We’ve all heard that healthy natural organic products are driving sustainable sales across all categories, but what does that really mean and what are the key drivers retailers and brands should be paying attention to?
Natural and organic products are driving the sustainable growth in mainstream retail. In the 2016 Category Management handbook, I shared that in the absence of natural and organic products, category sales are flat or declining across most every category and every channel. For example, I stated that total of all dairy was up +1.5% while organic dairy was up +12.1%. Organic dairy represented only 9.8% of total dairy sales. If you remove organic, total dairy would only be up +0.5%. The impact the small sliver of organic has on total dairy sales is staggering. The story is similar for other categories.
Global organic sales are $36 billion and growing, +36% from 2012 through 2016. Organic sales represent only 5% of total healthy and wellness with tremendous potential for growth which is estimated to be +5.3% CAGR over 2016-2021. The United States represents about 45% of global organic sales*.
Fueling that growth is the fact that “37% of participants are actually looking for organic products when going to the supermarket*.” In addition, they are also looking for “features that were directly linked by them with the definition of organic, which can have an influence on purchasing organic
products.” Those features are identified as being “free of” or “clean label”. Clean label products are free of chemicals, allergens, synthetic ingredients, etc.
Now that I have your attention, what does this mean and how can retailers and brands capitalize on these important growth drivers?
Read the rest of the article at Progressive Grocers
*Source: Euromonitor International Global Survey CERTIFIED ORGANIC: OPPORTUNITIES IN FOOD AND BEVERAGES, July 2017.
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