Natural Products Industry Continues to Outperform at Conventional Retail, Says SPINS

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Natural Products Industry Continues to Outperform at Conventional Retail, Says SPINS

The outlook for sales of natural and organic products in conventional food, drug, and mass retailers remains positive, even in the face of recession, said natural products industry information and service provider SPINS.

SPINS said the natural products industry posted sales of $13.4 billion on growth of 12.2 percent at conventional food, drug, and mass retailers over the 52 weeks ending October 4, 2008.

Body care, general merchandise and frozen and refrigerated continued to post double-digit growth rates, the market watcher said.

Organic products continue to outperform natural products overall, with growth greater than 13 percent over the previous year. While the industry momentum has slowed in conventional retailers in recent weeks, organics growth continues to be solid at 7 percent in the most recent 12 weeks, SPINS reported.

Key success determinants for both manufacturers and retailers in the space include a continued commitment to the authenticity of the products and core consumers. The market's underlying drivers of consumer activity in the segment are sustainability, and awareness the direct affects of purchase decisions on the environment and health.

While the top sellers will continue to attract the majority of the sales, there are a number of extremely fast growing categories that will provide retailers and manufactures with additional organic expansion opportunities, especially in body care and pet products, said SPINS. Authenticity is perhaps one of the most dominant themes of success in the segment. Brands most heavily associated with the roots of the industry remain the dominant drivers of both sales and growth.

Penetration of U.S. consumers also continues to increase across the majority of the product categories, indicating continued opportunities for product and shelf expansion, SPINS reported. In addition, the "beyond organic" and health concerns segments are some of the strongest performing areas, including fair-trade, raw foods and gluten free.

"As evidenced by the performance in the natural channel, authenticity of natural brands and retailers continue to be one of the key factors in product performance," said SPINS c.e.o. Tony Olson. "Authenticity extends beyond whether a product is free of artificial flavors and ingredients and moves into the realm of overall health and wellness, social and environmental sustainability, nutritional benefits and other leading factors.