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 that we should be paying attention to?
Natural and organic products are driving the sustainable growth in mainstream retail. In Progressive Grocer’s 2016 Category Management Handbook [find the latest edition here], I shared that in the absence of natural and organic products, category sales are flat or declining across almost every category and every channel.
For example, I said that total dairy was up 1.5 percent, while organic dairy was up 12.1 percent. Organic dairy represented only 9.8 percent of total dairy sales. If you remove organic, total dairy would be up only 0.5 percent. The impact that 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, up 36 percent from 2012 through 2016. Organic sales represent only 5 percent of total health and wellness, with tremendous potential for growth, which is estimated to be 5.3 percent CAGR over 2016-21. The United States represents about 45 percent of global organic sales, according to a July 2017 Euromonitor International Global Survey, Certified Organic: Opportunities in Food and Beverages.
Fueling that growth is the fact that, as Euromonitor’s survey found, “37 percent of participants are actually looking for organic products when going to the supermarket.” They’re 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.