BOULDER, COLO. — Makers of natural, organic and functional food and beverage products have an opportunity in the year ahead to help consumers adopt healthier habits, said Carlotta Mast, senior vice president and market leader at New Hope Network.
“2020 was a challenging year, but natural and organic brands face a bright future,” Ms. Mast said. “We are positioned where a growing number of consumers are headed.”
Seventy-seven percent of Americans surveyed last year indicated personal health has become more important amid the pandemic, Ms. Mast said during a webinar on March 2 as part of New Hope Network’s Spark Brand Success digital event. However, she noted, many coped with the mounting stress by consuming more alcohol and “junk food,” exercising less and feeling more anxious.
“The question, of course, is how can our industry and our brands help people return to healthier habits?” Ms. Mast said. “We know they want to, and I think this is our big opportunity for 2021 and beyond.”
Sales of natural, organic and functional food and beverage in the United States grew 13% to $186 billion in 2020, according to estimates from New Hope Network.
“Pantry staples, frozen foods, and meat, fish and poultry, as well as plant-based meat and dairy alternatives, these were all categories that experienced some of the highest growth rates last year,” Ms. Mast said.
“How can our industry and our brands help people return to healthier habits? We know they want to, and I think this is our big opportunity for 2021 and beyond.” — Carlotta Mast, New Hope Network
Organic, typically a challenged category during times of economic turmoil, grew, too; US sales of organic food and beverage rose 13% to $47.9 billion.
“Nearly every organic food and beverage category did well in the US last year, including dairy, which was seeing some headwinds over the last few years, but last year this category benefited from consumers stocking up on organic milk during the pandemic,” Ms. Mast said.
Functional food and beverage sales increased 9.4% to $78 billion last year, led by growth in shelf-stable, frozen and snack categories.
“People continue to embrace the food-as-medicine trend and opt for food and beverage products that provide health benefits and true functionality,” Ms. Mast said. “The functional ingredients that drove the most consumer interest last year were those that support immune health such as mushrooms, ingredients to support the body’s stress response such as adaptogens, as well as collagen, nootropics and healthy fats.”
Conventional food and beverage sales expanded 8.6% last year, Ms. Mast said.
“We anticipate that we will see conventional food and beverage sales growth continue to lag significantly behind natural, organic and functional once we are out of the pandemic and retailers large and small continue to make more space for our industry’s products,” Ms. Mast said.
Wellness attributes are still booming, said Kathryn Peters, executive vice president of business development at SPINS. Products featuring such claims as gluten-free, non-GMO, organic, plant-based, grass-fed and cage-free all registered double-digit dollar growth last year.
Beverages that boost immunity and reduce stress and anxiety continue to gain traction, driving interest in such ingredients as elderberry, melatonin, chaga mushroom and ashwagandha.
Plant-based products are popping up in new categories, from frozen appetizers to whipped dessert toppings.
“Plant-based positioned products are continuing to grow at about two times their mainstream counterparts,” Ms. Peters said. “This is very much an accelerated trend and one that we anticipate will continue forward as more and more studies reveal the benefits of good for the body and good for the earth.”
Shoppers are seeking maintainable diets featuring whole, minimally processed foods, fewer additives and less refined sugars, she said.
“We think shoppers … will be searching for new eating plans, ones we can personalize to our own strategies and needs that give us a greater likelihood of success,” Ms. Peters said.
Frozen foods are answering the call for convenience and health, as consumers tire of home cooking, Ms. Peters noted.
Social and economic sustainability is an issue driving purchase decisions. Ninety percent of consumers said it is important that brands support and treat employees well. Shoppers also are showing interest in supporting underrepresented businesses, she said.