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Articles from 2018 In November


[email protected]: Unilever names new CEO | Whole Foods launches DIY almond milk

5@5: Unilever names new CEO | Whole Foods launches DIY almond milk

Unilever names new CEO as big brands regroup, tackling consumer shift

Unilever has appointed Alan Jope, who currently heads the company’s beauty and personal care division, as the replacement for longtime CEO Paul Polman. This move indicates a turning away from the slow-growth food category and toward the more lucrative category of personal care and beauty. Polman was notably a divisive figure, often riling up shareholders “by appearing to spend more time thinking about global sustainability issues than Unilever’s performance,” leading some to worry that this new shift in management will come with a corresponding shift in the company’s ethics.  Read more at The Wall Street Journal ...

 

DIY vegan almond milk machines arrive at Whole Foods

 

The NüMilk nut milk machine is making it possible for customers in select Whole Foods locations to obtain freshly made, organic almond milk. Being a raw product, NüMilk’s machine produces a beverage free from additives such as gums and emulsifiers that are rampant in many alternative milk brands. Read more at Live Kindly  …

 

Keyto raises $2.5M, launches crowdfunding campaign for ketogenic diet device

Ketogenic diet-adjacent company Keyto has raised $2.5 million and launched an Indiegogo campaign to fund its Keyto breath analyzer and the accompanying app. The breath analyzer is able to measure the amount of acetone in an exhale and then communicate that information to the app, which reports to users their current level of ketosis as well as specialized food and meal recommendations to help them reach their health goals. Read more at The Spoon 

 

How wellness influencers made Indian food a trend

Once a niche, “gut-busting” takeout option, now a trend that thousands of (mostly white and wealthy) health-centric Instagram accounts take pride in posting about—Indian food and Ayurvedic principles have become embedded in the mainstream. How did it all happen, and how can we best deal with topics of ownership and appropriation in this new trend? Read to find out. Read more at Bon Appetit …

 

Beyond bodega bites: This man wants more people to eat ‘vegan in the hood’

The creator of popular Instagram account How To Be Vegan in the Hood, Erick Castro, is a vegan foodie who is spreading the gospel of affordable health food. Castro grew up feeling lucky to have food on the table, and gave little thought to nutrition until thoughts about his future health caused him to make the switch to plant-based as a young adult. He began the account to prove that being vegan doesn’t mean giving up delicious food; in fact, it can open culinary doors you never knew existed. Read more at NPR …

We’re so over these 2018 food and beverage trends

Getty Unicorn food

If you’re an avid reader of this website, you likely know that we often explore food and beverage trends. We write about what’s happening now in the natural products industry, and also what trends are shimmering beyond the horizon, just about to rise.

With 2018 soon ending, it’s prime time to ponder food and beverage trends popular this year that are—or, in my opinion, should be—in the sunset of their lives. These are the trends that don’t seem to propel our industry forward in meaningful, inspiring ways or set us up for a better food system or improved environmental stewardship.

So put on your grumpy pants, it’s time to embrace your inner curmudgeon.

I’m over it: Permissible indulgence

I know, I know: We all love permissible snacking products. They’re booming in sales, and sure, if I’m going to eat a chocolate-covered almond, it might as well be made with fair trade, organic dark chocolate that’s dusted with functional reishi mushroom.

But the problem with permissible indulgence is that I—and many friends I unscientifically surveyed (which means I inquired, "Do you gorge on low-calorie cookies like I do?")—give myself too much permission with these products, resulting in a net health negative instead of a net health positive. For example, take your average low-calorie, high-protein ice cream alternative. Many brands depict on the front of the package the calorie count for the entire pint—a tactic that I personally believe encourages overconsumption of sweets.

I would rather have one serving (usually ¼ cup) of the most decadent, high-quality, consciously sourced ice cream around. I would savor every single bite, and I would feel so satisfied that I wouldn’t even want another scoop.

I’m over it: Squeeze packs

The portability and convenience of squeeze packs are hard to resist. Whether they contain nut butters or organic fruit and veggie purees, this relatively new type of package has in the past few years exploded in popularity across categories. From soups and sauces to snacks and even cat food (a delectable puree of chicken and tuna that your feline loves!), squeeze packs have largely replaced traditional glass, aluminum and even PET packages.

The problem, of course, is that squeeze packs aren’t easily recyclable—they’re made out of several layers of glued-together plastics and aluminum that cannot be placed in your blue bin. While some companies establish unique partnerships with recycling organizations such as TerraCycle (where users must mail-in their empty squeeze packs to be recycled), adoption rates for these types of programs are historically low. It’s not unreasonable to say that most squeeze packs end up in the landfill.

The good news: Many stakeholders in the natural products industry are actively working to find compostable alternatives. The bad news: In the meantime, squeeze packs are as popular as ever. Hopefully, 2019 will serve as a turning point for squeeze pack innovation.

I’m over it: “Unicorn food,” and other dishes made specifically for Instagram

Search for the tag “unicorn food” on Instagram and you’ll be rewarded with thousands of rainbow-tinted toasts, gorgeous multilayered smoothies featuring kaleidoscope designs constructed from nuts, seeds and frozen berries and psychedelic swirls of pastel frosting. Many of these crazy colors are tinted by natural ingredients, such as spirulina, turmeric and beetroot, and are made out of healthful fruits, veggies, non-dairy milks and protein powders.

Crazy-colored, meticulously crafted foods aren’t bad—they’re entertaining; they’re art. But their existence does start to feel like following a healthy diet takes a TON of work, when in reality it doesn’t. I want to see more Instagram influencers crafting ultra-healthy meals the way I—and I imagine a lot of busy consumers—actually cook: by throwing whatever we have in our fridge onto a sheet pan or in the cast iron and placing it atop a bed of organic salad greens. Voila, dinner. Or at least teach me how to make a delicious smoothie without making me feel bad that I threw some granola on top of it and called it a day.

I’m over it: Grain phobia

The paleo and keto movements are linked by a strong opposition to eating grains. Paleo argues that our paleolithic brethren 10,000 years ago didn’t consume grains because modern agriculture was not yet adopted; keto suggests that eating grains prevents your body from achieving ketosis—a metabolic process that uses fat instead of glycogen for fuel.

I’m not at all advocating that grain-free products go away—in fact, they’re continuously getting more delicious and texturally better every month. I love grain-free alternatives.

But–I think that paleo and keto diets, however, are missing out on the myriad benefits of nutrient-dense, intact heritage grains. Heavily refined, milled and bleached white wheat is worth eschewing. But I would like more Americans to embrace the bounty of ancient sorghum, barley, emmer, Khorasan wheat, teff, quinoa and more for their high-quality protein, essential minerals and vitamins and their resiliency against climate change.

Natural Products Expo West

Chef Megan Mitchell to create organic menu for The Organic Center benefit dinner

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Chef and internet personality Megan Mitchell will work her magic with organic ingredients supplied by sponsors to create a delicious custom organic dinner on March 6 at The Organic Center's 16th Annual Benefit Dinner in Anaheim, California.  

Held in conjunction with Natural Products Expo West, the annual dinner is the single biggest fundraising event for The Organic Center. It brings together hundreds of organic visionaries, activists and businesses to enjoy an all-organic feast and spotlight the latest science on the environmental and health benefits of organic food and farming.Megan Mitchell pasta 400x400.jpg

Widely celebrated as a chef and host, Mitchell has worked with the Food Network, the Cooking Channel and the dgital network Tastemade.

“We are delighted to have Chef Megan Mitchell on board to design our menu and create appealing and nourishing organic dishes to satisfy your appetite,” Jessica Shade, director of science programs at The Organic Center, said in a released statement.

“Alongside The Organic Center, I look forward to an amazing evening where all parts of this great community come together authentically to celebrate and raise funds for this important organization. I'm excited to toast new friends and share my commitment to organic food with those in attendance,” Mitchell said.

The evening's program will feature keynote speaker Shannon Allen, creator and owner of the thriving all-organic fast-food restaurant chain Grown. The flagship Grown opened two years ago along a busy stretch of highway in South Florida. The concept has expanded to six operations: Wesleyan University, three sports arenas and inside a Walmart Supercenter in Orlando. The locations provide freshly prepared, nutrient-dense breakfast, lunch and dinner menus using strictly 100 percent certified organic ingredients.

“The Organic Center's fundraiser is always a special event because of the chef we and our keynote speaker who is able to make real the importance of research and consumer education to promote the value of organic and the work we do,” Shade said.

Event sponsors, such as those listed here, donate organic products and ingredients for the menu: Grown, New Hope Network, General Mills, Honest Tea, Organic Valley, Whole Foods Market, Braga Fresh Family Farms, Josie's Organics, Driscoll's, Frontier Co-op, Gallant, International Inc., Independent Natural Food Retailers Association, Once Upon a Farm, Patagonia Provisions, Simply Organic and Urban Remedy.

Companies interested in sponsoring the dinner should contact Cassandra Christine at [email protected]. To be included in the menu, the deadline for sponsorship is Jan. 18.

Individual tickets will go on sale in January.

 

Source:The Organic Center

Sprouts Farmers Market, Inc. announces leadership change

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Sprouts Farmers Market, Inc. today announced that Amin Maredia, the Company’s chief executive officer and member of the board of directors, will transition away from the Company on December 30, 2018 to pursue other interests. Jim Nielsen, the Company’s president and chief operating officer, and Brad Lukow, the Company’s chief financial officer, will serve as the Company’s co-interim chief executive officers until a permanent successor has been named. The Company is in the process of engaging a leading executive search firm to conduct a comprehensive search for a new chief executive officer. Mr. Maredia will remain available for a period of time in an advisory role to assist with the transition.

“On behalf of the board of directors, I would like to express our gratitude to Amin for his many years of service to Sprouts,” said Joseph Fortunato, chairman of the board. “Over the past three years, Amin has overseen our tremendous growth from coast to coast and put us on a firm footing for continued success. We wish Amin all the best in his future endeavors. While we search for a new CEO, the Board has deep confidence in Jim and Brad to continue executing the Company’s strategic initiatives, driving shareholder value and delivering on our mission of ‘Healthy Living for Less.’”

“It has been an enormous privilege to have been part of the Sprouts team during this incredible period in the company’s history over the past eight years,” said Maredia. “As I transition, it is comforting knowing that Sprouts is well-positioned with a strong management team for robust growth and sustained success.”

Mr. Nielsen joined the Company in April 2011 as its chief operating officer and has served as the Company’s president and chief operating officer since August 2015. Prior to that, Mr. Nielsen served as President of Henry’s Farmers Markets from 2007 through April 2011. Mr. Lukow has served as the Company’s chief financial officer since March 2016, having previously served as executive vice president and chief financial officer of Shoppers Drug Mart, Canada’s leading drug store retailer, from 2009 to 2014.

Kraft Heinz signs definitive agreement to acquire Primal Kitchen

Primal Kitchen primal kitchen.jpg

The Kraft Heinz Company announced today that it has entered into a definitive agreement to acquire Primal Nutrition, LLC, makers of Primal Kitchen branded products for approximately $200 million.

Founded by Mark Sisson and Morgan Buehler, Primal Kitchen is a young, vibrant, better-for-you brand primarily focused on Condiments, Sauces and Dressings including Mayonnaise, Salad Dressings and Avocado Oil, with growing product lines in Healthy Snacks and other categories. The brand holds leading positions in both e-commerce and natural channels, and is expected to generate approximately $50 million in net sales this year.

Primal Kitchen will join Kraft Heinz under Springboard, which is Kraft Heinz’s dynamic platform created to partner with founders and brands that will disrupt the food industry. The combination of Primal Kitchen and Springboard will help to realize Mark Sisson’s vision to change the way the world eats.

Primal Kitchen will leverage Kraft Heinz’s assets and infrastructure, while still operating as an autonomous company. Primal Kitchen will continue to be led by its current leadership team. Its headquarters will remain in Oxnard, California.

“The proposed partnership with Primal Kitchen is consistent with Kraft Heinz’s vision to be the best food company, growing a better world. The Primal Kitchen team has built an amazing portfolio of the world’s best-tasting, health-enhancing, real-food pantry staples,” said Paulo Basilio, U.S. Zone President for Kraft Heinz. “Primal Kitchen is an authentic, premium and growing brand that fits perfectly with our core Condiments & Sauces categories, and we are excited to partner with the Company’s strong existing team to drive growth across multiple categories going forward.”

Mark Sisson, Co-Founder of Primal Kitchen said, “My mission has always been to change the way the world eats. With that goal in mind, Primal Kitchen launched in 2015 to offer health-conscious consumers the best possible choices in Condiments, Sauces, Dressings and Healthy Snacks. While our growth to date has exceeded all industry standards and expectations, our partnership with an industry leader like Kraft Heinz now offers an unrivaled opportunity to reach millions more of the consumers who have been seeking products like ours for years. Based on the significant time I've spent with the Kraft Heinz team, we share a common vision regarding the future of food and the importance of consumer choices. I look forward to working with them to grow this amazing brand."

The transaction is subject to customary closing conditions and is expected to be completed in early 2019. Terms of the agreement were not disclosed.

Source: Business Wire

NBJ

Inside Game: The dark side of sports nutrition

Sports nutrition female lifter

I remember the moment when the schizophrenic nature of supplements industry became clear to me. I’d spent most my adult life in that industry, preach­ing the promise of better health in nutri­tion. I believed in the products. I still do. But in that moment of clarity, I came to question so much of what I’d held as the central mission of the trade.

I was standing in a retail store, a chain that focused on supplements. On one side of the store, I looked out on a wall of shelves, packed with the ingre­dients I could believe in: products de­veloped, produced and sold to improve health, create a lifestyle of health.

On the other side of the store, I saw something very different. There I saw tubs of powders and bottles of pills that I could only call “anti-health.” The labels bore the ripped physiques of bodybuilders I knew were drenched in steroids and illegal drugs. The marketing made claims I knew were impossibly and irresponsibly bold. This was the spectacle of sports nutrition.

And it made me sick.

It was also my job. It was how I earned a paycheck.

Until I walked away.

Before that happened, before I left to launch a cleaner venture, I saw things that were surely questionable and sometimes criminal. I saw protein spiking, flagrant disregard for potency and purity, principles surrendered to profit. In short, I saw bottom feeders doing anything for the bottom line.

And no matter how I protested, I was one of them. I can’t defend that. I looked from one side of the store to the other and I kept doing my job, not forever but for too long.

Criminal proceedings

I remember an executive bragging about spiking protein powder with tyrosine. They laughed about fooling the tests. They won contracts based on price, and anything to get to that price was acceptable.

I saw companies ignore microbial test­ing procedures in the rush to fill orders and win more contracts. Shelf life testing took time, and time, in their minds, cost money. They looked at testing as spending money and not making money. They’d boost the preservatives and hope for the best.

Claims were another point where economics won out over ethics too many times. These were companies that hired legal and regulatory teams, examined their recommendations, and then ig­nored them. I saw it over and over again. They knew they could double their sales if they crossed the lines, and they knew the penalties would be light and long-in-coming. I saw companies that knew how to time the enforcement cycle and be ready to close up shop when the FTC and FDA started sniffing around. I re­member one outfit that burned through a half dozen companies with the same product and the same claims.

That was their built-in business strategy.

Bold and brazen

In some cases, it went beyond cred­ibility and defied simple math. A label would declare 120 grams of amino acids that somehow fit into 100 grams of pro­tein. It was ridiculous, but it showed how seriously they took the rules and the basic responsibilities of commerce.

And then there was the outright crim­inality. I never saw it first hand, but it obvious to anybody who has glanced at the sport nutrition shelves that the prod­ucts are either intentionally tainted with steroids and other drugs or they are im­plying illegality with marketing that more than winks at an illicit allure. Peo­ple bragged to me. They would say their product had “the real stuff” in it and they would justify it with the “everybody’s do­ing it” defense. They would claim they’d discovered a steroid that “nobody knows about” and talk about winning a scientific arms race with the FDA.

I didn’t want to be part of that race. I didn’t want to be part of any of it. I’d argued with the decisions I thought were wrong and I’d lost jobs over it. I didn’t want to sur­render my integrity for another paycheck. I didn’t want to be part of the problem.

I remember my wife telling me to stop trying to change people who didn’t want to change.

So I walked away.

A different path

I have my own company now. I don’t pay steroid injecting bodybuilders to flex on my labels. I have worked at companies that spent more on marketing than product. We barely have a marketing budget. We’re not selling ripped abs and bulging biceps. We’re selling health.

We buy branded ingredients from companies I trust. We don’t piggyback on the science with ingredients that haven’t been studied. It’s more expensive. It cuts into the margins, but it doesn’t cut into our integrity. We are giving the custom­ers what they want: health. If they want shortcuts and steroids there are other places to find them. They can find them in some other part of the store, the darker corners that I hope will shrink over time as customers, especially millennials, get more educated and demand more trans­parency and more responsibility.

I’m not proud of the places I saw our industry go or my steps on those dark paths.

But I’m hopeful about where it could go next.


This article is republished from the “Dark Issue” of the Nutrition Business Journal, a subscribers-only chronicle of the latest sales and trend data matched to expert insight from insider voices in the nutrition industry. For information on purchasing subscriptions, market reports and data charts at end-of-the-year discounts, go to www.nutritionbusinessjournal.com or contact NBJ Business Development Manager Cindy Van Schouwen at  [email protected] (303) 998-9305.

NBJ

Why new brands need both e-commerce and retail strategies

Thinkstock grocery shopping online

Why bust your butt and drain your funds trying to get into Whole Foods Market when you can launch your new natural product online? New companies no longer need to rely on the longtime kingmaker for their big break. In fact, they can bypass brick-and-mortar retail altogether—and the headaches, heartaches and wallet-bleeding that can go along with it—and create their own destinies.

The number of online launches in the natural products industry has been climb­ing steadily over the past two decades. But now, according to a recent New Hope Net­work survey of 299 manufacturers, e-com­merce has become the most popular route to market among new brands. Of those that launched within the last three years, more than half did so online, compared to just 23 percent of three- to five-year-old brands. The online launch rate is even higher among dietary supplement and functional food and beverage manufacturers.

“These findings do not surprise me,” says Maryellen Molyneaux, president and managing partner at Natural Marketing Institute. “It is becoming more common to launch online, both out of opportunity and necessity because Amazon has such a large influence in the marketplace right now. While iHerb, Vitacost and many others sell healthy products online, it’s just the nature and size of Amazon that everyone thinks presents all the opportunity.”

Everyone is not wrong. NBJ estimates show internet sales growth is now double that of the total natural products industry. And in the manufacturer survey, third-par­ty e-commerce—Amazon and the like—is the number-one growth channel. Eighty-nine percent of respondents said their sales in this channel increased over the last five years; 70 percent reported an uptick in sales via their own websites.

“The democratization of the internet, increasing populations with mobile access to the internet, and improvements in mo­bile-enabled purchasing systems have made internet retailing the fastest growing chan­nel worldwide,” says Carolina Ordonez, senior consumer health analyst at Euro­monitor. “This is coupled with increasing consumer interest in cheaper consumer health products online, especially vitamins and dietary supplements, which represent­ed 65 percent—$14 billion—of global on­line consumer health sales in 2017.”

Why online works

With internet sales soaring, NBJ want­ed to know how natural products manufac­turers feel about brick-and-mortar’s future. Asked how important they think physical stores will be in the next five years, 20 per­cent said “not important at all,” while an­other 7 percent said “not very important.” Dietary supplement companies see even less value in brick-and-mortar with 41 percent considering it unimportant. But when asked about e-commerce, 84 percent of total survey respondents said it will be either “very important” or “somewhat im­portant” in the coming five years.

Clearly, for many natural products brands, especially startups, e-commerce is working. It is often a much cheaper path to launch, offers infinite shelf and lets manu­facturers sidestep the complexities of get­ting into stores—or at least put them off until later. “With online, the barriers of en­try are much lower, whereas at retail, they are only getting higher and more complex,” says Yadim Medore, founder and CEO of Pure Branding. “For someone who under­stands e-commerce and digital marketing, it’s not rocket science.”clickschart.PNG

Jay Jacobowitz, founder and president of Retail Insights, agrees: “As a startup CPG, why wouldn’t I launch online in­stead of jumping through all the hoops to get into traditional distribution channels? Now brands can create their own buzz on Instagram, Snapchat and Twitter. For a few thousand dollars, you can go to San Fran­cisco, hit a few yoga studios and get people talking about your product. Get some brand ambassadors, and the cost is miniscule.”

Once these efforts generate some con­sumer demand, then it becomes pull mar­keting, not push, says Jacobowitz. “When you have lots of rabid fans, suddenly UNFI has to pick up your product because Whole Foods wants it,” he says. “You’re slashing your cost probably 90 percent of what would it take you to mount an analog campaign through traditional distribution channels. I’d be surprised if any startup didn’t start that way.”

E-commerce isn’t perfect, though. “Launching online presents its own set of problems and challenges,” Molyneaux says. “To have people find you, you need very good digital marketing programs so you are seen and heard. E-commerce is an even bigger universe [than retail], and it is some­what not highly visible or obvious.” And, of course, brands have to deal with Amazon’s fees, tricky algorithms, price slashing and propensity to knock off successful products.

Drawbacks aside, however, e-commerce delivers a lot that retail stores can’t. For one, it offers nearly unlimited reach, a key asset for brands, since so many more consumers than ever are seeking out natural products. “Eighty-three percent of consumers are interested in natural and organic at some level and by different motivations,” Moly­neaux says. Many of those interested be­long to the 80 million–strong millennial generation, meaning they are often glued to their smartphones. “When trying to touch a generation that’s been brought up on the internet,” says Molyneaux, “the internet is how you need to reach them.”

E-commerce also allows companies to tell their stories—about transparency, in­gredients, mission and other values that consumers increasingly care about—in their own voices, without relying on a re­tailer to pass on the message. “There is this new generation of young leaders coming in who understand the online world and see it as an opportunity to disintermediate the trade and connect directly with consum­ers,” Medore says. “They have a much more sophisticated understanding of the term ‘brand’ and are building brands that have deeper meaning than those of the past. This gives them another way to connect directly to consumers.”

Obviously, some product categories will sell better online than others. With perish­able foods and beverages, shoppers want to taste, smell and feel before buying, so those brands almost need some retail ex­posure. “If you’re an online startup, how do you convince consumers to try an unknown food?” Jacobowitz asks. Plus, with low price points, most foods are not cost-effective to ship. “It goes back to cube, weight and per­ishability,” Jacobowitz says. “It doesn’t really make sense to send a low-price-point bread with 20-day shelf life—shipping costs will eat up the profits. The ideal product profile is a high-dollar, low-weight vitamin, where the shipping cost is a low percentage of the selling price.”

Another reason dietary supplements are inherently well-equipped to sell well on­line: “Education has always been key with supplements, and in brick-and-mortar we are seeing a reduction of educated staff on the floor,” Medore says. “But even before the big growth in supplement sales online, consumers were already researching prod­ucts online and then going to the store to purchase them.” Now they are continuing that research behavior but staying online to buy. And, as Molyneaux points out, “when shopping for supplements, everything you can see in person, including the back of the bottle, you can see online.”

The Whole Foods factor

All the changes brewing within Whole Foods are another force pushing brands web-ward. According to Bob Burke, found­er of Natural Products Consulting, the natural retail giant had traditionally been many startups’ first port of call. “For a long time, Whole Foods categorized suppliers as local, regional and national, but now ev­erything is going through Austin,” he says. “Before, a local company maybe started in a farmers’ market. Then when they were retail-ready, they walked into the Boulder Whole Foods store, and maybe the guy stocking shelves was the grocery buyer for that store. Even if it was tough to get into that region, you could go into a local store and possibly get set up.”

But now with Whole Foods central­izing operations, which began before the Amazon acquisition, Burke says brands are confused about how to engage with the retailer. Plus, shelf space has gotten more limited now that Whole Foods requires all direct vendors to go through UNFI. “We estimate that by implementing this new policy, 5,000 to 10,000 SKUs, many made by local folks, are suddenly out,” Jacobowitz says. “UNFI also is a real-world analog op­eration, and their 18 warehouses can’t mag­ically produce 5,000 new slots.”

Shelf space is also more expensive now. “Whole Foods is charging vendors, almost indiscriminately, an extra 3 percent,” Jaco­bowitz says. “These costs are being pushed down through UNFI and back to the vendor. With this getting much more ex­pensive for brands, who will survive? The deep-pocket CPGs.”

So, while Whole Foods’ moves may help the company improve execution, a perpet­ual complaint about its regional structure, they don’t bode well for small manufactur­ers and startups. “This was a 180-degree turnabout for a brand that touted having its finger on the pulse with 12 local regions, regional managers and individual store managers having the autonomy to respond to customers,” Jacobowitz says.

Brick-and-mortar’s fate

With everything e-commerce can pro­vide natural products brands, both old and new, is brick-and-mortar doomed? Hard­ly. “There is always going to be a role for retail,” Burke says. “There are just so many other opportunities today to get products to consumers.” Online, it just so happens, is a pretty fantastic one.

Also, while there has been a definite increase in digitally native brands with no plans of landing on store shelves—main­ly dietary supplement, functional food and personal care manufacturers—lots of online startups still go into retail as well. Some launch in both channels concur­rently while others pick up brick-and-mortar accounts after getting their feet wet and gaining traction online.

“There are plenty of dietary supplement brands building their own online tribes via social media and selling through their own websites,” Ordonez says. “For many, a natural second step is to make their products available via online retailers. Then in some cases, a third step is [brick-and-mortar] retailers, driven by consumer demand, approaching supplement companies directly in an attempt to offer new products in their stores.”

That’s why brands today typically devel­op both an e-commerce and a retail strat­egy, says Bill Weiland, founder, president and CEO of Presence Marketing/Dy­namic Presence. “Even if they don’t have both right away, they’ll eventually have a two-pronged approach,” he says. “Distrib­utors eat into margin, sales agents eat into margin, so going forward I think there will be companies that have tens of millions in sales before they show up in stores—and it may not begin with the classic retailers like Whole Foods or Kroger.”

With so much upheaval at Whole Foods, independent retailers look even more inviting. “Independents have always been good places for brands to launch,” Burke says. “And until things become more clarified with Whole Foods, independents may be easier to navigate, especially for new companies. Plus, in-store education is where independents really shine.”

Whatever types of retail outlets prove the best fits for natural products in the future, Weiland insists brick-and-mortar will remain a lucrative channel. “I believe there will be a higher percentage of all goods sold online versus at retail, proba­bly for most categories, within the next 10 years,” he says. “However, people un­derestimate the need for socialization, getting up and about and shopping in an actual store, so there always will be a cap on what online sales will be. To people who say brick-and-mortar is going away? You guys are high.”

This content is republished from the Nutrition Business Journal’s Sales Channel Report, a 158-page analysis of omnichannel dynamics for executives, investors, product developers and marketing teams. For information about purchasing subscriptions, market reports and data charts at end-of-the-year discounts, go to www.nutritionbusinessjournal.com or contact NBJ Business Development Manager Cindy Van Schouwen at [email protected], (303) 998-9305.