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Five Key Steps for Natural Products Growth in '09

Five Key Steps for Natural Products Growth in '09

A winning trade show these days is one that almost makes you forget we're in a deep recession.

That was the case with last week's Natural Products Expo West in Anaheim, a show produced by New Hope Natural Media, a corporate sibling of Supermarket News. The mood was upbeat, with retail attendees and exhibitors saying consumers are still spending money and sticking with this lifestyle.

Granted, many of the retailers present were natural foods independents, who may be facing less price resistance than supermarkets. But the general sense of confidence about business was notable (click on "Natural Products Sector Seen Weathering Recession" for the story, and check out our Expo West show blog:

What also emerged from Expo West was the sense that the industry needs to pursue some crucial steps this year to grow business. I have chosen five of the most important ones based on four days of feedback at the trade forum:

  1. Track shifting product trends: This business definitely doesn't stand still. While organic is leveling off in some areas, categories such as probiotics, hormone/antibiotic-free, antioxidants and gluten-free are on growth tracks. Meanwhile, my colleague Bob Vosburgh found a number of new product directions at Expo West, including those involving nut butters, goat milk dairy, heirloom grains and organic cocktail mixers (see “Trend Watch,” Page 19).

  2. Understand new consumer behavior: Marketers can't operate in this space without understanding that consumers have hit the reset button. Maryellen Molyneaux, president of Natural Marketing Institute, called it a “recalibration,” sparked by the recession, that involves a search for balance in nutrition and overall lifestyles. Moreover, she pointed out, consumers are moving to eliminate anything toxic from their lives, whether it involves food, relationships or other aspects, and are renewing their focus on “authentic, beauty from inside.”

  3. Jumpstart health education: Winning retailers will make sure customers are properly informed about health despite a sea of confusing media and marketing information. Ahold USA is one of the organizations that recently developed a new nutrition labeling program for shoppers, called Healthy Ideas. At Expo West, Ahold USA's vice president of corporate responsibility and sustainability, Harriet Hentges, said consumers have embraced the company's educational efforts.

  4. Broaden channel distribution: Those suppliers hoping to grow sales should expand distribution to mainstream retail channels. While supermarkets represent a major opportunity, value outlets, including supercenters, dollar stores and limited-assortment stores, should also get attention. “You need to be in the value channel,” urged Marty Siewert, group vice president, the Nielsen Co.

  5. Expand retail opportunities: More than a few retailers will ride the growth wave through new entries or expansions this year. One example from the Expo was Kerr Drug, a conventional drug store operation based in Raleigh, N.C, that is unveiling two units targeting natural and organic products. Marketers should look for such retailers that weren't first movers but are poised to make an impact with new directions.