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3 data-backed insights into the shifting future of the natural products industry

state of the industry natural organic products 2020 covid-19
The annual, and now virtual, State and Future of Natural and Organic event is packed with up-to-date information about how the natural and organic products industry has been and will be impacted by the COVID-19 pandemic; tune in April 21 from 11 a.m. to 12 p.m. to watch.

Summing up the state of an industry, any industry, is never easy, and doing so during today’s COVID-19 crisis is particularly difficult. That’s the goal, however, for the annual State and Future of Natural and Organic digital event, scheduled for 11 a.m. to 12 p.m. Mountain Time on Tuesday, April 21.

The session, which is a virtual and greatly updated version of the annual state of the industry session that was planned for Natural Products Expo West in early March, will look at how the $230 billion natural and organic products industry performed in 2019, how the COVID-19 crisis has impacted industry sales and growth and what we might expect throughout 2020 and beyond based on short- and mid-term consumer behaviors in addition to macro forces and trends.

Joining me as presenters for this event are Nick McCoy, managing director of Whipstitch Capital, and Kathryn Peters, executive vice president of business development at SPINS.

We’ve designed this session to provide data-backed insights and takeaways to help natural and organic brands, retailers and distributors, suppliers, investors and others better understand the challenges and opportunities facing our industry today and in the future.

Below are three highlights from my portion of the event:

1. Growth was slowingand then COVID-19 hit

Natural and organic industry sales began to slow in every product category in 2019, according to estimates by New Hope Network’s Nutrition Business Journal. The slowdown, which was particularly pronounced in the food and beverage category, can be attributed mostly to increased saturation in the mass market retail channel.

Once consumers began stocking up in the face of COVID-19, many product categories began to see a boost in sales. You know about the stockpiling of toilet paper, hand sanitizers and bleach, but many food categories are faring well, including eggs, cheese, fresh fruits and vegetables, frozen meals and dietary supplements.

New Hope Network’s NEXT team worked with our partner Suzy to survey 1,000 U.S. consumers on March 30, 2020, and found that 36% reported that their use of supplements had increased compared to the previous month.

2. Innovation constraints, not changing consumer attitudes, are creating the greatest challenges

The consumer values that built and grow the natural and organic industry year after year appear to be holding strong, even in the face of COVID-19 and the resulting economic downturn, according to new consumer research conducted by the NEXT Data and Insights group via Suzy. That’s good news for the industry and for the brands that are bringing higher-quality, more nutrient-dense natural, organic and sustainable products to the market.

The not-so-good news for these companies, and the consumers and retailers they serve, is that a host of barriers—everything from supply-chain disruptions to a lack of new product development capacity at many contract manufacturing facilities to the dearth of investment capital flowing to companies right now—are stopping the flow of innovation, which we can expect to affect the offerings available to the marketplace later this year and into 2021.

3. Long-term opportunities could await the industry post-COVID-19

​​​​​​New NEXT consumer research also points to several potential long-term opportunities that could make natural and organic an even more important and sizeable component of the broader food and CPG system. Despite the COVID crisis—or perhaps because of it—people are prioritizing health and wellness and healthy eating and good nutrition are foundational components of how they say they will do more to proactively manage their health more in the future.

To a lesser, though still significant, extent consumers are reporting that they are paying more attention today to social and environmental issues such as addressing food waste than they did in 2019.

Register now for the State and Future of Natural & Organic digital event to get even more data-backed insights into where the industry is headed as the pandemic continues to shift consumer attitudes and affect the supply chain.

This digital event itself is free to attend, but we are encouraging anyone who can to make a donation to their local food bank or one of these organizations on the front lines of U.S. hunger relief:

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