Cross-channel marketers report strong sales gains in organic, bottled water segments.
By Laurie Budgar, Contributing Editor
Everything old is new again. Some long established categories in natural foods are growing at rates usually reserved for products that are just starting to get distribution.
Produce does the natural foods industry particularly proud this year. Even though it's had considerable market penetration for several years, it continues to produce astronomical growth rates. In 2004, sales of packaged produce rocketed more than 35%, with 47% growth for organic.
But in '05, the category continued to post double-digit growth, racing ahead 26% for more than $222 million in sales. That secured it the No. 1 sales spot among food items in natural foods stores. However, growth rates for organic produce didn't crack the top 10 this year. In mainstream stores, shoppers spent $1.4 billion on packaged produce, a 22% increase over the previous year.
Tonya Antle, vice president of organic sales for San Juan Batista, Calif.-based Earthbound Farm, explained the popularity of packaged produce. "The overarching theme to this would be convenience. When you look at the time-pressed shopper … that value-added section really adds a lot of immediate satisfaction for the consumer. It's convenient and it's healthy."
Other top sellers include bread and baked goods, which feasted on the crumbs of the low-carb craze. The category posted a 12.5% increase in 2005 sales in natural supermarkets, for a total of nearly $199 million.
"I think there's a combination of factors [contributing to the renewed popularity]," said Victoria Hartman, vice president of sales at Boulder, Colo.-based Rudi's Organic Bakery, whose overall sales increased 42 percent last year. "The new food pyramid with the guidelines that …recommended Americans eat three or more servings of whole grains each day