Acosta Study Reveals Organic Produce Drives Incremental Store Sales
Sixty five percent of traditional retailer grocery shoppers said organic produce is the key gateway for them to begin exploring a store’s other organic and natural offerings – products that are beyond just the perimeter of the store, according to a study by Acosta Inc. The report, Back to our Roots: The Rise of the Natural/Organic Shopper indicates growing organic/natural purchases include dairy, soup, pastas, oatmeal and other cereal products.
Produce is the number one “must have” organic or natural item in the report. Other items cited as “must haves” include dairy, juice, mean and snacks.
Why are shoppers choosing organic food?
According to Acosta, the top three reasons shoppers choose natural and organic food includes:
- avoiding chemicals found in other traditional food
- perceived better quality
- concern about overall health for their families
Connecting with millennials to reinvigorate center store sales
Millennial purchase patterns play an important role in helping the mainstream channel reinvigorate center store sales, according to the report. Millennials are willing to spend more on center store categories like juices, oils and nut butter for organic and natural products; and 73 percent of Millennial respondents spend time researching before buying – which means reading the product labels. Because millennials spend so much time researching and reading labels, product labels themselves have become a unique opportunity and place for organic and natural foods to differentiate themselves and showcase their product benefits.
Label confusion: organic versus natural
While millennials are doing their best to read labels and research before making a purchasing decision, many consumers are still confused when it comes to the meaning of the food terms natural, organic, Non GMO and gluten-free, the Acosta report states. In fact, as reported by the Organic & Natural Health Association, “One in three consumers don’t understand the difference between organic and natural.” Many shoppers (56 percent) count on product packaging to get information about natural and organic products.
Price is still a barrier, but this may be changing
Price remains the biggest barrier to buying natural and organic foods, but this may be changing, the Acosta study suggests. Even though the common perception is that organic is expensive, the actual cost difference is shrinking, making natural and organic more appealing and accessible. Another factor that influences shoppers to buy organic is being able to find natural and organic products in the local grocery retail store and not having to make a long trek to specialty stores or farmers’ market.
Colin Stewart, senior vice president of Acosta Insights, Center for Shared Business Intelligence, said , "There is a wealth of opportunity for mainstream retailers to capitalize on the increased natural/organic demand, especially in an overall flat environment. The ability to attract these shoppers via expanded natural/organic assortment, competitive pricing and using natural/organic as a differentiator is key,” “Retailers have a considerable opportunity to drive more foot traffic from the two-key natural/organic purchasers--millennials and families.”
How to encourage growth in the natural and organic categories
Here are seven ways Acosta suggests the organic industry can encourage growth in the natural and organic categories:
- Use organic and natural as a growth strategy. In an overall flat economy, demand still increases for natural and organic products.
- Tie into overall health and wellness messaging. Educate consumers and shoppers about natural and organic. Recommend healthy alternatives and how to prepare these.
- Promotion isn’t just about price. Promote availability in signage, packaging and labeling.
- Organic and natural can be a differentiator in the marketplace and enhance the store experience for the shopper.
- Eliminate the shoppers’ confusion. Communicate the benefits and communicate them often!
- Leverage the gateways like produce!
- One size doesn’t fit all. Organic and natural demand varies with location and demographic. Consider a segmented strategy.
For more details, click to visit Acosta’s website.