What’s Really Driving Health and Wellness Trends and How ... · Smartphones Make Shopping Easy...

What’s Really Driving Health and Wellness Trends and How to Remain Relevant on Shelf

Natural is the R&D of the CPG industry. Natural organic products are driving sustainable category growth across all channels. Natural and organic consumers are not motivated by price alone. They base their buying decision on transparency, clean-label ingredients that not only meet their nutritional needs, but products they can trust. These consumers do their research, going beyond the four corners of the package. They vote with their dollars, purchasing products from sustainable and mission-based brands. Brands that provide true innovation, are closely aligned with their core customer, and remain true to their mission are steadily capturing market share. Learn what is really behind these trends and how they are winning at shelf.

Empowering Brands | Raising The Bar

Empowering Brands | Raising The Bar

Daniel Lohman, CPSA

Contributor

BRAND SECRETS AND STRATEGIESOrganic & CPG Industry

Strategic Advisor

Consumers Are Confused

=

?

A. NaturalB. Non-GMOC. Organic

Which is best and why?D. Clean Label

Which is healthier? What do they mean to you?

Consumers Are Confused About Organic

What Does The Core Natural Shopper Look Like?And why does this matter?

We are not clones!

=We want quality over price

“Have you ever gotten a great deal on something

you didn’t like”Committed natural

shoppers do not settle. They want what they want

• True innovation is fueling sustainable growth in every category!

• True innovation is putting the shoppers needs first and developing products that fully meet their needs

• Natural products are at the heart of the innovation that is resonating with shoppers

=

Innovation Is Key To Growth

Transparency Is Key

Transparency Matters!

• The core natural organic shopper carefully reads labels, they do not settle for products that do not fully meet their needs

�8

Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources : Healthy_Living_The_New_Face_of_Healthy_Ageing

Attitudes Are Driving Change•Shoppers are looking solutions that help with healthy aging

•There is a direct correlation between consumers choosing products that support both prevention and a cure

•Shoppers are actively looking for healthy products to replace and reduce the need for prescription medications and excessive doctor visits

�9Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources : Healthy_Living_The_New_Face_of_Healthy_Ageing

What Consumers Are Shopping For

�10

Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources : Health_and_Wellness_in_the_US

• Shoppers want healthy alternatives • They want products they can trust that are Free From and

Organic

Healthy Solutions Are The Future Growth Driver In CPG

• Health focused solutions should continue to accelerate globally • Organic and Free From are the primary growth drivers

�11Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources: Health_and_Wellness_in_the_US

�12

Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Shoppers Want Vitality!

• Shoppers are actively searching out products that promote health and vitality - products that enhance quality of life!

• Shoppers want to live more active lives, they want to feel better : Health_and_Wellness_in_the_US

�13Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Health Focused Solutions Growth Will Accelerate

• These trends are forecasted to accelerate as shoppers live longer • Shoppers are proactively seeking healthier more active lifestyles • These health trends reduce the need of “reactive” solutions -

problems to avoided like high blood pressure, obesity, diabetes, etc: Health_and_Wellness_in_the_US

Consumers Are Active

• Activity becomes less intensive as consumers age

�14Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources : Healthy_Living_The_New_Face_of_Healthy_Ageing

}

}

• Exercise habits change as we age

• Good nutrition plays an important role in healthy lifestyles

Copyrig

ht©

2015The

Nielse

nCo

mpany.Con

fiden

tialand

proprietary.

�15

ALMOST4OUTOF10SUFFERFROMANAILMENTButmanyturntofoodasmedicinetohelpmanageoverallhealth

Source:WorldHealthOrganization;CentersforDiseaseControl2012NielsenAilmentPanel2015

Includingsomeoftheforemostcausesofpreventabledeath…

heartdisease,stroke,type2diabetes&certaintypesofcancer

39%Sufferfromanailment

50%Donotseek

medicalattentionTheyturntoOTCproducts,exercise,andbettereatingtoimprovetheirsituation

75%believetheycanmanagemanyoftheirhealthissuesthrough

propernutrition

Copyrig

ht©

2012The

Nielse

nCo

mpany.Con

fiden

tialand

proprietary.

�16

SHOPPERSAREACTIVELYCHOOSINGBETTEROPTIONS

Source:Nielsentwoweekonlinesurvey(April2016)of1176respondents

53%willpaymoreforfoodsthatpromotehealth

benefits

48%chooselocal,naturalandorganicwhen

possible

40%arewillingtosacrificetasteforahealthier

option

“Fountain Of Youth” Is Important

• Consumers continue to search for the “Fountain Of Youth” in healthy products

• Shoppers want to look and feel healthy and vital

• The “Fountain Of Youth” is found within and it radiates out

• Natural organic products offer the promise of better nutrition focusing on “you are what you eat”

�17

Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources : Healthy_Living_The_New_Face_of_Healthy_Ageing

Copyrig

ht©

2015The

Nielse

nCo

mpany.Con

fiden

tialand

proprietary.

�18

CONSUMERSARESEEKINGOUTHEALTHIERFOODOPTIONS

Source:Nielsentwoweekonlinesurvey(April2016)of1176respondents–chgvs.2014

66%EATHEALTHIERNOWTHANBEFORE

64%Trytobuyhealthierfoods

60%Qualitytrumpsprice

Doonlineresearchonnutrition,fitnesstips,healthyrecipes57%

Copyrig

ht©

2015The

Nielse

nCo

mpany.Con

fiden

tialand

proprietary.

�19

BOOMERSDRIVEDEMANDACROSSHEALTHINGREDIENTSFiberisthemostimportantingredientforBoomers

%MillennialsandBoomersindica:ngtheywantmoreofthefollowing

Fiber

An:oxidants

Hearthealthyingredients

Vitamins/minerals

Omega3's

VitaminD

Calcium

Wholegrains

Healthyoils/fats

Protein

43%

49%

53%54%56%56%57%57%57%

62%

37%

26%

35%38%37%

34%

38%

30%33%

38%

Millennials Boomers

Source:NaturalMarketingInstitute,allrightsreserved

Copyrig

ht©

2015The

Nielse

nCo

mpany.Con

fiden

tialand

proprietary.

�20

+25%CAGR+34moreitems

ANCIENTGRAINS

+7.6%CAGR+100moreitems

NOARTIFICIALCOLORS/FLAVORS


GMOFREE


GLUTENFREE


NOHIGHFRUCTOSECORN

SYRUP

+3.3%CAGR+645moreitemsKOSHER

+11.7%CAGR+239moreitemsNATURAL

+15%CAGR+117moreitemsORGANIC

+3.9%CAGR+170moreitemsSOY


NOARTIFICIALSWEETENERS

BIGGESTANDFASTESTGROWINGH&WCLAIMS

TOTALFOOD

HEALTHYCLAIMSAREGROWINGINSALES,ANDINITEMCOUNTS

Source:NielsenxAOC.PeriodEndingDecember26,2015;growthsince2012highlightedclaimspresentin>75%categories

Mainstream Retailers Sell The Most Natural Organic Products

• Mainstream represents the largest share of natural organic products

Copyrig

ht©

2015The

Nielse

nCo

mpany.Con

fiden

tialand

proprietary.

�22

WITHWELLNESSANEWFOCUS,FRESHANDHEALTHYCANBEFOUNDANDPURCHASEDEVERYWHERE

Source:Source:NielsenHomescanTotalShopperViewSpecialtyPanel,

SHAREOFCHANNELSHOPPERSPURCHASINGFRESHWITHINEACHCHANNEL

94%VALUEGROCERY 89%PREMIERFRESH

GROCERYSEGMENTS

CONVENIENCE/GAS

34%

WAREHOUSE/CLUB

89%

MASS/SUPERCENTER

85%

GROCERY

99%

DRUG

21%

Shoppers Are More Connected • Consumers use technology to aid in

purchase decisions • Brand messaging needs to extend

beyond the four corners of the package

• Consumers want solutions that make shopping easy and convenient • This includes automatic checkout

• Like Amazon • Digital payment

• Apple and Samsung Pay • Subscription options

• Like Amazon subscription • One-stop-shopping

�23Source: Euromonitor International Global Trends Survey 2017

• Shoppers have choices! • Traditional continues to be

important to shoppers • Experience Matters! • Ease of shopping drives

purchasing habits • 47% of global connected

consumers want to see before they buy

• 83% expect to purchase in-store


The Shopping Experience Is Important

Smartphones Make Shopping Easy• The shopper journey is changing • Consumers use their smartphone to

make purchases • Shoppers use smartphones to

research products before buying • Cart Abandonment is an issue as

consumers want to to see and try-on products before purchasing

• Selling extends well beyond the register - it includes input from friends, families, and other influencers


Personalization Is Important

• Shoppers want the shopping journey to be focused on their specific needs • Personalized shopping experiences are the key to sustainable sales

�26

Source: Euromonitor International Global Trends Survey 2017

Belief Drives Choices

�27

• Young shoppers are taking the lead when it comes to purchases driven by values and beliefs

• Natural organic products frequently support important causes that resonate with consumers

• Shoppers choose retailers that align with their core values

• Shoppers want to feel good about their purchase decisions


Subscription Services Offer Convenience

• Shoppers want convenience! • Subscription services continue to

gain in popularity • Subscription services appeal

most to younger shoppers

�28

Subscription Service Use by Generation, 2017


• Shoppers want what they want - more importantly they want brands and retailers who listen to their needs


Balancing Privacy With Convenience Continues to Be Challenging

Consumers Shop Multiple Channels

The Share Of Organic Is Growing In Retail

•Organic sales are up in both food and non-food. •The share of organic products continue to increase across the entire

store�31

SOURCE: ORGANIC TRADE ASSOCIATION’S 2017 ORGANIC INDUSTRy SURVEy CONDUCTED 2/2/2017–3/31/2017 ($MIL., CONSUMER SALES).

Share Organic

Shoppers Are Willing To Pay More For What They Want

Natural Organic Overview Total US Food sales are up +1.9%

Total US Natural/Organic sales are up +11.0%

Natural Organic sales represent just 7.7% of total US food sales

Source: Nielsen Total US xAOC Latest 52 Wks - W/E 01/23/16. All insights above come from Nielsen Answers Total US Food, Drug, Mass, Walmart, Sam’s, BJ’s, Dollar Stores, and Convenience.

Total US Food sales without natural organic are up +1.2%

Natural organic sales are responsible for the sustainable sales and profit growth in total US food!

Total US Natural/Organic Dairy sales are up +12.1%

Total US Dairy sales are up +1.5%

Natural Organic Dairy sales represent just 9.8% of total US food salesTotal US Dairy sales without natural organic are up +0.5%

Fresh Is More Important Than Natural

Similar Product Themes Cross All Categories

Organic Is Growing Across All Departments

Produce Is The Gateway To Center Store

�38

TotalProduce–sharevsallotherperishablesdepts.

ProduceDept.–organicsizeandtrend

• Organicproduce$4.9billionin2017retailchannelsales-$4,233perstoreperweek

�39

2017vs.2016+7.3%

OrganicProduceDollars

Natural

Natural organic products are merchandised in a separate area

Store Within A Store

Natural

Natural organic products are merchandised next to mainstream products

Organic produce is the entry point for healthy products

Integrated Segregated


Natural organic and mainstream products are merchandised side by side in separate sections


Integrating natural organic and mainstream products together allows shoppers to make the best choice to meet their needs. This is how you grow category sales.

Recommended product

placement

RecommendationsThe key to your success depends on how well you satisfy your shoppers needs. Shoppers can’t buy what they can’t find

Product placement is key for every item and brand This includes every place consumers can purchase your brand

Integrate natural and mainstream together - focus on the way consumers shop the category Commitment to develop a collaborative relationship between retailers and brands

Become an expert on the category shopper, trends, and your completion Take an active role in helping your broker/distributor manage and grow your business. Develop scorecards to hold them accountable for your success and growth Education: Commit to developing your category management, sales management and trade marketing management teams by teaching them the best practices to help grow your business sustainably

To Download this presentation: To learn more about the Natural Organic shopper, listen to the BRAND SECRETS AND STRATEGIES podcast, visit CategoryManagementSolutions.com (CMS4CPG.com)

categorymanagementsolutions.com/CMA2018

http://CategoryManagementSolutions.com

http://CMS4CPG.com

https://categorymanagementsolutions.com/CMA2018

What’s Really Driving Health and Wellness Trends and How ... · Smartphones Make Shopping Easy...

Documents

Transcript of What’s Really Driving Health and Wellness Trends and How ... · Smartphones Make Shopping Easy...