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Despite the economic downturn of 2008-2009, ethical grocery products are continuing to make headway in the market, especially when contrasted with the relatively flat market for conventional groceries. Indeed, by many accounts, consumer demand is steadily increasing for products that fulfill eco-friendly, natural, organic, local, humane, and fair trade criteria. Major marketers and retailers are increasingly tapping into this trend by offering more ethical products, upping their corporate responsibility efforts through energy-efficient "green" facilities and sustainable business practices, and increasing their associated cause-related marketing efforts. Underpinning market advancement is ongoing strong consumer demand for products perceived to be healthier and safer. According to Packaged Facts' February 2009 consumer poll, approximately one-fourth of U.S. adult shoppers frequently buy certified organic food or beverage products, and one-third are usually willing to pay more for organic foods-even in the midst of economic recession. Featuring exclusive consumer data from this survey, the report homes in on food and non-food purchasing trends as well as attitudes and demographic characteristics of ethical product purchasers. Building on the analysis presented in the previous edition, the report also examines key issues and trends affecting the marketplace across two classifications-Foods & Beverages, and Non-Food Products-with the latter defined as encompassing personal care products (cosmetics, skin care, hair care, etc.) and household products (paper goods, diapers, detergents, cleaning products, light bulbs, etc.). Coverage includes historical and projected retail sales estimates from 2005 through 2014, case studies of key marketers and retailers, and trends in new product development and competitive positioning. Also covered are government regulations and certifying organizations, mergers and acquisitions, retail trends, eco-conscious demographic profiles, and international trends. Additional data sources include Information Resources, Inc.'s InfoScan Review for the mass-market channel, Datamonitor Product Launch Analytics data tracking new product introductions, and Experian Simmons data profiling consumer attitudes and product purchasing behavior.
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Market Insights: A Selection From The Report Natural Foods Channel Generates Almost Half of Retail Sales Packaged Facts calculates that the natural foods channel—including national chains such as Whole Foods and Trader Joe’s, as well as regional chains and independent natural food stores—generates 45% of total retail dollar sales of ethical grocery products. The mass-market channel—comprising conventional supermarkets, chain drugstores and mass merchandisers—follows at 35%. The prestige/pop prestige channel—which consists of health and beauty care (HBC) specialty store chains, cosmetic departments and boutiques in department stores, salons and spas—accounts for 6% of ethical product sales, with all other retail channels ringing up the remaining 14%. The “all other outlets” grouping encompasses bookstores such as Borders Books; home improvement and hardware stores such as Home Depot); home specialty store chains such as Bed, Bath & Beyond; office supply chains such as Staples; farmers’ markets and community supported agriculture (CSAs) ventures; and mail-order and Internet sales. [Figure 2-3] Over 2,100 New U.S. Products Annually Bear Ethical Claims According to Packaged Facts’ analysis of data from Datamonitor’s Product Launch Analytics (PLA) service, in both 2007 and 2008, over 2,100 new U.S. product launches carried ethical claims. Between 2005 and 2008, the number of ethical products brought to market grew by 88%. During the first seven months of 2009, non-food launches carrying ethical claims actually exceeded food and beverage launches, although in the full years of 2007 and 2008 food and beverage launches represented 64% and 61%, respectively, of total ethical product debuts. In analyzing the PLA data, Packaged Facts considers as ethical any product that uses one or more of the terms “biodegradeable,” “cage free,” “earth-friendly,” “eco-friendly, “ethical,” “fair trade,” “humane,” “local,” “locally,” “organic,” “organically,” “sustainable” or “sustainably” in its product description or marketing positioning. [Table 2-7] Specialty and Department Stores Strong in Personal Care Specialty stores and department stores are strong in the ethical personal care products arena. These stores encompass retail chains that specialize in dedicated ethical product lines such as The Body Shop and Aveda, cosmetics shops such as Sephora that offer beauty products from a wide range of marketers, and department store cosmetics departments, the traditional bastions of prestige cosmetics lines. As noted in the “Non-Food Products” chapter, Packaged Facts calculates that department stores, health and beauty care specialty chains (including single-brand retail stores such as The Body Shop, Aveda and Bath & Body Works, as well as cosmetics specialty chains like Sephora) and salons and spas comprise a 29% retail dollar share of ethical personal care product sales. These stores are not a significant factor in ethical food and beverages or household products, however. In the NewsDespite Recession, the Market for “Ethical” Consumer Products Remains Healthy New York, October 5, 2009 — The market for products positioned and marketed on the basis of ethical standards (eco-friendly/green, natural/organic, humane, and fair trade) is thriving despite the recession, reveals a new report by leading market research publisher Packaged Facts. Based on data from a proprietary survey, the recently released Ethical Food and Beverage, Personal Care and Household Products in the U.S.; Conscientious Consumerism and Corporate Responsibility in the New Economy, 2nd Edition, indicates that one-fourth of U.S. adult shoppers frequently purchase certified organic food or beverage products and one-third are usually willing to pay more for organic foods. “With the economy foremost in consumers’ minds, heightened price sensitivity in the midst of the current recession is inevitably having an effect on the market for ethical products,” says Don Montuori, publisher of Packaged Facts. “However, our survey indicates that more shoppers understand the environmental, social, and economic implications of their choices. The result is a sizeable number of consumers who will purchase typically more expensive ethical products even in economically challenging times.” The U.S. market for ethical products has annually grown in the high single- to low double-digits over the past five years, according to the report. Packaged Facts forecasts the growth rate will persist despite the recession and the market will approach $62 billion in 2014, up from a projected $38 billion in 2009. Foods and beverages dominate retail sales of ethical consumer products in the U.S., accounting for nearly 75% of retail dollars through all channels in 2009. Non-food products—mainly personal care and household products—represent the remaining quarter. However, through 2014, Packaged Facts projects that non-foods will grow at a considerably faster pace than food, with an 80% versus 57% growth rate. Nevertheless, non-foods will still represent a smaller portion of the overall market. Tapping into the trend are major marketers and retailers who are offering more ethical products, upping their corporate responsibility efforts through energy-efficient “green” facilities and sustainable business practices, and increasing their cause-related marketing efforts. Meanwhile, supermarket chains are entering the fray by developing private-label lines of organic foods and natural household products. Ethical Food and Beverage, Personal Care and Household Products in the U.S., 2nd Edition analyzes the attitudes and demographic characteristics of ethical product purchasers through the examination of key issues and trends affecting the marketplace across two classifications—foods & beverages and non-food products—with the latter defined as encompassing personal care products (cosmetics, skin care, hair care, etc) and household products (paper goods, diapers, detergents, cleaning products, light bulbs, etc). Coverage includes historical and projected retail sales estimates from 2005-2014, case studies of key marketers and retailers, and trends in new product development and competitive positioning. About Packaged Facts - Packaged Facts, a division of MarketResearch.com, publishes market intelligence on a wide range of consumer market topics, including consumer goods and retailing, foods and beverages, demographics, pet products and services, and financial products. Packaged Facts also offers a full range of custom research services. | |||||||||
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