BOULDER, COLO. – Makers of natural, organic and functional food and beverage products have opportunities in the coming year to help consumers adopt healthier habits, said Carlotta Mast, senior vice president and market leader at the New Hope Network.
“2020 is a year full of challenges, but natural and organic brands face a bright future,” said Ms. Mast. “We are in a position where a growing number of consumers are going.”
Seventy-seven percent of Americans surveyed last year indicated personal health was becoming more important amid the pandemic, Mast said during a webinar on March 2 as part of the New Hope Network’s Spark Brand Success digital event. However, he noted, many cope with heightened stress by consuming more alcohol and “fast food,” reducing exercise and feeling more anxious.
“The question, of course, is how can our industry and brands help people return to healthier habits?” Ms Mast said. “We know they want it, and I think this is our big opportunity for 2021 and beyond.”
Sales of natural, organic, and functional food and drinks in the United States grew 13% to $ 186 billion by 2020, according to estimates from the New Hope Network.
“Staple foods in the kitchen, frozen food, and meat, fish and poultry, as well as meat and plant-based dairy alternatives, are all categories that experienced the highest growth rates last year,” said Mast.
“How can our industry and brands help people return to healthier habits? We know they want it, and I think this is our big opportunity for 2021 and beyond. “- Carlotta Pole, New Hope Network
Organic, usually a challenging category during times of economic turmoil, is also growing; Organic food and drink sales in the US were up 13% to $ 47.9 billion.
“Almost every category of organic food and drink did well in the US last year, including dairy products, which experienced some bottlenecks over the past few years, but last year this category benefited from consumers hoarding organic milk during the pandemic,” Ms. Mast said.
Sales of functional foods and drinks increased 9.4% to $ 78 billion last year, led by growth in the stable, frozen, and snack categories.
“People continue to embrace the food as medicine trend and choose food and beverage products that provide true health and functional benefits,” said Ms. Mast. “The functional ingredients that most attracted consumers last year were those that support immune health such as mushrooms, ingredients to support the body’s stress response such as adaptogens, as well as collagen, nootropics, and healthy fats.”
Sales of conventional food and beverages increased 8.6% last year, said Ms. Mast.
“We anticipate that we will see sales growth in conventional food and beverage continue to lag significantly behind natural, organic and functional as we emerge from the pandemic and retailers large and small continue to provide more room for our industrial products,” said Mast. .
The health attribute is still booming, said Kathryn Peters, executive vice president of business development at SPINS. Products featuring claims such as gluten-free, non-GMO, organic, plant-based, grass-fed and cage-free all posted double-digit dollar growth last year.
Immune-boosting drinks and reducing stress and anxiety continue to gain traction, prompting interest in ingredients such as elderberry, melatonin, chaga mushroom, and ashwagandha.
Plant-based products are popping up in new categories, from frozen appetizers to whipped dessert toppings.
“Plant-based products continue to grow at about twice as much as their main product,” said Ms. Peters. “This is a very fast-paced trend and one that we anticipate will continue as more and more studies reveal its good for the body and good for the earth.”
Shoppers are looking for maintainable foods that feature whole foods, minimally processed foods, fewer additives and less sugar, he said.
“We think buyers … are looking for a new meal plan, one that we can adapt to our own strategies and needs that give us a greater chance of success,” said Ms. Peters.
Frozen food answers the call for convenience and health, as consumers are tired of home cooking, Ms. said. Peters.
Social and economic sustainability are issues driving purchasing decisions. Ninety percent of consumers say it’s important that brands support and treat employees well. Buyers have also shown an interest in supporting underrepresented businesses, he said.