The natural product industry is expected to hit nearly $320 billion in 2024, as each natural channel registered dollar growth except regional and independent grocers, according to SPINS data. The natural, conventional multi-outlet and convenience channels grew 3.7%, 1.6% and 1%, respectively, according to SPINS data for the year ending Oct. 6.
More than 2 million buyers started shopping the natural aisle, and trips per buyer increased 6%, according to SPINS data for the 12 weeks ending Oct. 6. Additionally, Gen Z shoppers are gravitating to more natural options and are projected to hold 47-60% of the household buying power by 2030, according to SPINS,
“No matter how you slice and dice the data, we are really seeing strong growth, and I think even in the specialty and wellness product segment, there are a lot of people who may not be living a fully natural lifestyle, but are kind of dabbling, and this creates that opportunity for them with more accessibility and a better price point to start to get into this natural industry. So across the board, I think it is just a very positive story,” elaborated Marc Nehring, senior director of growth solutions at KeHE.
Functional beverages ‘beyond just a nutrition shake or a meal replacement drink’
Energy and sport drinks, refrigerated plant-based milk, cold cereal, wellness and snack bars, and frozen breakfast foods were the categories that saw the largest share of items, according to SPINS Natural Channel and Multi-Outlet data.
Consumers are seeking functional beverages that provide anti-aging and fitness benefits, while also demanding them to have enhanced fibers, superfoods and added minerals, vitamins and electrolytes, Nehring shared.
Additionally, 58% of consumers want nutritional drinks to serve as a meal replacement while 32% use them to stay full between meals, according to a Mintel report cited in the webinar.
“We are really seeing a lot of growth in these functional beverages that can easily fit into a daily wellness routine. But beyond that there are lots of other ways that consumers are using beverages, beyond just a nutrition shake or a meal replacement drink. We are seeing a lot of growth in everyday hydration — that is a huge trend right now,” said Nehring.
Plant-based market shows ‘very mixed’ results
The plant-based segment of the natural category “is very mixed,” but protein powder, coconut milk and functional beverage are growing as refrigerated and frozen meat alternatives and alternative meat snacks decline, Nehring noted.
“As you look at the plant-based segment over the past couple of years, it really has been getting a bad rap. The market really peaked in 2020 and it has been very difficult to maintain that growth in the total segment. But I think it is much deeper than that because there are certain segments that continue to grow, and it really kind of ebbs and flows in terms of the category,” he elaborated.
However, consumers are still seeking to limit meat consumption and younger consumers are embracing a flexitarian lifestyle, Nehring said.
“The thing that we need to keep in mind is, if you look at those key consumer behaviors, we are looking at about 24% of consumers that identify as flexitarian or vegan or vegetarian, and a quarter of consumers say that they are actively trying to eliminate animal products entirely,” he added.
