Packaged Facts: Natural, organic segments are a multi-billion dollar business
Oct. 7, 2016
by MEAT+POULTRY Staff
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ROCKVILLE, Md. —A new report by Packaged Facts concludes that health and wellness, safety, social impact, experience and transparency are important factors in consumers’ food purchasing decisions.
"From freshness to health ingredients to transparency of sourcing, and eco-conscious business models, there's no denying that today's core consumer values increasingly center around what the natural and organic food and beverage market has been offering for years," said David Sprinkle, Packaged Facts research director.
In the latest Natural and Organic Foods and Beverages in the U.S., 5th Edition, Packaged Facts found that total US retail sales of natural and organic foods and beverages through all retail channels will reach $69 billion by the end of 2016. That's an 11 percent gain over 2015 sales of almost $63 billion and 32 percent higher than sales five years earlier.
During the 2012-2016 period, sales rose by a compound annual growth rate (CAGR) of 7 percent. The growth of natural/organic products outpaced that of total food and beverage sales, which have been relatively flat throughout the period.
Looking forward, Packaged Facts projects that the retail market for natural and organic foods and beverages will grow by almost 70 percent between 2016 and 2021.
Over the past 18 months several prominent brands have made natural and organic claims on their products. Here are a few examples:
- Campbell Soup announced plans to remove artificial colors and flavors from nearly all its North American products by the end of fiscal 2018.
- Mondelēz International made a commitment to remove artificial colors and flavors from many of its packaged food brands by 2020.
- ConAgra Foods introduced three new organic canned tomato products—diced tomatoes, tomato sauce, and tomato paste—under its Hunt's brand.
- General Mills has already made five of its top-selling Cheerios flavors gluten-free and intends to transition two more Cheerios varieties to gluten-free in fiscal 2017.
- Kellogg Co. is working to eliminate artificial colors and flavors from its Froot Loops, Apple Jacks, and other branded cereals by 2018.
- Kraft Heinz quietly removed artificial colors, flavors, and preservatives from its flagship macaroni & cheese and consumers—to the company's credit—did not notice the difference.
- The Hershey Co. introduced Simply 5 Syrup, a chocolaty syrup made from just five ingredients—cocoa, water, pure cane sugar, organic invert cane syrup, and natural vanilla.
- WhiteWave Foods' International Delight brand launched a new line of coffee creamers called Simply Pure, made with skim milk, cream, cane sugar, and three natural flavors (vanilla, caramel, or hazelnut).
- Mars Inc. pledged to remove artificial colors from all its human food products over the next five years, as part of its commitment to meet evolving consumer preferences.