Grocery Headquarters takes a glimpse at trends impacting key wellness categories and the hot items expected to drive growth this year.
The Natural Products Expo West show is considered by most to be a bellwether of what is on trend in the natural and organic industry. This year’s show, held March 8 to 11 at the Anaheim Convention Center in Anaheim, Calif., is once again poised to generate record level interest and excitement with the latest and greatest the natural food industry has to offer.
Part educational sessions, part trade show, Expo West has grown tremendously in recent years in both breadth and depth. Show officials are expecting more than 1,800 exhibitors and more than 58,000 attendees from multiple retail channels. Co-located with Expo West this year will be Engredea and Nutracon, the ingredient and supply chains’ comprehensive trade shows focusing on innovation. In addition, there will also be a Beer, Wine & Spirits Marketplace as well as the Fresh Ideas Organic Marketplace.
“By January, it was already clear to us this was going to be the largest show we’ve ever had in terms of exhibitors, which is particularly impressive considering last year’s show earned that distinction,” says Adam Andersen, Natural Products Expo West show director. “Moreover, we have more first-time companies exhibiting this year than we’ve ever had which to me is an indictor as to how strong the interest in natural and organic is this year.” Attendees, he notes, can expect to see tons of innovation in both products and packaging, as well as an up- tick in the number of health and beauty care companies launching new products.
Expo West officials say many of the launches will be seen in key categories including beverages, frozen, cereal, organics, snacks, gluten-free and dairy. Here is a sneak peek at some of the trends driving the top better-for-you categories and what companies are planning to launch at the show.
Consumers are looking to make more informed choices about what they eat and drink, say officials from organic beverage maker Honest Tea, pointing to the hugely successful “Just Label It” campaign. The campaign has consumers petitioning the FDA to legally require that genetically engineered (GE)—often referred to as genetically modified or GMO—foods be labeled as such.
“People are asking for more clarity and transparency regarding the products they buy,” says Seth Goldman, TeaEO of Honest Tea, based in Bethesda, Md., who calls the interest in the campaign “striking.” He says that this same momentum will impact interest in organics this year, adding that while the primary driver for buying organic had once been having kids, studies show an equal number of people are buying organic as a means to prevent disease.
At Expo West, Honest Tea will be launching a number of new items in its Honest Kids line of organic thirst quenchers. The company will also be launching a zero calorie organic stevia drink and debuting a line of bottled teas featuring the herb tulsi.
Wellness teas present a large growth opportunity within the health and wellness category, says officials for Celestial Seasonings. Blake Waltrip, chief marketing officer for the Boulder, Colo.-based brand, part of The Hain Celestial Group, based in Melville, N.Y., says these medicinal type teas are increasingly viewed by consumers as helpful and natural alternatives to over-the-counter medications. He adds that wellness teas, including those like Celestial Seasonings Sleepytime Sinus Soother, Throat Tamer, Antioxidant Max Green Teas and Echinacea Complete Care, represent 35% of natural channel sales of specialty tea and they are the fastest growing grocery segment in specialty tea with 10% of sales.
Celestial officials also say that products in the energy drink and shot category will remain hot this year, noting that in the U.S. the category grew 30% from 2010 to 2011, with continued growth thus far this year.
Waltrip says that there is a large group of consumers looking to bridge the gap between finding more energy and making healthy, natural dietary choices. Celestial Seasonings, adds Waltrip, offers a solution for this with Kombucha Energy Shots. He says that these “Kshots” are made from live, raw kombucha—a fermented black tea beverage often touted for its healthful probiotics and the rejuvenated feeling it provides—and a proprietary energy blend, delivering a safe and natural energy boost. “It’s unlike any other energy shot on the market,” says Waltrip. At Expo West, Celestial will be introducing a number of new teas including several herbal teas, green teas and a special holiday-flavored tea featuring pumpkin. The company will also be launching a tea commemorating the 40th Anniversary of its popular Sleepytime tea.
While the cereal category dollar and unit sales have been flat, according to Daniel Wiser, director of marketing for Attune Foods, based in San Francisco, several concomitant trends are positioning the category for growth this year. He says gluten-free products continue to do very well in both the natural and conventional channels as more consumers look for cereal options to address gluten-free needs. Additionally, Wiser says products that are non-GMO project verified continue to show strong growth as consumers demand more transparency and understanding around the sourcing of their food.
According to SPINS data, sales of products with the non-GMO verified logo grew 53% in the natural channel and 328% in mass for the 52 weeks ended Oct. 1. “Sales of verified products now total over $1 billion,” says Wiser, adding that Attune Foods’ Uncle Sam and Erewhon cereals are non-GMO project verified. The company also offers seven certified gluten-free cereals under their Erewhon label.
“We have seen more consumers looking for non-GMO project verified cereals due to increased awareness and interest in foods that are well understood,” says Wisner. “Our Uncle Sam Original cereal has only four ingredients, while Erewhon Crispy Brown rice is made with only three—this combination of simplicity along with non-GMO project verification resonates with today’s consumers.” Consumers, he adds, are also looking to take more sugar and sodium out of their diet and breakfast cereal is a logical place to focus. “Several of our cereals, including Uncle Sam Original and Erewhon Crispy Brown Rice are unique for having 1 gram or less of sugar per serving.”
Choice, choice and more choice. That is the answer Gordon Hagedorn, vice president of sales for Cedarlane Natural Foods, based in Carson, Calif., gives when discussing the key to capturing more better-for-you frozen food sales. “Consumers are demanding to see a reasonable selection of products when shopping for frozen natural and organic products,” says Hagedorn. “This year in particular will see the mainstream wellness consumer heading to the grocery channel in search of more choices in frozen natural and organic foods.” Why this year? Hagedorn says although the club and mass discounters have spent years developing this category, they have only managed to secure a handful of top brands with limited SKU assortments.
“Therefore, tired consumers who are dissatisfied with these few choices will migrate to the grocery channel to find and purchase a broader assortment of wellness products,” says Hagedorn.
Cedarlane officials say retailers can expect to see legacy natural and organic brands updating packaging to better appeal and be more relevant to next generation wellness consumers. Hagedorn says Cedarlane will be showcasing its new packaging designs at Expo West including front of pack nutrition icons, an interlocking brand design to create bill boarding at shelf, QR codes to link to their “plant a tree” program and a vertical merchandising option allowing grocer’s to maximize assortment at shelf.
The Glutino Food Group, based in Lawrence, Mass., has been manufacturing gluten-free products since 1983. Its current lineup includes more than 80 gluten-free products in categories such as baking mixes, cereal, cookies, crackers, frozen bakery, frozen entrees, frozen pizza, pretzels, and snack bars. According to Laura Kuykendall, director of marketing, the company will be unveiling a new brand look at Natural Products Expo West. “We are thrilled to share the next evolution of our brand,” says Kuykendall. “We are pleased to provide products that make consumers feel their best and support them on their gluten-free journey. With a wide-variety of gluten-free products, we inspire consumers to live more fully and freely.”
In addition, in 2012 Glutino is planning to expand its award winning line of bagel chips by adding a Cinnamon & Sugar variety. The company will also be expanding its product line of Genius by Glutino bread in the spring.
Tripp Hughes, director of category management for Organic Valley Family of Farms, based in La Farge, Wis., calls this year a “very exciting time” for organics and says given its current rate of development organic sales are poised for growth. “The number of new customers entering the organic category today is further proof organics are not a fad. In tough economic times when categories are happy just to record flat sales, organics are booming,” says Hughes.
He says category growth this year is back in the double-digit range. “It is clear that consumers believe and trust in organic products,” says Hughes. “And the push we continue to receive from healthcare professionals who are recommending organics be incorporated as part of a healthier regimen with folks interested in improving their well-being has clearly helped fuel the growth as well.”
Organic Valley will be introducing several new products at Expo West. “Given that much of the growth in organic dairy is from convenience products we decided to launch unprocessed organic American cheese singles,” says Hughes. He adds that Organic Valley will also be launching milk from 100% grass-fed cows.
Jeff Carducci, national sales director of derma e Natural Bodycare, based in Simi Valley, Calif., says consumers are increasingly looking for natural skincare products in the traditional channels where they make skincare purchases most often. “The natural channel will always be very important, but food, drug and mass stores are becoming a larger piece of our business and the category,” says Carducci.
Given the category’s increasing popularity, officials at derma e expect more products, more companies and more technology to infuse excitement in the category. “As a result of increased exposure to natural skincare, consumers are gaining more confidence in these products and are more willing to purchase products in the category that provide higher order benefits,” says Carducci.
At Expo West derma e will launch its Evenly Radiant line. According to Carducci, the line of six products targets uneven skin tone and discoloration to provide a visibly brighter, youthful complexion.
Observers say that products related to sun care, shaving, haircare and bath products are anticipated to experience significant growth as well. Conversely, subcategories such as oral care, deodorants and moisturizers are likely to experience slower growth this year.
Jim Healy, vice president, marketing for Kiss My Face, based in Gardiner, N.Y., expects to see more manufacturers integrating new natural ingredients into their product lineups to enhance performance and make them more competitive with mass market options. “At Expo West Kiss My Face is launching a natural sunscreen cream product that incorporates hydresia oleosomes to provide improved moisturizing.”