Immunity and well-being are still at the center of their concerns as consumers continue to seek out clean ingredients, but there are many other factors that drive growth when it comes to organics.
During the Organic in Retail: Trends and Perspectives Session held at Natural Products Expo East 2021 in Philadelphia, industry experts discussed organic trends retailers need to watch out for.
The organic industry, in both food and non-food categories, grew at a rate of 12.4% in 2020 with sales of $ 61.9 billion. This is a drastic increase from a growth rate of 5% in 2019.
“Organic has really expanded beyond food and drink to become vitamin supplements,” said Scott Dicker, Marketing Data Analyst at SPINS. “It goes into alcohol, body care and everything else as well.”
The main trends for 2021 are to be plant-based, to have clean labeling with minimal ingredients, sustainable meat and dairy products, to be immunity-focused and mission-based and to offer options for a variety of lifestyles and food preferences.
Look on Amazon for information on organic trends, said Jake Bernstein, sales director at ClearCut Analytics.
“We think the trends are happening on Amazon about 24 months ahead of food, medicine, and mass,” Bernstein said. This is because Amazon has endless storage space with a range of products and includes a mix of legacy and native digital brands that may not be reflected in traditional brick and mortar data.
It also represents a huge portion of CPG e-commerce with around 70% of online sales coming from Amazon, Bernstein said.
Emerging trends in organic
Consumers are proactively taking more care of themselves and want pantry preparers that require less retail travel because they optimize their time. Shrinking wallets mean that home consumption of coffee, wine and beer is always higher for simple indulgences.
Organic shoppers continue to cook more home-cooked meals that involve meal preparation with nutritious ingredients, while “rushed shoppers” are increasing their budgets by purchasing high-value private label products such as beans and grains.
Natural products (up 5.9% growth in dollars) and organic products (up 2.2% in dollars) led the growth in dollars observed in the total growth of the industry, products conventional products showing growth of 1.9% in dollars.
Alcohol, drugs and personal health, vitamins and supplements, and fruits and vegetables lead the year-over-year growth for organic products.
In the food and drink category, organic products labeled gluten-free, vegan, and plant-based are still doing well. “Super mushrooms,” a category that has seen dollar growth of 11.2% year over year, and superfoods, a category that has seen dollar growth year over year. 5.7% in 52 weeks, are doing exceptionally well, Dicker said.
“So this transition from a supplement to a food and a drink as functional foods is faster than ever,” Dicker said.
Retailers need a strong online presence
Shoppers of natural products buy more online, almost twice as fast as those who buy all products, and buy less from Walmart than those who buy all products, said Jeff Crumpton, head of retail solutions at SPINS.
“Consumers are more likely to walk into the store when conditions are safer, but when they aren’t, they turn to e-commerce,” Crumpton said.
Expect the private label to bounce back
Organic private labels performed very well last year and then declined. “This could be largely due to the fact that co-packers are prioritizing national brands over private brands,” Crumpton said.
Expect private labels, which are the heart of retailers, to see improvement as supply chain issues begin to be resolved, Crumpton said.
Best categories of organic food and drink
Chilled milk remains the top food and beverage category by volume, with a slight year-over-year decline as consumers stockpiled pantry last year, Crumpton said . The other main categories were chilled juices and functional drinks, bread and baked goods, chilled eggs and frozen main dishes.
Items, including organic creams and shelf-stable creams, are growing 57.2% year-over-year and outperforming non-organic products which have a declining trend. Long-life organic sodas and soft drinks grew 57% year-over-year, compared to 6.8% for non-organic drinks. Ditto for organic refrigerated tea and coffee which experienced a growth of 41.1% year on year, against a growth of 18.7% for non-organic products.
There is strong growth in organic beer, hard cider and other malt beverages, which are growing 81.7% year-over-year, compared to the 2% growth in non-organic .
Non-food organic products and beverages are also growing
Performance nutrition was once consumed by a male-dominated industry, pre-workout and pre-workout, Dicker said. But that audience has spread to all genders and age groups, with consumers engaging in more active lifestyles. Performance Nutrition is growing 83.7% year-over-year, compared to the 28.2% growth in non-organic products.
Key ingredients for supplements and vitamins
Organic superfoods and complete dietary supplements are growing 81.8% year-over-year, Dicker said, which is far more than the 34.2% rate seen by non-bios.
Gluten-free and non-GMO labels are still very important, Dicker said, along with paleo and clean labels that don’t contain artificial ingredients. Vitamins and supplements containing nootropics and superfoods are experiencing strong growth. Apple cider vinegar as a functional ingredient has seen a massive increase, growing in dollars by 842.2% year-over-year in 52 weeks.
“We saw that 2020 was all about immune health,” Dicker said. “It has shifted to general well-being. “
This impacted adjacent categories such as Mood Support, which saw 65.3% year-over-year dollar growth in 52 weeks, as well as support-focused supplements. sleep, stress support and gut health.
“Consumers are not only looking for their functionality, but they are also looking for this natural benefit, with organic being a key component,” Dicker said.
Notable supplement sub-categories
Organic multivitamins, protein potency, and turmeric should be considered notable supplement subcategories.
“The organic growth rate for each of these subcategories exceeds that of the subcategory as a whole, as well as for non-organic products,” said Bernstein.
The organic multivitamin category is growing 63% year over year, compared to a non-organic growth rate of 43%. This is led by brands like SmartyPants, Garden of Life, New Chapter, Rainbow Light and Naturelo.
With an average price of $ 30.69 for organic multivitamins, compared to the average price of $ 21.58 for non-organic, Berstein expects it to be more competitive in the future and continues to see the biological occupy a greater market share.
Organic protein powder is growing 52% year-over-year, compared to a 32% non-organic growth rate, led by Orgain, Garden of Life, KOS, Vega and Sunwarrior. Organic turmeric is growing 48% year over year, compared to the non-organic growth rate of 28%. The main organic brands are Bio Schwartz, Gaia Herbs, Garden of Life, New Chapter and Doctor’s Best.
Unlike multivitamins, both subcategories still have higher average prices for non-organic products than for organic options.
Growing vitamins and supplements
There has been a huge growth in vitamins and supplements labeled 95-99% organic. “There is a huge opportunity,” Crumpton said. “A lot of brands are really looking at this tendency of customers to buy vitamins and supplements in this category. It’s a trend to keep watching.
Last year, vitamins and supplements labeled 70-90% organic suffered, but made a comeback in the past six months, Crumpton said.
Protein supplements and meal replacements, whose sales declined last year, “are starting to reopen,” he said.
Organic superfoods and whole food supplements are growing 81.8% year-over-year, Dicker said, compared to 34.2% for non-organic products.
Watch the replay
The Natural Products Expo East 2021 session Organic in Retail: Trends and Perspectives is available in replay on the virtual community platform Natural Products Expo.