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Monitor: Growing natural products industry trends

Walking the "aisles" of the "digital showscape" before and after they happen reveals natural product industry trends.

Natural Products Industry Health Monitor, Aug. 7, 2020
 
A global lockdown might make weeks feel like months and months weigh like centuries, but business allows little room for ennui. As distracting as the daily inundation of the negative can be, the time to look forward is always now. In this feature, Informa Health and Nutrition sister properties provide that right-now-right-here update. Look for the Industry Health Monitor every other Friday to learn the major news that is affecting the natural products market immediately and the less obvious insights that could dictate where the market may struggle or thrive in the months to come.
 

It turns out the pandemic has not turned all of us into urban/suburban homesteaders who grow our own food, bake our own bread and brew kombucha in the carport. We’re still buying packaged goods. Or at least the brands signing up for the Natural Products Expo Spark Change virtual event think we are.

Developing products, marketing products and planning product cycles for the future has not stopped. And we can get an idea of what the other side of the pandemic might look like for the natural products industry by examining the makeup of products that were set to exhibit at Expo East and could show at the virtual Spark Change conference and trade show.

Consider this

We’re not going to give away all the answers about hot products waiting to be discovered. But sitting at a month ahead of the event we already have some of the takeaways.

Fittingly perhaps, “multistakeholder” designations experienced the largest increase in brand callouts. These are brands with missions, standards and benchmarks intended to help the environment, workers, suppliers, consumer and other populations touched in the production and consumption cycle. Certified B Corp is probably the most widely known and well respected callout here.

The number of exhibitors positioning against the multistakeholder trend grew the strongest from Expo East 2019 compared with what would have been exhibiting at Expo East 2020. 

Of the nearly 1,400 finished goods exhibitors that register for Expo East each year, about 40% are curated as on-trend, innovative trailblazers that stand out in a crowded marketplace. From this 40%, or about 600 exhibitors, these charts show some of the highest growth trends based on volume increase of number of exhibitors positioning against that trend (growth chart) since Expo East 2019 and simply the biggest trends unfolding at Expo East 2020 based on number of exhibitors aligning with that trend (top trends by highest volume chart below). 

Similar in intent to the multistakeholder claims, the next biggest growth of consumer callouts is sourcing responsibly. These are brands that explain where they get their ingredients, how they are produced and what standards are in place to make sure it’s all done well. The number of brands making responsible sourcing a focus grew by 62%.

The trend toward eating more plants shows no signs of slowing. With the work-from-home legions taking up gardening—in addition to baking and, who knows, maybe quilting—the power of the plant has plenty of room to grow, but the change from 2019 to 2020 is already a substantial 39% growth for exhibitors grouped in the “eat more plants” designation.

CBD has the ring of a relic at this point, but while industry attention has shifted to more dire developments, brands in the space are not giving up on the endocannabinoid dream. Just when you thought there couldn’t be another CBD product, the number of exhibitors making endocannabinoid claims climbed 26%.

Protein also proves far from ready to plateau. The craze is well into its growth cycle, but exhibitors in the “more protein please” group increased by 24%.

 

Natural Products Industry Health Monitor indexes

Consumer behavior indexes measure consumer behaviors through weekly or twice-monthly surveys that are compared to a 2017 benchmark before COVID-19 emerged to see how the novel coronavirus is changing consumers. Behaviors seeking ethically, environmentally and responsibly made products reflected in the eco-social index and behaviors seeking high-quality ingredients, nutrient density, transparency, and natural products reflected in the nutritional quality index have taken some dips and turns since March, but all of these behaviors seeking products with nutritional quality and eco-social values are higher than 2017 figures and show equal importance to consumers. Innovators and brands should note that consumers have a lot on their mind as they prioritize which products to purchase.

Taking a deeper look into the four measures that roll up into the eco-social consumer behavior index, consumers have been showing increasing interest in environmental and socially responsible practices. That’s unsurprising because this pandemic and stressors linked to current events have certainly exposed and amplified the social and environmental abuses that support the global economy and supply chains. Pair this with social and environmental trends that were set to make a big splash before COVID-19 torpedoed through our everyday lives, and innovation for good is primed to be the path toward transformation and connecting with consumers.
 

Natural products industry engagement index tracks social and mass media engagement of the top 50 trends defining and shaping the natural products industry. The index tracks weekly keyword engagement of these top trends that are compared to a Q4 2019 weekly average benchmark before COVID-19 emerged. With five months of tracking since the outbreak of COVID-19 in the United States, consumers are engaging with these top trends, reflected in the total mentions index, more compared to the 2019 benchmark scores. However, sentiment and attitudes around these trends, reflected in the net sentiment index, show that consumer emotions for these trends are lower than benchmark scores.

Nutrition Capital Network tracks financial activity in the natural products industry. While investment activity shows weekly dips and spikes it’s clear that there is still interest in supporting and investing in the natural products and health and wellness industry.

Listen to this

Plant ahead. The IFT Annual Meeting and Food Expo played out in the digital realm last month and Food and Beverage Insider shared its take on the trends in a podcast. Among the most interesting takeaways was Assistant Editor Alex Smolokoff’s observation that plant-based doesn’t have to mean alternatives to meat and dairy. "There were plenty of products that were not necessarily substituting for meat, but that were still offering a healthier alternative to a familiar product. One of those was AGT Foods VeggiCrumb, which was sort of like a breadcrumb mixture, but it was made entirely from dried peas,” Smolokoff says.

Whiteboard wipeout. At Naturally Chicago webinar in June, Eat the Change founder Seth Goldman offered a blanket takeaway on the current business climate for brand builders. In a report for newhope.com, Goldman was quoted saying, "The first thing I tell entrepreneurs I work with is whatever business plan you had in January, just rip it up. It's irrelevant. You're trying to build a business in a world that no longer exists and is not going to exist. It's gone. It is a different world right now, and it's not going to be the way it was before."

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Sounds about right …

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