Fueled by pandemic, organic gains consumer traction along with transparency, responsible sourcing

03-Nov-2020 - Last updated on 03-Nov-2020 at 14:46 GMT

Source: Getty/Chris Clinton

The light shined by the pandemic on the toll the food system is taking on the environment and the people who grow, process and deliver food is turbo-charging already mounting consumer demand for products that are organic, responsibly sourced, clean label and transparently produced, according to SPINS data and analysis from New Hope Network.

The strain on the supply chain revealed by the early days of the pandemic also is speeding adoption of emerging consumer trends, including regenerative agriculture, traceability and more narrowly focused commitments to one-dimensional ag improvements, add Kathryn Peters, executive vice president of business development at SPINS, and Eric Pierce, VP of Business Insights at New Hope Network.

Speaking during New Hope Network’s virtual Spark Change 2020 event, which was created after safety concerns during the early days of the pandemic sidelined Expo West in March, Pierce explained that New Hope and SPINS combed through the NEXT Trend Database and Guidebook from Natural Products Expos, recent investment activity and consumer engagement through social and mass media to identify three types of trends that retailers – and brands – can leverage to better engage with consumers and drive loyalty and sales.

Pierce explained these include power trends, which are high growth, high volume trends that retailers should have on shelf to remain competitive; emerging trends, which are high growth but low volume and allow retailers – and especially smaller retailers – to differentiate themselves by engaging with consumers about what’s new and where the market is going, and mature trends that often are foundational for the other two types of trends but which also should be monitored closely to ensure their sales continue to justify their shelf space.

Engaging ‘power trends’

Among the power trends uncovered by New Hope and SPINS, those with the most innovation, investor interest and to a slightly lesser but still high extent consumer and media engagement included organic, responsible sourcing, transparency and clean label.

Within these three measures, organic saw innovation tick up about 60%, investment around 35% and consumer and media engagement 39%, according to Pierce.

Retailers hoping to leverage organic can do so by increasing their mix of both branded and private label organic offerings, which Peters said, are demonstrating “very strong overall performance withing food and beverage.”

She noted in the past 12 weeks, dollar volume of organic food and beverage climbed 12.1% -- which is down slightly from a 14.2% spike during the past 24 weeks but on trend with the past 52 weeks, which levels out at about 12.4%, over the same prior year periods.

This curve indicates that organic products performed well in the early pandemic stock-up phase compared to conventional counterparts, with most consumers concentrating on nutrient dense categories initially and then later expanding to cleaning and household goods as well, said Peters.

She added that organic’s performance in the mid-summer faltered slightly due to supply chain shortages, but that it has since recovered. Big category winners include organic shelf stable seasonings, which are up 66.3% year-over-year compared to only 37% for conventional. Growth of organic tofu, baking mixes and flour, pickles and olives and tea and coffee also outpaced conventional counterparts by double digits.

“It is great to see the really mainstream consumer and investment communities starting to recognize the power and strength of organic,” which “often doesn’t get enough credit in a way because it is so foundational,” Peters said.

As such, she added, organic has paved the way for increased interest in other related call-outs during the past 12 weeks, including year-over-year dollar growth of products making claims related to animal welfare, which is up 17.2%, no hormones added (up 12.6%), antibiotic free (up 11.6%) and labeled non-GMO (up 10.7%).

Responsible sourcing and increased transparency become table stakes

Organic also paved the way for increased consumer interest in responsible sourcing, said Peters, who noted 88% of shoppers said they would like brands to be more environmentally friendly and ethical and 70% said they would pay more for a sustainable product.

Many consumers use certifications as a shortcut for determining if a product is sustainable or ethical, making them important for brands and retailers, according to Pierce. But, he added, at this point verification is a maturing trend – meaning it no longer is a strong point of differentiation, but rather table stakes for many consumers.

That said, some certifications are gaining traction and could be influential points of differentiation for retailers or brands, said Peters. Specifically, she noted the Certified Detox Project, which verifies something is glyphosate free, has see sales growth increase 58% in the past 52 weeks with the top categories by sales volume including plant-based milk, oils and vinegars, and juices and functional beverages.

Certified B Corp also is gaining traction on the strength of 90% of consumers saying it is important to them that brands take care of their employees – even in tough times, Peters said.

She also noted that these certifications likely are more difficult for consumers to grasp and may require additional education on the part of brands and retailers, but she added, engaging consumers in discussions and helping them learn is help build longer-term consumer loyalty.