Natural products continue to outperform conventional products

New research from IRI and SPINS, a provider of wellness-focused data technology and market analytics, reveals that consumers are purchasing more natural products in 2020, both pre-COVID-19 and during the current pandemic. The new report, COVID-19 and Navigating the Path Ahead: Supporting the Natural Products Consumer, highlights natural shoppers’ product and shopping preferences, recommended strategies for manufacturers and retailers to attract and retain consumers, and suggested strategies to employ in order to maximize new opportunities in the future.

“Dollar sales for natural products continue to grow over one year ago, as much as an astounding 78% in the middle of March during consumers’ initial stock-up period and continuing in the high teens at present,” said Steve Ramsey, executive vice president and general manager, strategic accounts, IRI, in a press release. “Given that natural products represent more than 8% of total store sales year-to-date and are outpacing sales of conventional products, there are significant opportunities for manufacturers and retailers alike to show support for consumers.”

Health concerns surrounding COVID-19 have driven a wider range of shoppers to the natural marketplace, creating a significant opportunity for manufacturers and retailers to build loyalty with new shoppers as well as reinforce their commitment to existing ones.

Two segments of IRI’s NaturaLink segmentation represent the leading edge of natural trends. “True Believers” and “Enlightened Environmentalists” represent 22% of shoppers but 44% of natural product sales. These consumers shine a light on opportunities for brands and retailers. More consumers across all NaturaLink segments bought natural products at a higher rate during the March stock-up period, representing an opportunity to attract and convert new shoppers increasingly focused on their health. Refrigerated plant-based meats are one example; overall, buyer count increased 62% during the stock-up period and dollar sales increased 51% in that time frame across a range of shopper segments.

Economic pressures on consumers and product availability are impacting shoppers’ category buying strategies but to date have not dampened their interest in natural products. Shoppers will continue to face canceled promotions, disrupted supplies, and heightened costs due to plant closures resulting from COVID-19. IRI and SPINS predict shoppers will adopt strategies, including looking for sale items, larger package sizes, private label options, and potentially different product attributes that fit tightened budgets. In particular, private brands are exhibiting outsize growth rates, similar to their performance during the last recession.