocery, $2.48 billion; and personal care, $2.35 billion. Organic produce sales in natural products stores were worth $2.14 billion followed by organic packaged grocery at $1.36 billion.

Click here to order a copy of Market Overview 2005.

Natural Foods Merchandiser volume XXVII/number 6/p. 1

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