Organic products are fueling sustained sales growth across most every category, leading both natural and Non-GMO in many cases. They represent perhaps the single best opportunity for brands to drive profitable growth for themselves and their retail partners.
Total US Food sales (all outlets) were up only +1.9% in 2015 while organic sales were up +16.9%. Organic products represent only 3.1% of total food sales. Natural product sales were up +11.0% and represent 7.7% of total food sales. Non-GMO sales were up +15.8% and represent 4.0% of total food sales*. This is great news for organic brands and their loyal shoppers.
Consumers want healthy clean label products that they can trust and confidently feed their families. A growing number of shoppers place quality over price. This is especially true for organic products. Shoppers look to organic products to improve their health and wellness. In many cases, consumers use organic and better-for-you products to supplement and/or replace the need for doctors and prescriptions.
Organic products by definition are clean label. Organic products contain USDA certified organic ingredients. Organic ingredients are automatically free of GMO’s, pesticides, herbicides, man-made and synthetic chemicals, etc. They are as nature intended them to be. These trends are top of mind for consumers and are fueling all of the health and wellness trends. They are leading category growth across every channel.
So how should brands capitalize on these important trends to grow sales and compete more effectively?
Before I address that I need to make a couple of key points.
It is important to remember that retailers have three primary objectives:
- To grow their loyal shopper base (the number of consumers who shop their stores). This can be accomplished by promotions and product assortments that meet the needs of their shopper base.
- To encourage shoppers to make most or all of their purchases in their stores (their monthly shopping list). Shoppers have a myriad of choices. This step is critical to helping the retailer compete and grow in their market.
- To increase the size and value of their shopper’s market basket (the items in their shopping basket at checkout). This is accomplished by inviting shoppers to trade up to more expensive items, for example, organic milk as opposed to non-organic milk.
So, how do organic brands capitalize on these important trends?
*Source: Nielsen Answers Period Ending 10/24/2015 Total US Food, Drug, Mass, Walmart, Sam’s, BJ’s, Dollar Stores, and Convenience.
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