Health and Natural Food Store Market
Feb 1, 1996
112 Pages - Pub ID: LA329076
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Abstract Table of Contents Search Inside Report Related Reports

  1. Executive Summary
    Introduction
    • Report Methodology
    • Market Definition
    • Historical Overview of Market
    • Five Types of Health and Natural Food Stores
    • [Graphic] U.S. Health and Natural Food Stores: Market Share by Outlet Type, 1995 (percent): Natural Food Supermarkets, Natural Food Stores, Health Food Chains, Health Food Stores, Natural Food Cooperatives
    • Product Mix: Vitamins Comprise the Bulk of Sales
    • Other Store Characteristics

    Market Size and Growth
    • Market Reaches $7.1 Billion in 1995
    • Sales to Top $14 Billion by 2000
    • [Table] The U.S. Health and Natural Food Store Market, 199l-2000 (dollars)
    • Number of Stores Climbs to 9,245
    • Factors Affecting Market Growth

    The Retailers
    • Natural Food Supermarkets: Over 700 in the United States
    • Whole Foods Is Nation's Largest
    • Natural Food Stores: Over 2,000 Nationwide
    • Health Food Chain Stores: Nearly 3,000 Nationwide
    • Health Food Stores: 3,200 Nationwide
    • Natural Food Cooperatives: 325 Nationwide
    • The Competition Heats Up
    • Smaller Stores Finding Product Niches
    • Promotional Activities Decline While Advertising Increases
    • The Consolidation of Distributors

    Retail Competition
    • Natural Products Increasingly Important to Mainstream Retailers
    • The Merchandising of Natural Foods
    • Drugstores Account for Majority of Supplement Sales

    The Health and Natural Food Store Shopper
    • 4.9% of Adult Consumers Shop Regularly at Health and
    • Natural Food Stores
    • Demographic Profile of Consumers
    • [Chart] Demographic Characteristics Favoring Shopping at Health and Natural Food Stores
    • Why Consumers Shop at Health and Natural Food Stores
    • What Consumers Buy
    • [Table] Products Purchased by Over Half of Independent Health and Natural Food Store Shoppers, 1995
  2. Introduction
    Market Definition
    • Stores Defined by Product Mix, Suppliers
    • Variant Views: The Meaning of "Health" and "Natural"
    • Retailers Set Product Parameters
    • The Philosophy of Natural Foods
    • Historical Overview: From Battle Creek to Haight-Ashbury
    • The First Health Food Stores
    • World War II Spurs the Industry
    • The First Modern Natural Food Stores
    • Stores Emerge as Expression of the 1960s Counterculture
    • Whole Foods Supermarkets Set the Pace

    Types of Stores
    • Five Types of Health and Natural Food Stores
    • Natural Food Supermarkets
    • Natural Food Stores
    • Health Food Chains
    • Health Food Stores
    • Natural Food Cooperatives

    Store Characteristics
    • Vitamins Comprise the Bulk of Sales
    • [Table] U.S. Health and Natural Food Stores: Percent of Sales by Product Category, 1992-1994 (percent)
    • Foods Account for Largest Share of Full Lines
    • Product Mix Changing
    • Product Mix Varies by Store Type
    • Store Size Increasing
    • Business Hours
    • Store Location
    • Profits, Store Size, and Rent by Region
    • [Table] U.S. Health and Natural Food Stores: Average Sales, Store Size, and Rent by Region, 1994 (dollar and square foot)
    • Pacific Region Remains the Strongest Market
    • Store Profits and Profit Margins
  3. The Market
    • [Graphic] U.S. Health and Natural Food Stores: Retail Dollar Sales and Growth, 1991-1995 (dollars)

    Market Size and Growth
    • Market Tops $7.0 Billion in 1995
    • One of Fastest-Growing Food Retailing Segments
    • 1993 a Strong Year for Sales
    • [Table] U.S. Health and Natural Food Stores: Retail Dollar Sales and Growth, 1991-1995 (dollars)
    • Number of Stores Climbs to 9,245
    • [Table] Number of U.S. Health and Natural Food Stores, 1993-1995 (number and percent)
    • [Graphic] U.S. Health and Natural Food Stores: Sales by Outlet Type, 1994 vs. 1995 (dollars)
    • [Graphic] U.S. Health and Natural Food Stores: Market Share by Outlet Type, 1995 (percent)

    Market Composition
    • Natural Food Supermarkets Lead in Sales and Growth
    • [Table] U.S. Health and Natural Food Stores: Sales by Outlet Type, 1994-1995 (dollars): Natural Food Supermarkets, Natural Food Stores, Health Food Chains, Health Food Stores, Natural Food Cooperatives
    • Natural Food Supermarkets Account for Largest Share of Sales
    • [Graphic] U.S. Health and Natural Food Stores: Market Share by Outlet Type, 1994 vs. 1995 (percent) Natural Food Supermarkets Account for Over Half of Overall Market Growth
    • [Table] U.S. Health and Natural Food Stores: Percentage of Market Growth by Outlet Type, 1994-1995 (dollars and percent): Natural Food Supermarkets, Natural Food Stores, Health Food Chains, Health Food Stores, Natural Food Cooperatives
    • Health Food Stores Lead in Number of Outlets
    • [Table] U.S. Health and Natural Food Stores: Number of Units by Outlet Type, 1993-1995 (number): Natural Food Supermarkets, Natural Food Stores, Health Food Chains, Health Food Stores, Natural Food Cooperatives

    Factors Affecting Market Growth
    • A Health-Aware Population
    • Nutritional Priorities Boost Sales of Natural Foods, High
    • Among Aging Baby Boomers
    • Generation X Interest in Vegetarianism Yields New Shoppers
    • Positive Studies—and Greater Sales—for Vitamins and
    • Other Supplements
    • Negative Press Has Impact, But Only Temporarily
    • Mainstream Shoppers Seeking Health Products
    • Interest in the Environmental Movement
    • Natural Foods Not Yet Popular with Average Consumer,
    • Have Room for Growth
    • The Nutritional Labeling and Education Act
    • Empowers Consumers
    • The Dietary Supplement Health and Education Act Supports
    • the Market
    • Third-Party Literature Enhances Retailers' Role
    • as Information Centers
    • Natural Food Retailers Benefit from Consumer Confidence
    • Natural Food Supermarkets Spur Sales for Overall Industry
    • Mass-Market Outlets Increase Consumer Exposure
    • Health Food Manufacturers Seek Distribution
    • Beyond Traditional Outlets
    • Mass Market Targets the Health Food Shopper
    • Supermarkets Learn How to Merchandise Natural Food
    • [Graphic] U.S. Health and Natural Food Stores: Projected Growth of Retail Sales, 1996-2000 (dollars)

    Projected Market Growth
    • Robust Growth to Push Market Past $14 Billion by 2000
    • [Table] U.S. Health and Natural Food Stores: Projected Growth of Retail Sales, 1996-2000 (dollars)
    • Stores to Number Over 10,400
    • [Table] U.S. Health and Natural Food Stores: Projected Growth in Number of Outlets, 1996-2000 (number)
  4. The Retailers
    Natural Food Supermarkets
    • The Largest and Fastest Growing Sector
    • Whole Foods Is National Leader
    • Fresh Fields Follows
    • The Merger of Alfalfa's Markets and Wild Oats Markets
    • Other Natural Food Supermarket Chains
    • [Table] Top U.S. Natural Food Supermarket Chains (number and dollar)
    • Retailer Profile: Whole Foods
    • Retailer Profile: Fresh Fields
    • Retailer Profile: Wild Oats Markets
    • Retailer Profile: Alfalfa's Markets
    • Retailer Profile: The Real Food Company
    • Retailer Profile: Greentree Grocers
    • Retailer Profile: Mrs. Green's Natural Markets
    • Retailer Profile: Mollie Stone's Markets

    Natural Food Stores
    • An Emphasis on Food Over Supplements
    • Two Health Foods Business' Stores of the Year
    • Retailer Profile: Country Sun Natural Foods
    • Retailer Profile: Whole Foods Market Uptown

    Health Food Chains
    • A Rapidly Expanding Sector
    • GNC: A Retailing Powerhouse
    • Other Health Food Chains
    • Retailer Profile: General Nutrition Centers
    • [Table] Average Product Mix: GNC vs. Independent Health Food Stores, 1993 (percent): Vitamins, Minerals, Sports Nutrition, Diet Aids, Food, Herbs, HBC, Other/Fitness and Apparel
    • Retailer Profile: Great Earth Companies
    • Retailer Profile: Fred Meyer

    Health Food Stores
    • The Backbone of the Industry
    • Retailer Profile: South Beach Health Food

    Natural Food Cooperatives
    • Alternatives to Business as Usual
    • Retailer Profile: Puget Consumers' Co-op
    • Retailer Profile: Boise Consumer Co-Op

    Competitive Trends
    • Competition Is Increasing
    • Natural Food Supermarkets Set the Pace
    • Acquisition Activity Ups the Ante
    • 13%-14% of Retailers Plan Store Openings in 1995
    • Caveat: Fresh Fields' Richmond Store Unsuccessful
    • Ambitious Plans for Store Expansion
    • Natural Food Supermarkets Battle for Key Locations
    • Wild Oats vs. Alfalfa's: A Rivalry Ending in Merger
    • Smaller Stores Finding Product Niches
    • Expanding Product Mix vs. "Boutique" Approach
    • Natural Food Supermarkets and Chains Take on Smaller Stores

    Marketing and Retailing Trends
    • Cost-Cutting Measures
    • Natural Food Retailer's Version of Slotting Fees
    • A Decline in Promotional Activity
    • In-Store Demos Are the Most-Used Promotion
    • [Table] Percent of U.S. Health and Natural Food Stores Using Promotional Activities: By Type, 1994
    • Amount Spent on Advertising Increasing
    • Continued Emphasis on Employee Training
    • Increase in Database Marketing and Other Technologies
    • Improved In-Store Merchandising
    • Product Mix Shifts to Higher-Ticket Items
    • Growth Product Categories
    • The Presence of Organic
    • Merchandising Organic
    • More Freezer Space for Convenience Foods
    • A Move Toward Gourmet
    • Crossover Items
    • The Growth of Private Label

    International Marketing and Retailing Trends
    • U.K. Stores Training Staff
    • A Growing Number of Health Food Stores in Central
    • and South America

    Retailer Advertising and Promotion
    • Yellow Pages Most Common Advertising Vehicle
    • [Table] Percent of U.S. Health and Natural Food Stores Using Advertising Media: By Type, 1993 vs. 1994
    • Advertising in Weekly Newspapers Also Remains Common
    • GNC—A $20-Million-Plus TV Advertiser
    • Educational Advertising
    • Examples of Promotional Materials

    Distribution Trends
    • Four Kinds of Distributors
    • Consolidation of Distributors
    • Distributors Offer Wide Range of Services
    • Forward Buying by Distributors
    • By-Passing the Distributor
  5. Retail Competition
    Mass-Market Overview
    • 60%-80% of Mass-Market Stores Carry Some Natural Products
    • Natural Products Increasingly Important to
    • Mainstream Retailers
    • Importance of Natural Products to U.S. Mass-Market
    • Retailers, 1992, 1994, 1996 (percent of companies)
    • A Health and Natural Food Outlet's Main Competition
    • Is from Supermarkets and Drugstores
    • [Table] The U.S. Health and Natural Food Store: Type and Average Number of Competing Stores, 1994 (number): Drugstores, Supermarkets, Other Health Food Stores, Produce Stand/Farmer's Market

    Competition for Food Product Sales
    • A Customer-Driven Market
    • Supermarkets Eye Growing Industry
    • Higher Profits Margins Also Are Lure
    • Food Fights: New Threats from Natural Food Supermarkets
    • But Natural Food Supermarkets Also Foster
    • Mass-Market Opportunities
    • A More Reliable Supply of Natural Foods
    • Organic Is the Draw
    • 200+ Natural Items Typically Carried by Supermarkets
    • Supermarkets Purchase from Natural Food Distributor;
    • Some Use Separate Buyer
    • Integration vs. Segregation of Natural Foods
    • A Store Within a Store
    • A Complete Conversion: Wild By Nature
    • A Way for Independents to Differentiate
    • Health Information Centers: A Way for Supermarkets to Imitate
    • Mainstream Grocers Target the Alternative Shopper
    • [Chart] Recent Natural Food Activity by U.S. Supermarkets Competitor Profile: Harry's Farmers Markets
    • Competitor Profile: Trader Joe's
    • Food Buying Clubs Are in Decline
    • But Consumer Supported Agriculture Programs Are Growing
    • The Mail-Order Option

    Competition for Vitamin, Mineral, and Nutritional Supplement Sales
    • Most Vitamin and Mineral Sales Are Through Mass Market
    • [Table] U.S. Vitamin and Mineral Sales: Share by Retail Outlet, 1989 vs. 1994 (percent): Mass Market, Health Food, Direct Selling, Mail Order, Other
    • A Different Product Base
    • Drug Chains Expand Herbal and Homeopathic Offerings
    • Drug Emporium's Health Emporium
    • Independent Drug Retailers Differentiate Themselves
    • By Carrying Natural Products
    • Natural Product Franchises Help Independent
    • Drugstores Differentiate
    • Supermarkets and Natural VMS Products
    • Discounters a Growing Market
    • Mail-Order Sales Declining
    • Multi-Level Marketing Sales

    Competition for Health and Beauty Care Sales
    • Little Direct Competition
    • Exception: The Body Shop
    • Department Stores Not Yet a Threat

    Health and Natural Food Stores Respond
    • Health and Natural Food Stores Profit from Competition
    • A Broader, Deeper Selection
    • Promotion of Crossover Brands Through Special Pricing
    • Closer Attention to Customers
    • [Table] Natural Food vs. Mainstream Retailers: Types of Promotional and Educational Activities Used, 1994 (percent)
  6. The Health And Natural Food Store Shopper
    The Health and Natural Food Store Shopper
    • The Simmons Consumer Survey
    • 4.9% of Adults Are Regular Customers
    • More Women than Men Are Customers
    • Boomers Comprise the Bulk of Customers
    • College Graduates Know Where to Shop
    • Professional/Managerial Workers Are Important to Market
    • A Middle-to-Upper-Income Skew
    • A Single and Two-Person Household Skew
    • Western Region Leads the Way
    • [Chart] Demographic Characteristics Favoring Regular Shopping at Health and Natural Food Stores

    The Shopper in Independent Stores
    • The Whole Foods Survey of Energy Times Readers
    • Majority of Respondents Are Women, Aging Baby Boomers
    • Two in Five Shop Once a Week or More
    • Married Without Children
    • Well-Educated and Professional
    • A Mid-Range Household Income

    The Shopper in Fresh Fields' Market Areas
    • The Spectra Marketing Systems Survey
    • Customer Base Is White Collar, Educated, and Affluent
    • Age 45-54 Is Prime Bracket

    Why Consumers Buy
    • Improving Health Is Primary Motivation
    • Lower Prices, Better Information, and Broader
    • Selection Would Boost Sales
    • [Table] Which Features Would Bring Consumers More Frequently into Health and Natural Food Stores (percent) Environmental and Organic Products Are Draws

    What Consumers Buy
    • Herb Tea Is Most Popular Among Spectrum of Foods
    • [Table] Foods Purchased in Independent Health and Natural Food Stores: By Percentage of Shoppers, 1995
    • Vitamin C Is Most Popular Among Spectrum of Supplements
    • [Table] Vitamins and Other Supplements Purchased in Independent Health and Natural Food Stores:
    • By Percentage of Shoppers, 1995
    • Garlic Leads Among Herbal Products
    • [Table] Herbal Products Purchased in Independent Health and Natural Food Stores: By Percentage of Shoppers, 1995
    • Soap/Cleansers Lead Among Health and Beauty Care Products
    • Literature, Homeopathics, and Other Products Purchased
    • [Table] Products Purchased by Over Half of Independent Health and Natural Food Store Shoppers, 1995

    Appendix I: Examples Of Consumer Advertising And Promotions
    Appendix II: Addresses Of Selected Retailers
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