target customer with knowledge of trends

Understanding health and wellness developments can increase sales.

The health and wellness landscape has been undergoing some major changes over the past several years, spurred by various factors, including scientific discoveries, nutrient breakthroughs, changing lifestyles and demographics, rising obesity, desire for wellness personalization and demand for corporate social responsibility. All of these transformations can make it difficult for natural foods retailers to target exactly what their customers are looking for. To help you better understand how to market to today’s consumers, The Natural Marketing Institute (NMI) has put together a list of the top 10 health and wellness trends of 2006, based on our research of more than 300,000 U.S. consumers.

NMI’s top 10 trends of 2006 include:

1) Changing demographics createhealth and wellness opportunities.

The U.S. population is undergoing a dramatic shift in demographics, as householdsizes change, the population ages and thenumber of minorities increases. Savvy retailers need to understand how to market tothese various demographics.

One of the key factors is catering to theaging population. As a growing number ofthe 78 million-strong baby boomer generation enters the “empty nest” life phase, they will be looking for convenient mealand side dish options that are easilyportioned for two. In addition, theaging boomer generation is morefocused on preventing certainhealth conditions, and is more likely than other generations toincrease consumption of healthyfoods and beverages, and avoidproblematic ingredients such assodium and sugar.

On the other end of the agespectrum, opportunity will arise fornew products targeting the increasing number of twenty-something’swho are just starting out on theirown and are far more adventurousin food choices.

In addition, the growing numberof Hispanics and other ethnicities inthe U.S. presents unique opportunities, along with single households,larger households and children.Look for these demographic trendsto have a significant impact on sales.

2) Organic versus natural: Thebalance of price and benefits.
According to our research, 56%of American households use organic products, and the market is poised to grow from $13 billion in 2005to $20 billion in 2009. With approximately 500 new organic products introduced into the marketplace over thepast year, including many mainstreambrand extensions and an explosion ofprivate-label brands, retailers need tounderstand the trade-offs consumersmake in their purchase decisions of natural versus organic products.

Consumers want the benefits oforganically grown foods and beverages,but may not associate those benefitswith the term “organically grown.”

Consequently, the need for consumer education in the marketplace isevident. Finding the optimal balance ofprice, benefits and levels of understanding drive consumer choice among natural and organic products (and will provide the edge over conventional products). With an 88% increase from 2002to 2005 in consumer willingness to paya premium price for organic foods andbeverages (17% versus 32%), helpingthem understand the features of organicshould translate into increased sales dollars and continued double-digit marketgrowth.

3) Energy and vitality: Future platforms for growth.
A residual of the low-carbohydratedieting trend is a desire for productsthat provide balanced and sustainedenergy. NMI research shows that morethan half of all shoppers want foods(51%) and supplements (59%) that helpthem prevent energy loss. With two-thirds of the general population feelingthat having enough energy is “veryimportant” in their lives, and 81% interested in maintaining their health specifically to have enough energy, look for anincreased array of products advertisingtheir energy benefits.

More specifically, foods that providebalanced energy are showing strongpotential. Low-glycemic foods, forexample, may prove to be less trendyand have more staying power than low-carb because of their ability to stabilizeblood-sugar levels, satiate, provide energy and even help with weight management. According to NMI research, low-glycemic food consumption has nearlydoubled, from 22% in 2004 to 42% in2005. In addition, consumers may eatlow-glycemic foods and beveragesthroughout their lives, because theseproducts offer benefits for people of allages.

4) Ingredient/nutrient drivers.
Specific types of nutrients will continue to drive food, beverage and supplement sales in 2006 and beyond. NMIhas found that more than half of all consumers seek foods and nutritional supplements that have “a specific healthclaim.” In addition, with more than 29million adults and children sufferingfrom food allergies, allergen-free foodswill continue to exhibit solid growth.Gluten-free foods alone have shown a50% compound annual growth over thepast six years and generate U.S. retailsales in excess of $400 million.

While consumers’ lack of understanding of the specific health benefits ofsome nutrients sometimes creates barriers, continued education will help retailers and manufacturers raise the value oftheir nutrient-rich products in the eyesof the consumer.

5) The proliferation of heart-healthy products.
Heart disease and stroke account forabout 40% of deaths in the UnitedStates—one death every 34 seconds. Thecost of cardiovascular disease is $400billion, including health care costs andlost productivity.

The good news is that many of thefactors that contribute to the development of cardiovascular disease can becontrolled through diet and lifestyle.Consumers are getting the message andare buying more fortified and functionalproducts, and foods with less sugar, salt,fat and additives.

With upwards of 100 million U.S.adults managing cardiovascular disease,look for more heart-healthy products inthe marketplace. Whether it’s focusingon cholesterol, blood pressure or otherheart-related issues, this trend has realstaying power.

6) On-the-go healthy eating.
Saying that today’s consumer is busyis an understatement. Shoppers findthemselves grabbing meals and grazingwhenever they can find time, and oftenare forced to make trade-offs betweentaste, convenience and health. Theselifestyle changes open the door formany healthy snacking and on-the-gomeal products. In addition, as workdayslengthen, the average dinnertime isbeing pushed past 6:30 p.m., creating aprime opportunity for healthy “hold-me-over” snacks.

With 72% of consumers feelingsnacking can be part of a healthy diet,and 59% interested in healthy foods thatcan be eaten on the go, opportunitiesflourish in this fast-growing category.Fifty-one percent of consumers alsoreadily admit they would eat more fastfood products if they were available inhealthier versions—thus expanding theon-the-go food category into the food-service arena and prepared takeoutwithin the retail market.

7) The next growth opportunitiesin nutritional supplements.
Even in a market showing slowgrowth, there are opportunities for nutritional supplements. For example, usageof condition-specific supplements hasmore than doubled, from 22% of consumers in 1999 to 49% in 2005, a 119%jump.

In addition, consumers are becomingincreasingly interested in non-pill supplement formats typically found in convenience stores. For example, since 2002,93% more consumers indicate theywould use supplements if they came in achewable form. Gum and quick-dissolvestrips also show rising popularity, withcompound annual growth increases of35% and 46%, respectively, over thepast four years. With 21% of the population unsatisfied with the number ofpills they have to take and 18% reporting difficulty in swallowing pills, there isa major opportunity for the supplem
ent industry to increase consumer reach by extending product lines to include alternative formats.

8) Premium personal care.
Consumers are becoming more interested in premium personal care products, and are seeking more elegant packaging and expanded product benefits, especially at convenience stores. According to NMI’s research, 53% of consumers have used natural personal care products in the past year, and 34% have used organic. While personal appearance is one of the primary drivers, two out of five consumers use natural/organic personal care products for overall health and wellness and becauseof environmental concerns.

Organic personal care is a hot market segment; half of all users haveincreased their consumption over thepast year. This increase may also bedriven by the introduction of moreorganic products into the marketplace.

Look for personal care to outpace the growth of other natural and organicproducts in the coming years.

9) Individualism crosses categories.
Consumers are increasingly collecting health and wellness information anddeveloping individualized, personalizedhealth plans such as the U.S. Department of Agriculture’s “My FoodPyramid,” which launched in 2005 andcan be customized for individual physical characteristics.

For example, consumers managingheart disease show a high desire forfoods that have a specific health claim,and three-quarters try to eat heart-healthy foods while making other foodselections based on heart-healthy criteriasuch as low salt and low fat. Watch fornew, “personalized” supplements too.

10) Values and corporate socialresponsibility.
Consumers are increasingly choosing products that have environmental,sustainability and values tie-ins.

An emerging segment of the U.S.population, known as Lifestyles OfHealth and Sustainability (LOHAS)consumers, aligns itself with these beliefsystems and corporate social responsibility. LOHAS consumers are influencers and early adopters; they try toteach their family and friends about thebenefits of purchasing environmentallyfriendly products, and they are usuallyone of the first in their family or circleof friends to try a new product.

Because of LOHAS consumers’ influential and trend-predicting behavior, they are an attractive segment of the market.

This connection between values and purchase behaviors is a strong trend to watch, both in the U.S. and globally.

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