GHQ: Bright future

Discussion
Apr 11, 2008

By Suzanne Vita Palazzo

Through a special arrangement, what follows is an excerpt of a current article from Grocery Headquarters magazine, presented here for discussion.

Encompassing an array of products including natural and organic foods, fortified foods, and supplements, the health and wellness industry has performed like a child prodigy over the past few years, challenging many seasoned grocery categories and disproving skeptics. Now well-developed and an indispensable part of mainstream retailing, the category is poised to take the next leap.

To keep things in perspective, it’s important to note that these products currently represent about 2.8 percent of all retail food and beverage sales in the U.S., which indicates that despite the category’s growth, there is still ample room for penetration.

But while organic food and beverages continue to fuel the H&W momentum, experts point out that there is actually a convergence of trends and values propelling the movement forward.

“We believe that natural is somewhat passé right now. It was hot – about five years ago – but we believe that organic has taken natural’s space,” said Harvey Hartman, chairman and CEO of The Hartman Group. “We believe that both of these are good ideas and that organic will continue to be aggressive and to be a space that people want to participate in. But what might take the place of organic in consumers’ minds? We believe it will be fresh, and then it may be local.

“The point is that now we’re living in a world where one idea is not a trend,” Mr. Hartman continued. “It’s a combination of ideas and how we put them together and understand them more in a linear space.”

Observers also note that the “green movement,” with its focus on issues such as global warming and sustainability, is becoming an area of increased activity within the wellness genre as consumers begin to place greater worth on products that have a minimal impact on the environment. This mindset speaks to another dimension of how an item may make a consumer feel – not in the physical sense, but in the peace of mind it may impart.

“I think there is a combination of things driving this, and I do think concerns about the environment – certainly global warming – are part of that decision to live a healthier or more natural lifestyle,” said Tracy Taylor, senior vice president of public affairs and strategic initiatives for the Natural Products Association

Functional foods in particular are also anticipated to fuel a bulk of the growth, as a wide segment of the population will remain on the hunt for the magic bullet of health.

“What we’re seeing are people who are looking for – whether it’s food or dietary supplements – is something that will provide a certain health benefit,” says Ms. Taylor. “And I think there’s going to be more of that. Functional foods are really going to continue to change the whole food industry.”

Discussion Question: How have the drivers of the health & wellness category changed over the last five years? Do you think wellness (based on values) is becoming even more important than health (based on nutrition)? What needs to happen for the H&W trend to the next level?

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5 Comments on "GHQ: Bright future"


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M. Jericho Banks PhD
Guest
M. Jericho Banks PhD
14 years 1 month ago

Harvey Hartman’s observation that just one idea doesn’t make a trend is enlightening. Just as weather is not climate, “natural” and “organic” are not trends. Food trends represent a continuum, comprised of elements of wisdom and of dumbness. Elimination of trans fats? Wisdom. Natural foods? Dumbness. But, both are included in the overall American trend to obtain health through consumption. Eat your way to fitness, making it the food manufacturers’ responsibility to improve our health. In no other country does this mindset pervade, suggesting to me the question: How much is too much? I think we passed “too much” several miles back. In a society in which most of us really, honestly don’t have to make the acquisition of nutrition a daily concern, we ask more from our food supply than simple sustenance. Sometimes we ask wise questions, and sometimes dumb ones. Bounty has its bedevilments.

Doron Levy
Guest
Doron Levy
14 years 1 month ago

It is truly amazing how these sections have grown in the last 5 years. Retailers know the importance of having a good selection of healthy living products and even more important is the private label opportunity in that category. I honestly believe that is what is driving HW. The margins for house brands, especially in vitamins, are just too good to pass on. And the private label presents and exceptional value for the consumer as well.

Organics are now the new HW buzzword. Organic skus are the next era for growth in healthy living. Retailers need to capitalize on this new trend and expand organics without exception.

Dave Wendland
Guest
14 years 1 month ago

This topic is all the buzz…and a day does not pass without hearing swirling discussion about health-beauty-wellness and the “new” consumer. Frankly, the talk and excitement is not yet translating into new and innovative merchandising, marketing and displays for these product groups. If–and when–progressive (and large) retailers embrace this phenomenon in non-traditional, and better consumer-focused, ways, we’ll really see the category grow to its potential.

We have begun working with a few who want to raise the bar and take action–the goal is to unveil a category treatment that truly addresses shopper insights, demands and expectations. HBW is not going anywhere but up!

Jerry Tutunjian
Guest
Jerry Tutunjian
14 years 1 month ago

The big driver is the social change that has moved the trend to the mainstream, thus it has a far larger following than previously. As well, some grocers and supermarket operators have learned to merchandise the category in more effective ways. As well, don’t forget that Wal-Mart’s increased interest in the category has encouraged suppliers and competitors.

Mark Lilien
Guest
14 years 1 month ago

Americans are diverging, not converging. Yeah, millions want health and wellness. And what about the millions who crave jumbo fast food portions? Haven’t seen many folks super sizing their organic salads, but I’ve certainly seen zillions super sizing their high fat fried foods and sugar-rich caffeine drinks. For every Whole Foods location, there are hundreds (thousand?) of fast food grease stations, all crowded at lunch and dinner. And tell me how Starbucks, Dunkin’ Donuts, Applebee’s, Wendy’s, and thousands of convenience stores have trashed their high fat, high sugar, high caffeine menus in favor of tofu, celery juice, brown rice and broccoli?

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