Sales of Natural Products Are Growing

Millennials will spend more for what they believe are quality products.

September 12, 2019

ALEXANDRIA, Va.—The sales of natural products are outpacing sales in the total food and beverage retail market, according to a new report from data firm SPINS that was reported in Grocerydive.com.

SPINS’ first State of the Natural Industry report found natural products reached $47.2 billion in dollar volume for the fiscal year ending May 2019, reflecting a 5% increase over the previous year-long period. Natural products made up 9.1% of total dollar volume for food and beverage categories for conventional retailers and accounted for 27.4% of growth in the past year. C-stores saw 12.6% growth in the category to $2.7 billion, with enhanced waters, kombucha and puffed snacks among the top items.

For the first time, eggs, shelf-stable beverages and frozen and refrigerated meats made the list of top five natural products, while yogurt and kefir saw a 2.4% decline in sales.

The demand for healthy and convenient options has brought more natural products to retailers’ shelves, too. Products that were once available only in natural or specialty stores are now found in traditional retail settings from grocery stores to convenience stores.

Earlier this year, major global measurement and data analytics company Nielsen announced key trends in consumer behavior that showed many Americans are trying to make healthier lifestyle choices, particularly in their foods and beverages. This holds true to the findings from SPINS’ report, in which nearly all households purchased natural products at least once in 2018, with 92% purchasing organic products. 

In addition, 70% of millennial shoppers are willing to pay more for high-quality foods, according to a new survey conducted for Whole Foods by YouGov. As reported in Fooddive.com, half of millennials buy more organic products than they did five years ago, and more than 65% say transparency in food sourcing is important, particularly in fresh meat and seafood. The survey also noted that nearly 70% of millennials read labels more closely than they did five years ago, while 63% try to incorporate plant-based and unprocessed foods into their diets.

Continuing along the trend, Consumer Affairs reported on a study from Ibotta that found millennials shop 35% more often than other demographics at stores such as Whole Foods and Sprouts Farmers Market because of the stores' core traits, with the demographic not being known for being price conscious. Nielsen found that millennials spent 14% more on organic food and beverage than the year prior. Another Nielsen report from 2018 showed that members of the generation were more willing to pay for products with sustainable, environmentally friendly, organic or natural ingredients.

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