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The Health and Wellness Shopper

JAY JACOBOWITZ has a word of advice to grocery stores considering targeting the health and wellness shopper: Do it already. If you are not going to have a health and wellness initiative in your operation, you're going to miss the boat, Jacobowitz, president of Brattleboro, Vt.-based natural products consultant Retail Insights, told SN in a recent interview. You cannot be on the wrong side of this

Jon Springer, Executive Editor

May 10, 2010

5 Min Read
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JON SPRINGER

JAY JACOBOWITZ has a word of advice to grocery stores considering targeting the health and wellness shopper: Do it already.

0510snhealthshopper.jpg

<b>Traits:</b> Concerned about preventative care; taking personal responsibility for own health.<br> <b>Habitat:</b> Organic and natural retailers, and conventional chains like Hy-Vee that take a proactive approach to nutrition and wellness.

“If you are not going to have a health and wellness initiative in your operation, you're going to miss the boat,” Jacobowitz, president of Brattleboro, Vt.-based natural products consultant Retail Insights, told SN in a recent interview. “You cannot be on the wrong side of this issue. That's the direction that food is going in.”

Jacobowitz supports his contention by citing figures illustrating natural and organic foods — which currently comprise only about 6% of the total retail food market — growing by around 8% annually, vs. 1% growth for all conventional foods, over the last 30 years. “If you extend those trend lines out the next 30 years, writ large,” he said, “food with good ingredients become half the industry.”

The good news, Jacobowitz notes, is that all that growth is pretty much up for grabs, which is why retailers need to develop strategies to capture the shopper motivated by health and wellness, and understand the forces that are driving that growth.

“If you take a look at the 40,000-foot view and fly over, you'll see overall food sales are around the flat line, but as you segment to the good ingredient side you'll see robust growth,” Jacobowitz said. “As you move down to ground level and walk into the store, you'll see the battleground is very messy and lines are blurry. Everyone is in the game. And the battle is going to be bloody and messy.

“Market share for health and wellness is up for grabs.”

Some chains are making aggressive plays for it. Sprouts Farmers Market, a fast-growing natural chain based in Phoenix, is focused on capturing natural and organic growth where it happens — with consumers making the switch from conventional foods and conventional stores, according to Doug Sanders, president and chief operating officer of the 44-store chain.

“The percentage of the consumer base that are actively seeking a healthy lifestyle has increased in the last two to three years,” Sanders told SN in an interview. “We kind of position our company as a transitional market — for people who want to get into a healthy lifestyle but don't know how to do it.”

Sprouts, which was founded in 2002, tended to draw an older “health food” shopper base in its early days, Sanders said. “Today, it's really become more accepted among all age demographics. We have families shopping, kids, adults. It ranges from someone living a full-on healthy lifestyle to someone who's just wanting to learn more about it to someone who's just shopping for produce.”

A growing awareness of health care — and of health care's cost — is among the major factors influencing consumers to shop for food with health and wellness in mind, observers said.

“The trend that's really taken off in the last year is the idea of the consumer taking a personal look at the whole idea of health care, asking themselves: ‘How am I personally responsible for my own heath care?’” Sanders said. “I think we are seeing a more proactive approach to staying active and staying fit that centers around diet and exercise. So we're seeing a big influx of interest in shoppers interested in getting a healthy lifestyle, improving their diet and wanting to know more about food.”

At Sprouts, in-store events and product demonstrations help reinforce its health and wellness positioning. Its stores also carry extensive selections of vitamins and supplements and bulk foods.

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Among conventional retailers, Hy-Vee, West Des Moines, Iowa, and Safeway, Pleasanton, Calif., are among the leaders in marketing to the health and wellness shoppers, Jacobowitz said. Hy-Vee has effectively employed nutritionists to get shoppers involved in fitness programs tied to diet. Safeway, like Whole Foods, has made employees advocates of the healthy lifestyle by incentivizing them to take preventative health measures. This has the added benefit of helping to control the company's own health care costs.

Jacobowitz notes that improved sales among vitamins and supplements illustrate some of the “perverse effects” of the economy that has actually helped grow the natural and organic field last year, despite concerns over pricing.

“One of the perverse effects of the recession is the consumer who says, ‘I'm in fear of losing my job and if I lose my job I lose my health insurance, so I need to be doing some preventative wellness — make sure I don't get sick, that I won't need a doctor's visit,’” Jacobowitz said. “They're taking what I call a multivitamin insurance policy, doing all they can on the preventative side to ensure their health.”

The health and wellness trend, he added, has held up to the economy because its adoptees have committed to the lifestyle. The economy has only made them try harder to maintain it.

“People who are wanting to achieve well-being are not trading a natural product for something with hydrogenated oil because they can't afford it,” Jacobowitz said. “Maybe they are buying private label or taking it from the food-away-from-home budget. I see the recession actually benefiting the retailers who are positioned correctly in the food area because people are eating a couple more meals at home per week than out, and those ingredients have to come from somewhere.”

About the Author

Jon Springer

Executive Editor

Jon Springer is executive editor of Winsight Grocery Business with responsibility for leading its digital news team. Jon has more than 20 years of experience covering consumer business and retail in New York, including more than 14 years at the Retail/Financial desk at Supermarket News. His previous experience includes covering consumer markets for KPMG’s Insiders; the U.S. beverage industry for Beverage Spectrum; and he was a Senior Editor covering commercial real estate and retail for the International Council of Shopping Centers. Jon began his career as a sports reporter and features editor for the Cecil Whig, a daily newspaper in Elkton, Md. Jon is also the author of two books on baseball. He has a Bachelor of Arts degree in English-Journalism from the University of Delaware. He lives in Brooklyn, N.Y. with his family.

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