Natural and Organic Products The Halo Effect

By Jenny McTaggart

hile U.S. grocery shoppers are certainly concerned about inflation, it’s not stopping many of them from seeking out and purchasing organic and natural products. With a halo effect around better health and a greener environment, these items are being viewed in a more positive light than ever — especially among younger consumers. Even during times of economic uncertainty, retailers can grow their sales and lay claim to a piece of this lucrative business by honing their pricing strategies and offering more information and better transparency to their increasingly discerning shoppers.

Today’s consumers have no shortage of places to shop for organic or natural products, whether they be food, beverages or nonfoods. Mass merchandisers like Walmart and Target feature them in-store and online, Amazon owns one of the premier chains for organic and natural products (Whole Foods Market), traditional grocers carry them, a growing number of regional chains with smaller footprints are dedicated to them, neighborhood natural food stores provide them to their loyal followings, and now new online channels like Thrive Market offer to customize assortments and deliver them to consumers’ homes.

In short, it’s not easy to compete in the world of organic and natural retailing today. But there’s a broad swath of shoppers with different needs and attitudes who are either already looking for these products or could be easily persuaded to try them. Therefore, retailers would be wise to think about how they can further implement natural and organic products into their merchandising plans while staying true to their brand missions.

Andrew Henkel, EVP of retail for Chicago-based SPINS, points out that natural products continue to be a growth engine for mainstream supermarkets, and that fact has increased the urgency for both health-oriented and mid-market retailers to build a uniquely differentiated assortment. “Loyalty is built on grocers having assortments that align with the unique needs of their shoppers, and the most successful grocers are finding ways to more readily connect their shoppers to their preferences,” notes Henkel.

Organic Sales Stabilize After Pandemic

The total sales of natural and organic products aren’t easy to measure, especially since natural products aren’t as readily defined (while the term “organic” is aligned to a federal standard, the FDA doesn’t have a formal definition for the

Key Takeaways

Natural and organic items received a huge lift during the pandemic, when shoppers couldn’t always find conventional products at their regular stores. Education, nutritional counseling and competitive pricing can encourage consumers to purchase more natural and organic products.

With health and wellness remaining a key priority for shoppers, grocers need to realize premiums on unique natural/ organic products while ensuring that commoditized offerings in this space are affordable.