We recently attended the Healthy Foods International (first ever) conference and expo in Dallas. While we are waiting for conference materials to get posted to their website to deep dive on a few topics, we wanted to provide a top line summary of a few interesting things that were discussed between the manufacturers, retailers, distributors and marketers in attendance.
From the consumer side of things, a few interesting topics that arose were around mindsets and understanding. Going into this year’s economic slump, consumer wallets are often a consideration. But, as stated at the conference, healthy living and sustainability are a “state of mind not state of wallet.” Advocates that are committed to the lifestyle will prioritize spending and rationalize price in the category. What marketers and manufacturers should be concerned about is the average consumer’s confusion around organic, natural, lean and enhanced foods. Only around a 5th of the general population really understand healthy and sustainable living, and they’re the ones that will cause true growth and profit. Simple education and communication needs to be clearer, including store signage and placement.
To the general population, brands in the healthy/organic/natural category matter less than the industry would like to believe. We tend to think that smaller, local companies are the valued leaders, and big business are merely followers. While this maybe true for the opinion-leading 5th of the population, the general market just notices whether its says organic or not. And when it comes to price, where larger brands oftentimes offer lower prices, they can win.
On the manufacturer end of the spectrum, it was interesting to see the mix of home grown companies to huge corporate entities. Kraft, PepsiCo and Clorox were all there showcasing their latest healthy or green or natural products. On the smaller end of things were companies like Four Sisters and a Brother – Natural Bread Crumbs , a company started literally by four sisters and a brother from their own homes. There were a great many of these companies who were looking for their big break at this show to get distribution in new, larger retailers. Key talking points revolved around all-natural, organic, short ingredient lists (with nothing you couldn’t pronounce), and X servings of X. Surprisingly, weight watchers points values were a focus as well.
Another interesting trend readily apparent at this conference is the growth of pharma foods. Whether its milk with Omega-3s or pro biotic cheese, products are definitely aiming to do more for consumers than simply fill them up. This has led companies, like Cargill for example, to develop ingredients that can be added to any food to increase/add nutritional value. Will consumers start buying buy ingredient rather than by food or by brand?
Lastly, from the retailer angle, aside from what products to carry, the biggest debate seemed to be where to put them in the store. While there is a consumer demand for these products, it varies depending on the shopper of each individual retailer. Opinions seemed to be split of whether the store within a store approach is best or simple category integration is the right road. One argument is that shoppers are less likely to buy natural/organic when the price tag is twice that of the regular option. The other is that those who shop organic want to find it all in the same place.
All of these topics seem to beg the question – Is this category ready for the mainstream? Have we gone far enough with our core consumers that we can begin to focus on the general population? As this begins to happen with companies like Pepsico, who have the dollars to make anything mainstream, it will be interesting to see how the category will change and adapt in retail
– Contributed by Armand Parra and Darcey Kramer