U.S. Natural Products Industry Grows to $51 Billion in 2005

2005 was a great year for the U.S. natural product industry – it grew 9.1% to $51.4 billion, according to Natural Foods Merchandiser’s annual Market Review.

Natural products retailers account for half the sales at $25.5 billion and, for the first time since 1999, they experienced double-digit growth at 10.9%. Internet sales are growing rapidly, reaching $558 million. Mass-market (food, drug, club and convenience stores) rose 8%; direct-to-consumer sales rose 6.4%.

Whole Foods Market, of course, led chain sales growing 22.4% to $5.03 billion in revenue. Little sister Wild Oats grew 7.3% to $1.12 billion in sales. The number of specialty stores that carry natural products, such as gourmet food retailers, personal care stores, and health clubs, jumped from 4,014 in 2004 to 18,300 in 2005 and over $1.2 billion in sales. On the negative side, supplement retailer GNC’s sales declined by 15.3% to $1.37 billion.

Which categories saw the most sales?

* Vitamins: $3.1 billion
* Produce: $2.97 billion; organic produce: $2.14 billion
* Packaged grocery: $2.48 billion – best sellers are packaged produce, bread, yogurt and kefir
* Personal Care: $2.35 billion

Which categories saw the most growth?

* Organic food: 15.7%; organic seafood/ meat: 67.4% to $114 million
* Nutrition bars, beer, wine and other beverages, foodservice: 30%
* Pet products: – 37.5% to $65 million
* Personal care: 12.7%
* Supplements: 8.2%.
Specialty supplements – ayervedic, glucosamine, essential fatty acids – grew 13.6% to $988 million. Homeopathics grew 11.5% to $244 million.

Coffee, coffee substitutes and cocoa posted 27.8%, along with snacks at 27.1% growth.

Although seafood sales are growing, they could do better. “Many people walk past the fish case and buy chicken because it’s just so confusing to sort out the different messages,” says Henry Lovejoy, president of EcoFish, a supplier of sustainably sourced seafood. Countering recommendations to eat more seafood for health reasons, numerous reports warn on the dangers of eating fish because of environmental contamination.

There’s no conflict when it comes to green cleaners though. According to natural products market research firm SPINS, sales of natural household cleaners reached $53.7 million in 2005, up 20% from 2004.

Ecover, a pioneer in green cleaning products, has found their formerly dim reception at conventional supermarkets change 180 degrees. Even three years ago they were viewed as organic fig-eaters whose products were too touchy-feely to work, but now those same stores are coming to them, showing tremendous interest.

Americans are finally becoming more aware, according to an Ecover spokesperson, whereas Europeans have been buying green cleaners for years. “Europeans and Japanese, [especially], are very particular about their products, very quality conscious, and they’re also willing to pay top dollar for high quality,” says Steve Estabrooks, president of Orange-Mate, where 25% of sales are overseas. He says they usually see interest first overseas, and later in the U.S.

As for natural cosmetics, SPINS says revenue grew by 20.9% in 2005 – the top category in the natural body care. Increasingly wary of the chemicals in conventional make-up, women are finding that natural versions work just as well and provide additional therapeutic benefits. Ingredients such as jojoba, vitamin E and lecithin nourish, hydrate, replenish oils and protect against free radicals.

And sales of organic cotton products are also growing quickly now. Over 1,200 manufacturers and retailers offer organic cotton clothing and textiles, up from several hundred in 2001. Nike, Patagonia and Sam’s Club/Wal-Mart use the most organic cotton. Worldwide sales are up to $583 million from $245 million in 2001, according to Organic Exchange’s “Spring 2006 Organic Cotton Fiber Report.”

But that’s just the beginning – Organic Exchange expects organic cotton product sales to achieve $2.6 billion in sales by 2009. They expect demand to exceed supply by 2008 if production isn’t expanded in the next two years.

++++

(Visited 26 times, 3 visits today)

Post Your Comment

Your email address will not be published. Required fields are marked *