Store Brands

DEC 2015

Store Brands delivers unprecedented strategic and tactical information needed by retail executives to develop and support compelling, differentiated store brand programs to build customer loyalty.

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4 6 Store Brands / December 2015 / ew categories in the grocery market are as promising for retailers as natural and organic food products. According to data from the 2015 Organic Industry Survey, conducted by the Washington-based Organic Trade Association (OTA), U.S. consumer sales of organic products now exceed $39 billion. On top of that, the association reports that the range of consumers shopping organic is more diverse than ever. Trends with traction Joel Minkoff, research and development chef for Bridgeport, N.J.-based Chelten House Products Inc., says one trend that is helping the natural and organic sector is the drive for cleaner labels. "The overarching trend that has been penetrating almost all retail categories is the cleaning up of labels and simplifying ingredient decks while still delivering unique bold flavors," he says, adding that unusual inclusions are growing more popular as well. "In salad dressings, we are seeing the use of different oils such as including small amounts of chia oil, avocado oil and flax oils to represent a halo of health," he adds, noting that Ranch varieties are appearing with inclusions such as avocado, bacon, salsa, hummus and Sriracha. On the flavor front, ethnic Thai and Korean- inspired flavor profiles are also trending. And the gluten-free trend continues. "Gluten-free continues to be a big deal in the organic and natural space," says Angela Jagiello, associate director of conference and product development at OTA. "Both gluten-free and vegan are driving growth and really interesting innovations in categories that have been a little tired." She points out that more frozen foods, for example, are seeing natural ingredients such as quinoa, millet and amaranth. And Chicago-based Information Resources Inc. (IRI), a Chicago-based market insights firm, says one area in which organic is really trending is in beverages. "Natural, organic and specialty beverages are exploding in the marketplace, outpacing conventional beverages in every channel," reports Larry Levin, executive vice president of new solutions at IRI, in a blog post on the firm's website. His post cites sales data from Chicago-based SPINS showing recent "massive growth" for some beverages, including a 282 percent increase in functional drinks featuring turmeric and a 62 percent increase in refrigerated cultured or fermented drinks. Trends on the horizon When it comes to upcoming trends for natural and organic sauces, demand will grow for barbecue and other hot sauces. "The areas of Kansas City, Memphis, Texas and Carolina have expanded to include Kentucky and Alabama," Minkoff says. "Beyond these regional favorites, we are also seeing a lot of creativity in the barbecue sauce category, including the use of different fruits that have been grilled to give different flavors, the inclusion of different spirits and the use a of a diverse array of chile peppers." With everyone wanting to know "what the next Sriracha is," he says that "the availability of chile peppers from around the world has left this category wide open." Whatever trends retailers opt to adopt, the natural and organics category is one where lots of innovation can be seen. "One thing about the organic market that is interesting is that if you shop at a natural foods co- op or even Whole Foods, in the organic and natural set, you'll notice a lot of new and interesting products that will take years to push out to the mainstream market," Jagiello says. — M. Hogan Simple but bold The natural and organic food and beverage segment is seeing trends toward simpler ingredient statements and bolder flavors. naTural and organic

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