James Tenser

Market Baskets See Organic Sales Growth

August 17, 2010

FROM RETAILWIRE:
While much of the reporting in recent years has shown consumers trading down in grocery stores, a new survey shows demand for higher-priced natural and/or organic products on the upswing. What is your takeaway from the big increase in the numbers of consumers who report that natural and/or organics make up at least 25 percent of their food purchases?      [more...]

It's heartening to hear news that sales of unrefined, natural, organic, low-fat, reduced-sugar and chemical-free foods are on the upswing--even if the data seem suspect. If there is a real consumption trend afoot, we may speculate that its principle drivers are the wider distribution of such products and the reformulation of others.

In other words, if you believe behavioral studies that indicate shoppers make most of their final take-away decisions at the shelf, then the convenient availability of healthier choices at the point of decision may be the primary driver of sales growth. Production and availability of natural and organic foods is on the increase, and the number of retail locations carrying them is also rising.

So...is this "light green," healthier-food purchase trend demand-driven or supply-driven?

Because my bias is to look for structural explanations first, I'm leaning more toward the supply side. That's something for the fast-food merchants to think about too.