I. The Products

• Scope of Report
  • Food and Beverages Sold at Retail
  • Products Not Covered
• A Brief History
  • Not a New Phenomenon
  • Vitamins Discovered
  • Food Processing Becomes an Industry
  • Organic Gardening Magazine Starts in 1942
  • Nutritionists Criticize Processed Foods
  • 1960s Counterculture Popularizes Health Foods
  • Consumer Activism Grows
  • Vegetarianism
  • Fitness and Nutrition
  • Alar Scare of 1989 Opens Up Organic Market
  • Medical and Government Studies Aid the Cause
• Market Definition
  • Is It "Health" or "Natural"?
  • Defining Natural Foods
  • Quality of Ingredients
  • Minimal Processing
  • Philosophy
• Product Categories
  • Products Parallel Mass Market
  • 12 Product Categories
  • Grains, Beans, and Grain Products
  • Oils, Vinegars, and Sweeteners
  • Tofu, Tempeh, Miso, and Sea Vegetables
  • Dairy Products and Dairy Substitutes
  • Meat Alternatives
  • Meat, Poultry, and Fish
  • Fresh Produce
  • Prepared and Convenience Foods
  • Condiments, Sauces, and Seasonings
  • Crackers and Snacks
  • Cookies, Candy, and Desserts
  • Beverages
• Government Regulations
  • Three Regulatory Agencies
  • The FDA
  • The USDA
  • The FTC
  • New Labeling Laws
  • Exceptions to Nutrition Claims
  • Allowable Health Claims
  • Health Food Industry Supports Labeling Changes
  • FDA and USDA Restrict "Healthy" Labeling
  • "Natural" Foods
  • What is Organic?
  • A Self-Regulated Industry
  • State Organic Standards
  • The Certification Process
  • Organic Foods Production Act of 1990
  • Federal Standard Could Boost Industry, But Some Opposed
  • Proposed Federal Standards
  • Retailers Will Need Certification, Too
  • Organic Is Not Necessarily Better
• Food Technology
  • Gene Cuisine
  • Bovine Growth Hormone
  • Irradiation
  • "Designer Foods" and "Nutraceuticals"
  • Hidden Agendas
  • [Chart] New NLEA Labeling Requirements
  • [Graphic] Retail Sales of Health and Natural Foods: 1990-1994

II. The Market

• Market Size and Growth
  • Estimates of Market Size Vary by Source
  • Retail Sales Near $4.8 Billion in 1994
  • Growth Remarkable for Past Three Years
  • [Table] Estimated Retail Sales and Growth of Health and Natural Foods: 1990-1994
• Factors in Market Growth
  • Food and Health Connected
  • New Dietary Guidelines
  • Health Concerns Spur Sales of Healthier Foods
  • "Healthier" Does Not Always Mean "Natural"
  • Confusion and Conflicting Feelings About Healthy Eating
  • A Countertrend Toward Unhealthy Eating
  • Vegetarianism Gaining
  • Natural Foods Supermarkets Spur Industry
  • Competition Making Industry Stronger
  • Major Food Companies Entering Arena
  • Stronger Financing Helps Drive the Industry
  • Mainstream Outlets Rediscovering Natural Foods
  • Natural Foods Going Mainstream
  • Industry Wakes Up to Convenience Products
  • Natural and Organic Foods Gaining Attention from Restaurant Chefs
  • Food Safety Issues Help Sales of Organic Products
  • Environmental and Social Responsibility
  • Premium Prices of Organic Foods Limit Growth
  • [Graphic] Projected Retail Sales of Health and Natural Foods: 1995-1999
• Market Projections
  • Sales to Reach $8.7 Billion by 1999
  • [Table] Projected Retail Sales and Growth of Health and Natural Foods: 1990-1994
• Market Composition
  • Sales by Product Group; Packaged Groceries on Top
  • [Table] Sales by Product Group in Health and Natural Foods Stores (1993)
  • Organic Foods Sales
  • Natural Foods Stores the Leading Retail Outlet
  • [Graphic] Sales by Retail Outlet: Health and Natural Foods (1993)
  • Sales by Region
  • [Table] Sales by Region: Health and Natural Foods (1993)

III. The Marketers

• The Marketers
  • About 1,500 Companies in the Field
  • Large and Small, Most Privately Held
  • Broad-Line Marketers
  • Leading Marketers in Single Product Categories
  • Growers and Producers
  • Mass Marketers
  • [Chart] Selected Marketers and Brands of Health and Natural Foods
• Marketer and Brand Shares
  • No Data Available by Brand or Category
  • Health Valley Largest Company Overall
  • Smucker Dominates the Natural Juice Category
  • [Chart] Leading Marketers and Brands in Selected Product Segments
• The Competitive Situation
  • Industry Becoming More Sophisticated
  • Companies Come and Go, Move and Grow
  • Mass Marketers Offer "Healthy" Foods
  • Four Ways Mass Marketers Compete
  • Developing New Products Risky
  • Repositioning Existing Products
  • Acquiring Natural Foods Companies
  • Pillsbury's Joint Marketing Agreement with ADM
  • A Healthy Foods Conglomerate?
  • Organic Foods Spreading, But Most Major Companies Still Avoid Organics
  • Natural Foods Marketers Going Mainstream
  • Crossovers Carry Risks
  • Premium Prices Can Be a Plus
  • Little Price Competitiveness
• Selected Company Profiles
  • Archer Daniels Midland Co.
  • Arrowhead Mills, Inc.
  • Celestial Seasonings, Inc.
  • Coleman Natural Meats, Inc.
  • Earth's Best, Inc.
  • Eden Foods, Inc.
  • Fantastic Foods, Inc.
  • Guiltless Gourmet, Inc.
  • Health Valley Natural Foods, Inc.
  • Lundberg Family Farms
  • Morinaga Nutritional Foods
  • Organic Valley/CROPP Cooperative
  • J.M. Smucker Co.
  • Tree of Life, Inc.
  • 21st Century Food Products, Inc.
  • U.S. Mills
  • Vestro Foods, Inc.
  • Vitasoy (U.S.A.), Inc.
  • Weetabix, Ltd. (Barbara's Bakery, Inc.)
  • Welch's, Inc. (Cascadian Farm, Inc.)
  • Wholesome & Hearty Foods, Inc.
  • Worthington Foods, Inc.
• Marketing Trends
  • Larger Companies Position Themselves in Mass Market
  • Some Target Gourmet Industry
  • Marketing to Children
  • Political Correctness
  • Organic and Nonorganic Products from Same Marketer
• Product Trends
  • Growing Variety of Products
  • Product Claims Measured
  • [Table] Product Claims on New Product Introductions: 1992 vs. 1993
  • Marketers Continue to Cut the Fat
  • Convenience Foods Appeal to Busy Consumers
  • Mainstream Look-Alikes
  • New Ethnic Entries
  • Hot Products
  • Instant Meals
  • Frozen Entrees
  • Canned and Jarred Entrees
  • Better-Tasting Meatless Meats
  • Ready-to-Eat Cereals Booming
  • Cookies—Fat-Free vs. Guilty Pleasures
  • Grains, Flours, and Pasta
  • Granola Bars
  • Flavored Oils and Vinegars
  • Baking Alternative
  • Pasta Sauces
  • "Lite" Tofu
  • Sales of Organic Dairy Products Surge
  • Hemp Seed and Other Alternative Cheeses
  • Earth's Best Expands its Baby Food to Juniors
  • Snack Foods Overcrowded, But Some New Twists
  • Desserts Rival Mainstream Entries
  • Beverage Flavors Go Exotic
  • Vitamin-Enriched Sodas
  • [Chart] Selected New Product Introductions: By Category (1993-1994)
• Packaging Trends
  • Package Design Becoming More Sophisticated
  • Many Packages Copy-Intensive
  • More—or Less—Packaging?
  • Environmentally Correct Packaging
• Advertising and Promotion
  • Little Measured Advertising
  • Magazines the Preferred Medium
  • A Few Use TV
  • Radio Is Another Alternative
• Advertising Positioning
  • Copy-Intensive Advertising
  • Natural Ingredients and Processes
  • Health and Taste
  • Convenience
  • Human and Environmental Health
  • Link to Earth Through Farmer
  • Organic Certification a Selling Point
  • Sex Appeal
  • Hispanic Marketing
  • Versatility
  • Examples of Consumer Advertising
• Consumer Promotions
  • Some Companies Beginning to Use Coupons
  • Frequent Purchaser Rebates
  • Consumer Education
  • "Missionary Marketing"
  • Building Goodwill
  • Examples of Consumer Promotions
• Trade Advertising and Promotions
  • Use of Three Key Trade Publications
  • Trade Ads Double as Consumer Ads
  • Promotions
  • Trade Allowances and Deals
  • Co-Op Offers
  • In-Store Display Materials and Supports
  • Retailer Incentives
  • Examples of Trade Advertising and Promotions
• Trade Shows
  • A Forum for the Industry
  • Major Shows
• Industry Organizations
  • The National Nutritional Foods Association
  • OFPANA
  • Other Associations

IV. Distribution and Retail

• Distribution
  • Specialty Distributors the Major Source
  • Substantial Organic Sales Through Direct Selling
  • The Role of Wholesalers
  • Shakeout Among Distributors
  • New Pricing Policies
  • Wholesalers Offering More Services
  • Some Wholesalers Offer Private Label
  • Direct Buying
  • Co-Op Buying
  • Brokers Support Marketers' Efforts and Aid Retailers
• Retail Overview
  • Number of Retail Outlets
  • Health and Natural Foods Stores the Leading Outlets
  • Six Types of Health and Natural Foods Store Formats
  • Health Food Chains
  • Mass-Market Outlets
  • Mail Order, Farmers' Markets, and Other Outlets
  • [Table] Sales of Health and Natural Foods: By Retail Channel
• Health and Natural Foods Stores
  • Number of Outlets Growing
  • [Table] Health and Natural Foods Stores: By Format
  • Natural Foods Supermarkets
  • Not All Natural Foods Supermarkets Successful
  • Is the Market Self-Limiting?
  • Small Stores Can Succeed with Niche Marketing
  • Medium Stores Enlarging
  • Private Corporations and Sole Proprietorships Favorite Ownership Forms
  • Food Co-Ops
  • Most Stores Well-Established
  • Site Selection
  • Personal Conviction Plays a Role
  • Retail Philosophy
  • Profile: Whole Foods Market, Inc.
  • Profile: Fresh Fields
• Health Food Chains
  • Few Major Chains
  • Chains Focus on Non-Foods
  • Profile: General Nutrition Centers (GNC)
• Supermarkets and Mass Marketers
  • Vast Majority of Supermarkets Carry Natural Foods
  • Mass Merchandisers
  • Drugstores
  • Profile: Osco's New Vision
  • Warehouse Clubs
  • Supermarkets Increase Potential Consumer Base for Natural Foods
  • Shelf Integration or Separate Sections
  • Most Supermarkets Lack Commitment to Organics
• Other Outlets
  • Farmers' Markets
  • Profile: New York City's Greenmarket
  • Mail Order
  • Profile: Walnut Acres
  • Real "Alternative" Outlets
• Operating Performance
  • Sales Performance
  • Sales per Square Foot
  • Gross Profit Margin
  • Turnover
  • [Table] Performance of Health and Natural Foods Stores (1993)
  • Number of Wholesale Suppliers Drops
  • Retailers Remodeling, Expanding
  • Foodservice
  • Retailers Adding Refrigerator and Freezer Space
• Retail Advertising and Promotions
  • Most Not Sophisticated
  • Favorite Advertising Media
  • [Table] Retailers' Favorite Ad Media
  • Retail Advertising Budgets
  • Advertising Positioning
  • Retail Promotions
  • Consumer Education
  • Community Service and Goodwill Policies

V. The Consumer

• Consumer Use
  • Many Studies but No Definitive Profile
  • Only 5% of Public Shop in Health Food Stores
  • Education, Job Status, and Affluence Key Factors
  • Education Signals Use of Health Foods
  • Occupation Another Determinant
  • Affluence Points to Health Foods
  • Baby Boomers Prime Consumers
  • Marital Status, Household Size, Children
  • Health Food Stores Strongest in West
  • [Chart] Demographic Characteristics Favoring Shopping in Health Food Stores
• Vegetarians
  • Who Is a Vegetarian?
  • The Vegetarian Times Survey
  • The Roper Poll
  • The HealthFocus Study
  • [Table] Frequency of Using Meatless Meals
  • The Natural Health Survey
  • Reasons for Being a Vegetarian
  • [Table] Single Most Important Reason for Becoming a Vegetarian
  • Teenagers Choosing Vegetarianism
  • Vegetarian Times Subscriber Profile
  • Vegetarians Are Prime Natural Foods Consumers
• Attitudes Toward Health and Nutrition
  • Consumers Shop for Healthy Foods
  • [Chart] Demographic Profile of Health-Conscious Shopper Groups
  • Majority Have Changed Their Diets
  • [Table] Changes Made in Diet Because of Health Concerns
  • Most Americans Follow Healthy Guidelines
  • [Table] Trends in Key Aspects of Diet and Nutrition
  • Men Show Growing Concern About Nutrition
• Organic Foods Purchasers
  • Consumer Use of Organic Foods
  • Age and Education Are Factors
  • Affluence Not a Factor
  • Organic Going Mainstream
  • Produce the Most Commonly Used Product
  • Purchase Trends by Organic Product
  • [Table] Purchase Trends By Organic Product: 1992

Appendix I: Examples of Advertising and Promotions

Appendix II: Names and Adresses of Selected Leading Marketers

Appendix III: Publications in the Health and Nautral Food Fields