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Americans pick organic over natural

26-Jan-2005

Health-conscious consumers are increasingly opting for organic packaged foods over natural foods and beverages, suggests a new report from the National Marketing Institute (NMI).

Sales of packaged organic foods and beverages soared 18 percent in the last year and have now reached $10.9 billion - up 18 percent from $9.2 billion in 2003. This performance narrows the gap with natural foods and beverages, which retained a small advantage with sales of $11.3 billion but grew just 4 percent over the period.

NMI's figures from 2001 show that the naturals category achieved sales of $9.6 billion, whereas organics lagged behind at $7.6 billion.

This marked shift in three short years may be attributed to growing consumer awareness of health and wellness issues. A study published by the Food Marketing Institute in November entitled Shopping for Health 2004 suggested that consumers are purchasing more organic foods because they believe them to be healthier.

Functional and fortified foods and beverages remain the top category of packaged consumer health and wellness goods, reaching sales of $23.4 billion in 2004 (7 percent up on $21.8 billion in 2003) and accounting for 34 percent of the industry.

Sales of vitamin, minerals, herbal and dietary supplements rose 6 percent in the year to $19 billion.

The entire consumer packaged health and wellness industry, which also includes personal care, was worth $68.6 billion in 2004, compared to $63.2 billion last year, according to NMI.

Managing partner Steve French said: "Despite recent economic challenges, consumer spending last year in the health and wellness industry continued to rise."

At a seminar held at SupplySide East in May 2004, French told supplement and food company executives that the industry was ideally placed to take advantage of the low carb consumer trend, since dieters cutting back on carbohydrates have tendency to also leave out fruits and vegetable, resulting in deficiencies.

"This group is an attractive target for vitamins, minerals and herbals," he said. "And they are predisposed to functional products of all types."For 2005, French's prognosis for the industry is just as upbeat: "We project this trend to continue with sales reaching more than $73 billion in 2005," he said.

NMI's findings appear in the 2005 Health and Wellness Trends Report, which will be published in March.

They echo similar studies published by Datamonitor and Reuters Business Insight towards the end of last year, which maintained that functional foods are expected to be the most successful health food products of the future on a global basis. Key products include probiotics, energy-boosting foods and vitamin and mineral supplements.

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