Natural Foods Merchandiser

New Market Segment Turns On Sustainability and Social Consciousness

Are you happy with your market share? Even if you are, there's a bigger slice of the natural-products pie available if you want it. It's a group of 63 million U.S. adults who say they support companies that make sustainable products and espouse values that align with their own, such as fair trade, worker rights and children's welfare.

Though most areas of natural products sales have continued year-over-year growth, overall household penetration and usage is still relatively low. In fact, most industry research estimates natural foods purchases account for less than 3 percent of the total U.S. consumer food expenditures.

Understanding a subdivision of this untapped market—the LOHAS consumer category—could lead to new merchandising mixes, the chance to increase basket and sale size, differentiation in the natural products channel, and potential for increased incremental sales opportunities.

LOHAS Defined
The concept behind LOHAS, or Lifestyles of Health and Sustainability, is that five once-disparate industry segments—Sustainable Economy, Healthy Living, Alternative Healthcare, Personal Development and Ecological Lifestyles—share the common goal of selling consumers healthy and sustainable products and services. Together, the LOHAS market was valued at $230 billion in 2000 in the United States alone. Segment collaboration would allow environmentally minded and socially responsible companies to realize greater market penetration and ultimately provide more consumer choices.

Research released earlier this year by the Natural Marketing Institute and Natural Business Communications, publisher of the LOHAS Journal, identified a group of values-based consumers—the LOHAS Consumers—who represent 30 percent of the U.S. adult population and provide a deep new customer pool.

Called Understanding the LOHAS Market: Identifying the LOHAS Consumer and Business & Branding Opportunities, this 150-page report is based on a consumer analysis of 2,267 U.S. households concerning attitudes, behaviors and usage patterns across LOHAS-related goods and services. The report also includes a market-size analysis of the segments comprising the LOHAS marketplace.

Within this comprehensive project, consumers were segmented according to their attitudes and behaviors across a wide range of LOHAS criteria. The report identifies four major groups: LOHAS Consumers, Nomadics, Centrists and Indifferents (see "General Population LOHAS Consumer Segmentation", below).

Understanding the LOHAS Consumer could increase basket and sale size.
The LOHAS Consumers are most interesting to natural-products marketers. But a second group is also intriguing: the Nomadics, who comprise 38 percent of the general population, are the largest single consumer segment. These are consumers in search of a "sense of well being" but who have yet to join the LOHAS demographic. However, approximately 38 percent of Nomadics—30 million adults—appear to be LOHAS-leaning. This indicates a large-scale consumer movement toward the category. More than 100 variables were used to identify key characteristics of the LOHAS Consumer. Based on a variety of statistical tools and comprehensive analyses, the top 12 factors (1 = most important) used as predictive measures of the LOHAS Consumer include those in the facing table titled Defining LOHAS Characteristics. As a group, they are willing to teach family and friends about the benefits of environmentally friendly products. This fits with the finding that friends and family are an overwhelming influence on LOHAS Consumers in determining product purchases and could be the core of a targeted marketing campaign. Additionally, 26.6 percent of LOHAS Consumers are willing to pay up to 20 percent more for sustainable products.

Purchasing Patterns Reveal Opportunities
The research project also looked at the awareness levels and purchasing habits of these different groups of consumers, including why they did or did not buy certain healthy and sustainable products.

Let's look at two significant findings and the opportunities they represent for marketers.

More consumer education is needed, as well as less price disparity between organic and conventional foods.
First, consider Consumables, a category including natural and organic foods, cruelty-free personal care products, vitamins and minerals, eco-cleaning products and natural remedies, among others. This category is a gateway to LOHAS products for the vast majority of LOHAS Consumers. More than 92 percent are familiar with these products and services, and 48.4 percent indicated usage of Consumables overall—the highest of the four categories measured, which also include Durables, Health Care and Lifestyle.

Looking further at the data, an impressive 98.1 percent of LOHAS Consumers were aware of organic foods, but only 37.7 percent have used or purchased them. The results of a "reasons for non use" of organic products question make it clear that more consumer education is needed, and that the price disparity between organic and conventional foods needs to narrow.

The second significant finding in the Understanding the LOHAS Market report shows seven out of 10 goods and services most often purchased by LOHAS Consumers are typically sold by natural products retailers. The big takeaways for marketers in the Healthy Living segment are: the opportunity to expand their own offerings into other product areas, and to turn awareness of products into sales of goods such as videos, personal development and other lifestyle products.

Creative cross-promotions will attract customers already predisposed to purchasing. For example, research shows LOHAS Consumers have a 95.3 percent awareness level of products and services that make up the Lifestyle products category, but only a 24.1 percent usage level—near the lowest of usage rates among the four product categories.

There is no single answer as to why awareness hasn't translated into usage. But manufacturers can speed the conversion from awareness to usage by developing strategic solutions that reach into the new product categories, and by providing retailers with the tools to do it. The Gaiam/Whole Foods Market joint venture to place Gaiam Lifestyle kiosks in Whole Foods stores is one example of how this can work.

Understanding the market and consumer dynamics of the growing LOHAS market is vital to capitalizing on new opportunities.

Frank Lampe is editorial director of Natural Business Communications, a division of Conscious Media Inc., which publishes the LOHAS Journal and the LOHAS Journal Weekly. Steve French is managing partner of the Natural Marketing Institute, a leading health and wellness strategic consulting and market research firm.

For more information about the Understanding the LOHAS Market report, call 215.513.7300, ext 214, e-mail [email protected] or visit and click on "Research."

Natural Foods Merchandiser volume XXIII/number 10/p. 30, 32

Defining LOHAS Characteristics




Choose environmentally friendly products


Teach family/friends benefits of environmentally friendly products


Willing to pay 20 percent more for sustainably made products


Protect the environment


Prefer products manufactured in a sustainable manner


Choose sustainable-source products over conventional ones


Prefer products from recycled materials


Socially conscious


Purchase decisions based on effect on world


Choose renewable energy sources


Sustainable agriculture practices


Buy products from companies with values like my own

Natural Foods Merchandiser volume XXIII/number 10/p. 32

Top 10 Purchase/Use Products/Services of LOHAS Consumers

(% LOHAS consumers stating purchase or use of during the past three months)

Vitamins & Minerals


Prescription Medications


Natural Foods


Conventional Healthcare


Energy-Efficient Light Bulbs


Herbal Supplements


Organic Foods


Natural Remedies


Cruelty-Free Personal Care Products


Exercise Programs


Natural Foods Merchandiser volume XXIII/number 10/p. 32

General Population LOHAS Consumer Segmentation


38% (79 million adults)


30% (63 million adults)


25% (52 million adults)


7% (15 million adults)

LOHAS Consumers
Consumers whose attitudes, behaviors and use of goods and services are significantly affected by their health concerns—their families' health, the sustainability of the planet, their personal development and society's future.

Consumers in search of their true "sense of well-being." They tend to move from place to place according to personal ideals, environmental platforms and the overall relevance of sustainability.

Consumers who take the middle ground when it comes to dealing with health and sustainability. They are more steadfast in their attitudes, behavior and use of specific products and services—regardless of the impact on the planet and on themselves.

Consumers who see no need or recognize no connection between their consumption patterns and their effects on resources. They are caught up in day-to-day challenges and not necessarily looking out for tomorrow.

Natural Foods Merchandiser volume XXIII/number 10/p. 32

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