Supplements are doing well, according the Nutrition Business Journal, which presented its findings at Expo West’s Supplements Today education session. Supplements grew 6.6% in 2016, amounting to $41.4 billion and functional foods grew even more, by 7.6% or $59.7 billion. Natural and specialty stores are driving this growth, with 37% of supplement sales coming from the natural channel compared to 27% from mass market and 6% from ecommerce. It should be noted however, that while e-commerce is in the minority, internet sales have grown by 11%, driven by Amazon and will likely continue to grow, especially with the launch of its Amazon Elements supplement line. The categories that have seen the most growth are herbs & botanicals, probiotics and sports nutrition which are a reflection of leading trends such as protein, gut health and interestingly enough, convenient delivery formats. It also explains the growth of functional foods, of which protein has for a long time been an important factor, but more recently, with technological advances in probiotics that enable them to be stable in foods and beverage applications, consumers are partial to the convenience of drinking and eating probiotic-rich products over a supplement regimen. Protein, for that matter, is now a mainstream category, not just attracting athletes, with protein marketed in snacks such as bars, yogurts and even cookies. Within the protein category, plant protein continues to grow with continually innovative formulations and protein sources. It is likely that the increased demand for plant protein is helping further drive the growth of protein in general. For example, between 2005 and 2014, consumers seeking food high in protein grew 18% from 35% to 53%. With regard to delivery format, it’s interesting to note that gummies are no longer just for children and in fact, adult gummies have outpaced children’s gummies by 30%. Emerging trends to be aware of include whole food supplements as well as brain health. The cognitive health category is making its way into functional foods, often beverage formats. Sleep is also becoming a major opportunity for companies as we see manufacturers put out more sleep support supplements such as melatonin.
We all understand the value of eating organic, but this is not always easy to communicate to customers who are not familiar with organic agriculture and agriculture in general. The Organic Center presented a session in which experts explained the best ways to communicate these benefits to customers that are easily digestible and effective. Clearly, the facts of pesticide exposure are important, with both occupational exposure of farmers and dietary exposure to pesticide-treated produce having tangible impacts on health, but an important take away from the session is that when educating people about these risks to personal health to frame organic as a way of reducing the risks of disease and improving personal health rather than detail the many ways a person’s current diet is poisoning them and their families. This is a lifestyle, so encourage people to make a positive lifestyle choice rather than denigrate their current lifestyle in which they may feel like they are being judged or attacked for eating and feeding their family food they thought was completely safe. In addition to this, there are multiple angles from which to approach the benefits of organic agriculture. For example, some individuals may be more moved by the environmental perspective, in which organic agriculture promotes soil health, encouraging microbial biodiversity and higher levels of nutrients (that translates into more nutritious produce) as well as maintaining the structural integrity of soil, allowing it to effectively filter water and resist erosion. There is also no pesticide runoff, protecting water from contamination from runoff such as nitrogen which promotes the growth of algae in water, blocking the sun from reaching plant life under the surface of the water, creating dead zones in which aquatic plants and animals die. Another topic to broach which is often glossed over but very important is the use of antibiotics in livestock that is not organic. The heavy use of antibiotics promotes antibiotic resistant bacteria that is contaminating our food supply and puts people at risk.
Researchers from New Hope Network and Natural Marketing Institute (NMI) discussed the massive growth within the natural food and products industry, and also explored the underlying consumer attitudes and trends that are fueling this growth during the State of the Industry session. According to data from Nutrition Business Journal, the U.S. natural products industry — which encompasses food and beverage, functional food and beverage, natural and organic, dietary supplements and natural living (house hold, pet, beauty) categories — grew 7.7% to $19.5 billion in 2016, adding $14 billion in new sales to the industry. What’s more, this research is forecasting $200 billion in sales for 2017. More specifically, the natural and organic food and beverage category — the largest and fasted growing category— saw an increase of 8.5% last year, making $75 billion. These researchers attributed the 7.7% growth in functional food sales to companies like Kevita and Bai, which were acquired by Pepsi Co. and Snapple, respectively. Natural living sales grew 7.5% to $ 19 billion. While this increase may seem small in relation to the other categories, it still points to consumer’s awareness over what they put in and on their bodies. The significance of these jumps in the numbers may not be as eye-opening until put into perspective. Just ten years ago, the industry made $100 billion in sales — and this was garnered despite the deep recession our country was in at the time. This means the industry has doubled in size since 2007. Herbs and botanicals have also seen a 7.7% surge, increasing sales by $7.5 billion in 2016. The researchers pointed to Millennials in particular for helping in the growth of this category. Overall, Millennials seem to be the driving force behind conscious shopping. This is because Millennial consumers are asking more questions about social responsibility and sustainability. When asked what these shoppers are interested in in terms of what companies are actually doing, 66% said keeping jobs within the U.S. 54% are concerned with the humane treatment of animals, while 51% care about the reduction of the trash/waste these companies produce. Forty-three percent care about access to clean water, while 40% want to prevent global warming. The experts explained that companies should therefore position their branding, marketing and product development to align with what consumers are asking for. They urged attendees not to wait for consumers to demand because that insinuates that consumers are now experts in the industry, when in fact experts in the industry should be leading on behalf of the consumer. Consumers are expecting the industry to run responsible businesses, and they want to buy brands that stand for something in the market place.