Organic And Natural – Still The Fastest Growing Segment?
Environmental Leader published an article today, Fast-Moving Eco-Friendly Consumer Goods Appeal to Many, noting the rapid increase in consumers purchasing organic and personal care products, natural foods and beverages. According to the report, over 1/3 of all consumers purchase goods in these categories. This makes it the fastest growing category of green products.
This makes sense.
In my previous posts here and here, I’ve talked about how important it is to realize that there are different segments in the green market. These consumers are driven to purchase green and eco friendly products for different reasons.
The Naturalites, a good 25% of the population are primarily concerned about personal health and wellness, and use many natural products; would like to do more to protect the environment. They are, of course the prime target for organic and natural food, beverages and personal care items. Throw in some of the LOHAS consumers (16% of the population) and some Conventionals (23%) and it adds up to one third of the market.
Sounds good for ecopreneurs in these categories…
But, while reading this cheery news, I happened to notice that this data comes from the 2007 Natural Marketing Institute’s, 2007 LOHAS Consumer Trends Database. Will this trend hold up in 2008?
As consumers cut back during this recession, I wonder how this trend will play out.
In general, consumers cut back and trade down in a recession, which could be good for some products and bad for others.
Thrifty minded consumers are already reluctantly cutting back on their purchases of organic products that don’t necessarily make the top 10 list of foods to buy organic. The current economy could be tough for food processors of items not on that list. Pricing will be key as consumers will look for ways to rationalize purchase of organic products.
Skin care products may be a little safer, if they are positioned well against substitution products. That is, if consumers can see replacing expensive facials with natural “treatments”, that segment should continue to grow. Again, pricing will be key.
Overall, I would expect to see moderate growth in natural and organic foods and personal care products, but, I also expect to see a big shakeout as less well capitalized companies and poorly positioned products fall by the wayside.
What are your expectations for these categories?
The most interesting statistics is the resiliency of this group of consumers who continue to patronize organic and natural foods despite rising gas and food costs and a depressed economy. It just goes to show that American’s are finally getting smart with their health. In the end, eating healthy is much cheaper than outrageous health care bills!
It’s all about perception, not recession. A lot of eco-friendly or “psuedo” eco-friendly businesses do well because of the popularization of “eco-friendly”. They like the “idea” of shopping at Whole Foods, when in reality shopping at Whole Foods isn’t very eco-friendly.