Expo East: Organics Are Mainstream And Shoppers Are Buying, Future Millennials Kids To Create A Boom

The Natural Products Expo East kicked off yesterday in Baltimore, and there are tens of thousands of trade buyers and brands combing the exhibit floor for the latest and great new product and trends from over 1,400 exhibitors now through Saturday.

September 18, 2017

Originally published on Forbes.com.

The Natural Products Expo East kicked off yesterday in Baltimore, and there are tens of thousands of trade buyers and brands combing the exhibit floor for the latest and great new product and trends from over 1,400 exhibitors now through Saturday.

Even more important to the industry than the unique and sometimes tasty samples is the findings of two new research reports that clearly sets the directions for all retailers and brands for the future.

The first, Accessibility Of Organics: The Blurring Of Channel Lines In Delivering Organic Products was presented by Andrew Mandzy, Director of Health & Wellness Strategic Insights for Nielsen and pointed out how organic offerings are growing throughout the store: the number one growth area being in the deli. The report also shows how the accessibility of organics continue to grow across all retail categories – conventional grocery, warehouse club, supermarket Mass and value grocery. The only decline, 3.4% was in the premier grocery channel which may not be as surprising as it appears since the stores in this channel led the organic boom and typically have overstocked their shelves with organic foods and beverages. The result is as there are more competitors now selling organics, this channel is culling their offerings to remain as ordering more unique products.

Consumers in the Nielsen study also shared which product categories are most important to be organic. Baby food led the list at 40 percent saying it was important, followed by yogurt at 15% and surprisingly only 8 percent said it was important for milk and 4 percent saying so for ice cream. No doubt, the fact that 41 percent of the US Respondents said that the financial costs associated with eating healthier foods are a barrier to purchase; 87 percent cited milk as an example and 41 percent said the same about ice cream and 20 percent said it was a barrier to buying organic baby foods.

This report clearly underscores the fact that there is an interest in buying more organic foods, and as prices come down there is a huge opportunity for growth (as we have already seen since Amazon has lowered the prices at Whole Foods). Foods that contain an organic claim on the label are up 9.8 percent over a year ago according to Nielsen.

 

The second presentation, from the Organic Trade Association reports that Millennials are big buyers of organics and as they become parents (OTA predict that 80 percent of them will do so over the next 10 to 15 years) the organic industry “will see a surge of new organic eaters and consumers-the millennial parents of tomorrow and their children,” according to OTA’s CEO Laura Batcha.

The facts behind this prediction is that for the first time, OTA’s US Families’ Organic Attitudes and Behavior Study also surveyed households without children – offering the industry a peak into the future. The 2017 report finds that millennial parents—parents in the 18- to 35-year-old age range—are now the biggest group of organic buyers in America. And that consumers who always or most of the time choose organic are driven by a strong belief that selecting organic for their family makes them better parents.

In the OTA report, as in the Nielsen report, baby food ranked as the top category for which respondents said that buying organic is extremely important, which actually surpassed the fruits and vegetables category) for the first time since the survey began in 2010). While it is simply anecdotal and my insights, it goes to reason that if we have a generation of baby and kids that grow up on organics, those eating habits will continue as they age and form their own food purchasing habits.

Which is good news for those retailers and brands that focus on delivering organics for a good value. Retailers like Amazon Whole Foods, Aldi, Lidl and conventional supermarkets with strong organic store brands like ShopRite and Kroger should do very well indeed. Nielsen’s study also compared the price of an organic basket of foods – store brand vs. national brands and found a cost savings of 18 percent.

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