Consumers are purchasing more natural products in 2020, according to new research from IRI and SPINS. The report, "COVID-19 and Navigating the Path Ahead: Supporting the Natural Products Consumer," looked at product and shopping preferences both before and after the coronavirus pandemic.
“Dollar sales for natural products continue to grow over one year ago, as much as an astounding 78% in the middle of March during consumers’ initial stock-up period, and continuing in the high teens at present,” said Steve Ramsey, EVP and general manager, strategic accounts at Chicago-based IRI. “Given that natural products represent more than 8% of total store sales year to date and are outpacing sales of conventional products, there are significant opportunities for manufacturers and retailers alike to show support for consumers.”
More shoppers are turning to the internet as stay-at-home orders are in place in various stages throughout the country. E-commerce, including pure-play and click-and-collect, has seen the greatest growth, with trips per buyer for natural products increasing 27% versus one year ago. Trips per buyer for all other channels, however, exhibited slow or negative growth. E-commerce dollar purchases per buyer of natural products rose 15% compared with one year ago, at roughly the same pace as for the grocery channel.
The research also found that shoppers are adapting to new strategies or preferences, including sale items, larger package sizes and private label options as natural products' average retail price increased by approximately 10% versus the year-ago period, faster than most conventional counterparts.
Sales of private label vitamins and minerals jumped 1,286% compared with a year ago, versus 41% total category growth; and private label household cleaners and supplies grew 120%, versus total category growth of 37%.
IRI and SPINS are recommending three strategies for retailers as a road map to success for natural products beyond COVID-19.
- Reinforce commitment to current shoppers by better understanding their engagement with natural foods, and design strategies to maintain their loyalty and increase share of basket.
- Identify potential new buyers, gain a deep understanding of their behaviors, build conversion strategies, and actively engage them through targeted marketing.
- Continuously refine a fluid channel strategy to reflect changing circumstances that target both brick-and-mortar stores and the growing importance of e-commerce.
“We continue to see an ongoing shift in shopper thinking when selecting from natural and conventional products,” said Kathryn Peters, EVP at Chicago-based SPINS. “As the pandemic dominates the news and the focus remains on health and well-being, natural products will continue to outperform other products as consumers continue to invest in better-for-you items to eat, to use on their bodies and to maintain their homes.”
The complete report from IRI and SPINS also looks at the wider range of shoppers trying the natural marketplace during the pandemic.