Natural Foods Merchandiser

Organic, Mass Trends Commingle

The organic and natural foods industry constitutes roughly 1 percent of the total food world. But when it comes to trends, natural and mainstream markets aren't as independent as they once were. As the organic and natural segment has grown, it shapes some of the trends on the fringes of the mass market, giving angles for innovation to that group. And as an industry that draws its new consumers from shoppers eschewing conventional foods, the natural and organic foods industry must pay heed to food trends that drive the broader business markets.

Convenience is and has been the mantra of the food world for some time. Consumers are time-starved for a variety of reasons, and they demand products that allow them to nourish their bodies without giving up their other myriad priorities. Grocery shelves are invaded daily by new ready-to-eat products, which traditionally were purchased ingredient by ingredient and assembled at home.

"This is likely still the biggest food trend," says David Gauger of the San Francisco-based advertising agency Gauger and Silva. "And it's a trend where naturals have followed conventional."

Meals to go, whether refrigerated, frozen or prepared in the deli; single-serving packages; and pre-cut produce are just as evident in the natural products world as is in the mainstream. Gauger says this me-too approach, while attracting crossover consumers, has stifled some of the creativity in the industry. "Look for the market leader in mass and then try to clean up the product so it's acceptable to natural," he says. "That's a philosophy many manufacturers [in the industry] have embraced."

But though the marketing of organic and natural foods tends to skew toward the more upscale consumer, and these are the folks who drive consumer demand for convenience, according to Adam DeVito, managing director with the Sterling-Rice Group in Boulder, Colo., convenience is past the trend stage. Most companies don't focus on the convenience aspect of new-product introductions; it's a condition of doing business.

"It's really an ante; it's a cost of entry into virtually every category of the store," DeVito says. "And those [manufacturers] that try to differentiate on convenience alone won't have a sustainable competitive advantage."

In fact, control movements to the convenience trend are emerging, and the organic and natural foods industry is fertile ground for some of them. Many consumers are looking to take more control of their lives, DeVito says, and preparing food, from scratch or close to it, with family and friends, gives them a sense of comfort.

Further, according to Mary Mulry, owner of the Hygiene, Colo.-based consultancy Foodwise, somewhere down the line, the trend toward convenience will fly in the face of our country's growing environmental responsibility, and consumers will have a choice to make. This will be more evident among dedicated natural products shoppers, often called "green" consumers.

There are other trends making waves in the mass market that have roots in the natural world. Wellness is the new watchword for mainstream companies. An attribute that connotes health and vitality and implies self-control, "wellness" is being attached to new-product launches in this country and abroad. In Europe, Nestle has launched a line of fortified candies called Wellness Lollies.

The conventional industry mines niche markets for trends, so it doesn't surprise Mulry to see them appropriate a characteristic of the organics and naturals industry into a new trend. But she points out that those companies' commitments to wellness rarely run beyond the surface. For example, they might include soy protein in a sports drink, but they'll use artificial fillers and flavoring to make it taste like the products to which conventional shoppers are accustomed. True naturals shoppers will see the forest through the trees, and the mass industry's fascination with the word should encourage more crossover shoppers to seek wellness as a lifestyle, not just label copy, Mulry says.

Mainstream food trend watchers have decided that 2002 will be the year of the consumer, and this is another trend with roots close to home for organics and naturals businesses. "That's one trend that's definitely going the other direction," Gauger says.

Phil Lempert, known in the advertising and marketing industries as the Supermarket Guru, says that in 2002 consumers will expect to be "visibly" acknowledged and will demand companies provide top-of-the-line customer service, along with products and services that fit their busy lifestyles and needs. He says marketers and advertisers will take a different approach in their messages, using terms like "community," "partnerships," and "belonging" to build brand loyalty.

The empathetic approach has been a marketing tactic that naturals have always employed. "Maybe now, with the changes in the world [post Sept. 11 terrorist attacks], creating that emotional bond with the consumer is something the big food companies will look to establish," Gauger says.

Part of this emphasis on the consumer will manifest itself in products that have local or regional appeal. Eating is a ritual central to a sense of well-being. Knowing that something was produced locally will simultaneously provide consumers with intangible warm, fuzzy feelings while helping alleviate their fears about the chances of a poisoned global food supply.

Some experts believe the appeal of products marketed as local or small-batch boutique was emerging before the attacks on New York and Washington, D.C., but it has picked up speed, and DeVito says mass companies will move quickly on this food trend. "Mainstream is at risk of being negatively positioned in regard to one of the predominant values of the population," DeVito says. "And they move quickly when faced with eroding market share."

Fears of food safety might also propel increased demand for organic brands. "Organic and non-GE foods continue to be a huge trend," Mulry says. "Companies that are partially or nonorganic continue to look there as a point of difference."

New-product introductions that target niche markets within the industry will likely be another noticeable trend. Whole Foods Market of Austin, Texas, has a private-label line called Whole Kids. And the general population's marked obesity problem has made adult-onset diabetes a growing problem, and one at which products will undoubtedly be targeted. "In the past, all of those products failed," Gauger says. "Basically because the natural products marketplace was so small to start off with, compared to mainstream, if the product was too niche focused, there wasn't a big enough market to make the business viable."

Not anymore. Organic and natural foods aren't an anomaly, and its industry isn't isolated. The attitudes that shape food trends here are felt across broader populations, and the food trends talked about in USA Today are now research imperatives for organic R&D departments.

Natural Foods Merchandiser volume XXIII/number 1/p. 24, 26

Tracking Food Trends For The Year Ahead

It didn't happen at the turn of the millennium, and it wasn't an overnight occurrence, but the attitudes of American shoppers are changing, and the shifting priorities have been described as tectonic. Below is a list of food trends NFM has noticed in the mainstream world as well as the in organics and naturals industry.

  • Experience and value brands will see a surge. Consumers are pulling back from the rat race, and there is claustrophobia of abundance among the nation's upper and upper-middle classes. It's not quite the 1960s, but expect to see an increase in consumer idealism. Companies with sincere passion and integrity will find markets for their products among like-minded consumers. Not just altruism or "5 percent" days, but appreciable integrity will bring abundant brand loyalty to some companies.

  • Comfort foods are back in vogue. In the wake of Sept. 11, many consumers will look for more intimate relationships in all areas of their lives, including food. Dishes that remind them of childhood might replace the more exotic items that adventurous palates brought to the forefront in recent years.

  • With nearly 40 million children between the ages of five and 14, and another 14 million in high school, American kids will be playing a key role in the shopping patterns of families.

  • Food talk is on the rise. Witness the popularity of television networks dedicated entirely to food, the propagation of food magazines and the emergence of celebrity chefs. Even if they don't act on it, consumers are learning a lot more about preparing fresh foods from scratch.

  • The merger of organic and gourmet will continue. More brands from the gourmet realm will enter this industry, with celebrity chefs and their lines of cuisine leading the way.

  • It's all about balance. Gone are the days of obsessive avoidance of things like fat, carbohydrates or red meat. Most consumers want a little bit of everything.

  • Pantry loading is the boutique term for what will happen every time there's a new terrorist threat.

  • A polite price war among high-end restaurants could very easily translate into a reverse gold rush, because consumers will be more frugal with their restaurant dollars and spend more on items they can prepare at home.

  • Food is medicine. The Food Marketing Institute and Rodale's Prevention magazine conducted a study and found that 58 percent of U.S. consumers believe they can reduce the risk of disease through diet and 76 percent believe it is better to influence health through food than medicine.

  • Another trend from the restaurant world has more to do with portions than flavor. "Appetizers" are becoming harder and harder to spot. Pick up the menu in a lot of new restaurants and instead see "small plates," "little dishes to share" or "tapas," regardless of the restaurant's ethnic persuasion. Rather than one or two big courses, chefs are encouraging restaurant goers to try a bunch of smaller ones—playing up to the appetite for exploration, wariness to commit and the increased popularity of sharing among dinner companions.

  • Nearly nine in 10 mainstream shoppers said they had purchased store-brand/private-label products in the past month, and more than half think the quality of store brand products is about the same as that of branded products.

  • A myth about men begins to be debunked. A whopping four out of five men (79.4 percent) have gone grocery shopping alone in the past four weeks, up from 74.3 percent in 1998. Most men (72.7 percent) rate their supermarket shopping skills as "average," 16.2 percent consider themselves "savvy" shoppers, and only 38.4 percent said, "I buy whatever brand my wife tells me to."

  • Many of the changes in consumer attitudes since the terrorist attacks of Sept. 11 have been in line with the values of the natural and organic foods industry. But there's one notable exception. A year ago, the use of irradiation to kill microbes on food without recognizable labeling was opposed by more than 80 percent of the population, says Adam DeVito with the Sterling Rice Group in Boulder, Colo. But food safety fears have people warming up to nuclear treatment, and in a recent poll, fewer than half the consumers asked now oppose the process.

Natural Foods Merchandiser volume XXIII/number 1/p. 28

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