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ORGANIC RETAIL INNOVATION Thursday, September 14, 2017 12:00 – 1:00 p.m. SPEAKERS Nancy Coulter-Parker, Principal, NCP Content + Consulting Jeremiah McElwee, SVP Merchandising + Private Label, Thrive Market Jeff Yorzyk, Director of Sustainability, Green Chef MODERATOR Becky Schilling, Editor-in-Chief, Supermarket News @OrganicTrade #ExpoEast #Organic
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Transcript of ORGANIC RETAIL INNOVATION - Home | OTA Thursday 317... · ORGANIC RETAIL INNOVATION Thursday,...
ORGANIC RETAIL INNOVATION Thursday, September 14, 2017
12:00 – 1:00 p.m.
SPEAKERS Nancy Coulter-Parker, Principal, NCP Content + Consulting
Jeremiah McElwee, SVP Merchandising + Private Label, Thrive Market Jeff Yorzyk, Director of Sustainability, Green Chef
MODERATOR Becky Schilling, Editor-in-Chief, Supermarket News
@OrganicTrade #ExpoEast #Organic
Organic is still growing…
“The organic industry maintained steady growth in 2016 with a rate of 8.4% compared to the almost stagnant 0.7% growth rate for overall food and non-food markets. Organic growth translated to $47 billion in sales.”
—U.S. Organic Industry Overview, OTA Organic Industry Survey 2017
Presenter
Presentation Notes
The organic food market grew at a rate of 8.4% compare to the 0.6% growth rate of overall food Organic non-food grew at a rate of 8.8% compared to an overall non-food growth rate of 0.8%
Where is organic growing?
Mass is leading the market
Presenter
Presentation Notes
Mass market retail now accounts for 54.7% of U.S. organic food sales (mass-market, club/warehouse, mass merchandiser) While natural and specialty retail account for 36.2% Share of sales of organic food has decreased in the natural and specialty retail channel, total sales are on the rise, and share remains strong for non-food organic products
Channel growth
The times they are a-changin’
Presenter
Presentation Notes
The biggest challenge natural and specialty retailers said they faced in 2016 was the low pricing of organic products in the mass-market channel—70% of those surveyed noted this as a challenge. 22% remarked that the lack of organic products that are exclusive to the natural retail channel pose a challenge
People are changin’ too
Presenter
Presentation Notes
The majority of shoppers don’t know what they are going to eat until an hour before they eat it. They don’t plan out a week’s worth of meals any more – they might look a day or two ahead Millennials don’t want to buy more ingredients than they are going to eat, which is why they like snacks and prepared meals
Reimagining the in-store experience
“It’s about the customer experience in addition to the product that sells. The only way the four-wall grocery concept survives is because of the experience in the perishable department.”
—Conrad Skelton, Lucky’s Market
“Customers are looking to discover…For the customer, it’s a lot less about price, but ‘what do I get from my experience in the store?’”
—David Chavez, UNFI
Presenter
Presentation Notes
The consumer’s desire for convenience, fresh and prepared meals means rethinking the in-store experience. …you can never order an experience online to get shipped to your house. Consumers are willing to pay for convenience and customization Packaged goods aisles are losing precedence to the deli, bakery and fresh and prepared foods that are typically found in the perimeter aisles
Growth & Survival • Customer service is still valued • Don’t be afraid to ask customers what they want • Create an experience—one based on transparency,
authenticity and even a little fun. • The natural channel is still the channel to which brands
bring innovation. The natural channel is more able and willing to try new things and support new ideas.
• Differentiate product offerings—not all companies can scale to mass retail
• New channel opportunities continued to emerge through convenience and drug stores, foodservice and the internet.
Presenter
Presentation Notes
Innovation…think biodynamics While we are an Oasis for customers. Our stores are very streamlined, we like to give customers a lot of space to shop, we don’t clutter up our aisles with case stacks and display tables. Clean shopping experience and that is one of the main reasons people love to come back. When they first experience it after Whole Foods or a conventional store. Whole Foods a lot of showmanship and spectacle, you can be wowed it can also be an assault on the senses. Our stores are the antithesis of that, we have an impeccable selection, myself and cohorts are meticulous about the ingredient standards that we apply to our sourcing and we are known for that. We are known for also having a very well eduated staff. There are a few chains and small to midsized in the country that can really tout that anymore. It’s something we pride ourselves in the education of our staff, not just in product knowledge, just foundational business knowledge, basically have a revolving book clubsi n the stores and our central office.
A story that counts…
“The biggest challenge is how to grow at a rate that allows for farmers to be paid fairly for the extra work they do in organic, that they deserve for farming organically while also assuring stability of supply, shortage vs. glut, spikes in prices versus drops in prices.”
—Matt Dillon, Clif Bar
Presenter
Presentation Notes
Stores making it work: Cambridge Naturals,
T he heal t h & We l lne s s
opportun i t y
03
Wellness is a massive secular trend...
$36BOrganic CPG
per year
13%Organic CPG
growth per year
VS. . %Conventional
Up from $B in $.B Projected
by
04
That still hasn’t gone fully mainstream.
$1.07 TConventional CPG
$36Bnatural/organic CPG
.% of totalCPG
05
Who is missing out?97% of American families…
%
% of families within drivingdistance of Whole Foods
%
% of families able to pay -%premium for organic groceries
%
06
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...but middle class Americans want to be healthier.
% of Americans who want products with fewer ingredients
%%
% of Americans considering health in their food selection
%%
91%of Walmar t shoppers say they
would buy organic i f i t were
af fordable
40 million Americans
now self- identif y as health conscious
Thrive Market members are...
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87 %Women
65 %Marr ied
64%Household
income<$100,000
46%South/Midwest
Meet a Member:
Alissa Mullen35 year old mother of 3 living in Portland, OR
- 3 orders to-date on Thrive Market- Referred by a friend on Facebook- Homeowner (home worth $350k)- College graduate - Drives: SUV and/or hybrid- Spends money on: Kids products Business products Sports/outdoors Home/garden Health and beauty Clothing Food/drink Subscription services- Shops online weekly- Grocery shops weekly- Cooks daily
Basics
TargetIkeaZulilyKohl’s StarbucksOld Navy
Top Retailers
Honest CompanySeventh GenerationApplegateGerberAnnie’s Homegrown
Top BrandsThe Ellen DeGeneres ShowGrey’s AnatomyNPRFood, Inc. Dr. OzFood Matters
Movies/TV/Media
Food BabeWellness MamaMommypotamusNourished KitchenNom Nom Paleo
Influencers/Blogs/Bloggers
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in troduc ing
T hr i v e mar k e t
010
A wholesale buying club for the world’s best natural and organic products
Always priced 25-50% off retail
Delivered fast and free over $50
Every paid member sponsors a membership for a low income family
We’re on a mission to make healthy living easy and affordable for every American family
011
Built a community of 4MM+ registered users and 1MM+ social media followers
Enrolled 400,000 paid members and given away 400,000 free memberships to families in need
Attracted investment from over 100 influencers in the health and wellness space with over 75MM collective followers
Created more than 500 pieces of inspirational written and video content viewed more than 20MM times and shared more than 5MM times
Built 700,000 sf of fulfillment centers reaching 80% of members in two-day shipping or less
Shipped over 2MM orders and 15MM healthy products, generating more than $150MM in sales ($42MM 2015, $109MM 2016)
Since launch in November 2014, Thrive Market has:
012
14
How I t Wor k s
15
. Curated assortment
. Members-only pricing
. Content that informs and inspires
. An authentic social mission
. Thrive Market Collection
16
1.
Curated Assortment
17
Thrive Market members trust us to bring them the highest quality organic and non-GMO products
- 4,500 SKU catalog based on exacting standards of quality, taste, and brand values (over 400 “never use” ingredients)
- Largest seller in the U.S. of exclusively non-GMO food
- Every product tagged on 140 meta-data categories enabling members to shop by their personal dietary preferences, nutritional requirements, and values
Nut Free Recyclable Locally Sourced Sustainably Farmed
Certified Organic Fair Trade Certified Certified Gluten-Free Certified Kosher
Raw Paleo High Fructose CornSyrup Free
Non-GMO
18
“I purchase from Thrive
because I trust that you
have the very best and
natural products of all
kinds.”
Sarah W. Green Bay, WI
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2.
Members-Only Pricing
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Thrive Market’s annual membership model powers the delivery of unmatched value to our community
- $60 membership enables wholesale pricing on entire catalog
- Every product’s price benchmarked to be at or below that of the conventional equivalent
- Brand partnerships facilitate member-only gifts and deals to drive discovery and additional member value
Today’sGift!
Extra
20% OffAll Epic Products
Shop Now
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$2.25Thrive Market
Pricing
$2.38Conventional
Product
$2.55Thrive Market
Pricing
$3.88Conventional
Product
$5.45Thrive Market
Pricing
$6.96Conventional
Product
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Chocolove - Dark Chocolate with Almonds & Sea Salt
Blue Diamond - Nut Thins with a Hint of Sea Salt
Simply Organic - Turmeric
Bragg - Apple Cider Vinegar
Seventh Generation - Free & Clear, Baby Wipes
Dr. Bronners - Sal Suds Liquid Cleanser
Avg. Discount to Retail
$3.99
$3.25
$4.79
$3.89
$5.05
$13.99
0%
$2.79
$3.31
$3.69
$2.99
$4.75
$13.36
12%
$2.59
$3.19
$3.69
$3.29
$3.99
$12.59
16%
$2.25
$2.55
$3.25
$2.55
$3.45
$9.99
31%
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3.
Content That Informsand Inspires
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Thrive Market isn’t just an online store; it’s a place where members come to get informed, inspired, and empowered to live healthier
- Thrive-only lifestyle content from top health and wellness influencers
- Hundreds of recipe and DIY videos viewed tens of millions of times
- Over 1MM monthly views to the blog
- Over 5MM viewed and 1MM liked pieces of content on
social media each month
26
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Original Recipe
Raw Honey Vitamin C GummiesDIY
Honey-Lemon Cough Syrup
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2M Views 2.6M Views
Recipe: Blended Iced Coffee Facebook Live: Mark Sisson
Paleo Milk-and-Cookie Shots Recipe: Raw Chocolate Protein Balls29
Isabel De Los Rios Tony Robbins Wellness MamaLauren Geertsen Chris Kresser
Mark Sisson Jillian Michaels Food Babe Dr. Mark Hyman Deepak Chopra
Dr. Daniel Amen Marc David Food MattersPaul Hawken Kris Carr
Mike Geary Nick Ortner Robb WolfMichelle Tam JJ Virgin
75MM 1,500,000 members At 2% Audience Penetration
Total audience of current influencer investors
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4.
An AuthenticSocial Mission
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Millennial consumers seek authenticity and value-alignment in the companies they buy from; at Thrive Market, they get something more - a community that not only shares, but acts on those values
1. Environmental Sustainability
- 100% post consumer recycled packaging- Carbon neutral company- Leeds gold certified Western fulfillment center
2. Thrive Gives
- Free Gives memberships donated to a family in need for every paid member on the site
- 5x typical donate-at-checkout conversion rates ($750,000 raised for Gives member shopping budgets since May, 2016)
3. Social Advocacy
- Thrive Online Food Stamps petition - received 300,000+ signatures in 10 weeks, leading the USDA to announce a pilot program for 2017
- Partnership programs with the Pine Ridge Indian Reservation; Flint, Michigan relief effort; and others.
32
ThriveAction.org Case Study:
Online Food Stamps Petition
Background: More than 40MM Americans are on food stamps; today they cannot be used to buy healthy food online...
Goal: Leverage our influencer network and expertise in content marketing to raise awareness and galvanize support for making food stamps usable online
Results26 viral videos with influencers and celebrities
50+ major press hits
10MM+ of shares across social media
350,000 petition signatures in 6 weeks and an agreement by the USDA to pilot online food stamps in 2017
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+
+
=
34
5.
Thrive Market Collection
35
Always:
Certified non-GMO our sourced from country of origin that does not allow GMOs
Free of synthetic ingredients, artificial sweeteners, preservatives, colors, flavorings
Certified Fair Trade or equivalent ethical sourcing verification
Produced in SQF Level 3 or cGMP facilities
In 2016, Thrive Market launched nearly 100 Thrive Market branded products (9.5% of sales).
In 2017, we will launch over 300 more (25% of sales est.).
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ThankYou
RETAL INNOVATION:ONLINE ORGANIC MEAL KITS
J E F F Y O R Z Y KD I R E C T O R O F S U S T A I N A B I L I T Y
ORGANIC RETAIL INNOVATION
QUESTIONS?
SPEAKERS Nancy Coulter-Parker, Principal, NCP Content + Consulting
Jeremiah McElwee, SVP Merchandising + Private Label, Thrive Market Jeff Yorzyk, Director of Sustainability, Green Chef
MODERATOR Becky Schilling, Editor-in-Chief, Supermarket News
@OrganicTrade #ExpoEast #Organic
