American Consumers Gobble Healthy Foods at Unprecedented Rate

The big news from the 2015 Natural Products Expo West was that the American consumer is buying healthy foods at volumes never seen before. Health and wellness products are achieving three times the sales growth as conventional food products.

A survey conducted by SuperMarket News found that 80 percent of surveyed food-industry wholesalers and retailers had sales growth in health and wellness products. A third of survey respondents reported an astounding 20 percent increase in annual sales!

Gluten- and allergen-free is now top wellness trend

Gluten- and allergen-free has jumped to the top of America’s wellness focus. Sales have grown beyond consumers with Celiac disease that are forced to eat a gluten-free diet. Consumers of gluten- and allergen-free products are now defined as health-conscious consumers searching for natural and organic ingredients. Interestingly, males are more influenced by gluten-free marketing claims than females. People ages 50 to 64, plus those 25 to 34, are most likely to be influenced by gluten-free marketing.

For retailers, the key fact is that 55 percent of gluten-free consumers spend 30 percent or more of their grocery budget on gluten-free foods. These foods typically cost more and carry higher profit margins than conventional food products. This growing consumer segment is challenging the food industry to provide better tasting gluten-free food, lower prices and more selection. In search of a better experience, 57 percent of these consumers have tried 10 or more gluten-free products in the last year.

Consumer confusion defines healthy food marketing

Consumers are plagued with confusions over what to buy and who to buy from. This confusion is being generated by conventional foods’ mass advertising claims, regulatory activity around package labeling and often contradicting health research like the recent removal of dietary cholesterol as a health concern. Consumers are actively using social media and food-assessment smartphone apps to sort through this conflicting messaging in search of foods they can trust.

To win today's food consumers, a food company's messaging must align with these key product attributes:

• Organic


• Non-GMO


• Local


• Simple ingredients

These product attributes, along with gluten- and allergen-free, are hot-button for consumers searching for healthier foods.

Consumers are searching for authenticity

The confusion tied to mixed marketing messaging has consumers looking past the front of the package in search of authenticity and transparency. Increasingly, especially among the millennial generation, consumers are using their smartphones to investigate company and product claims while standing in front of the grocery store shelf. This search for authenticity and trust is driving consumers toward products with simple ingredients: Consumers do not place the same level of trust on products with chemical ingredients as they do for products that have fewer, and all natural, ingredients.

Organic and non-GMO product claims are another area of consumer confusion. By definition an organic food is non-GMO. Consumers still do not make this connection.

The term 'local' is also confusing to both consumers and food sellers. How to define local is the key question. Some consumers define local as food sourced from neighboring counties. Others define it as food from the same state or within a few hundred miles of their homes. What food sellers are now beginning to accept is that the “correct” definition of local is the definition used by their customers.

Activism is succeeding!

One huge surprise reported at the Natural Products Expo West is the success of activism in sparking the sale of non-GMO products. While activism has failed to win GMO labeling legislation, it has succeeded in growing consumer awareness around the issue.

Conventional food companies, like Dupont, Monsanto, Coca-Cola, General Mills, Hershey, Nestel and Kellogg, that have poured millions of dollars into campaigns to successfully fight state initiatives on GMO labeling are winning the battle but losing the war. Media reporting on both GMO labeling initiatives and the efforts by conventional food companies has raised consumer awareness to levels that has sparked consumer buying of non-GMO products.

Rapid consumer self-education reshaping food industry

At last year’s Natural Products Expo West, the key marketing buzzwords were “Healthy Convenience Food.” What a difference a year makes in terms of how quickly consumers are educating themselves on sustainable and healthy food practices. In 2015 the American consumer now associates the word “convenience” with food preservatives.

This accelerating consumer awareness is placing tremendous pressure on food retailers to keep pace. Grocery stores are re-allocating their food merchandising mix toward healthier foods, manufacturers are redesigning their foods to remove preservative chemicals, and retail stores are increasing their refrigeration displays as a storage alternative to food preservatives. But the pace of change is not keeping up with the growing demand by the health-conscious American consumers.

The bottom line for the American food industry is that the American consumer is in revolt. They are using their smartphones and social media to figure out who is telling them the truth. They are using their buying power to demand sustainably-sourced and healthier food. The use of marketing power and political campaign contributions by conventional food corporations are, at best, slowing the inevitable. Americans want to eat healthy food, produced sustainably and sourced from trustworthy businesses. And they want it now!

Image credit: Bill Roth

Bill Roth is an economist and the Founder of Earth 2017. He coaches business owners and leaders on proven best practices in pricing, marketing and operations that make money and create a positive difference. His book, The Secret Green Sauce, profiles business case studies of pioneering best practices that are proven to win customers and grow product revenues. Follow him on Twitter: @earth2017