The New Year once again promises to be a full industry roller coaster for everyone from supply side to consumer. I thought that I would be spending most of January gathering data, reporting on year-end, and ensuring that everything is in order to close 2014 activities. In addition to these things, I find myself running full pace into 2015 and examining a number of opportunities that our industry may be facing this year. While in many ways they remain the same challenges of competition, growth, and access to product, what is different is the pace.
I recently attended the Fancy Food Show in San Francisco and was amazed, delighted and frightened by graying lines between grocery channels. The beautiful butterfly was everywhere (Non-GMO Project Verified) and I saw lots of organic lines, including many that I had never seen before. In striking up discussions with folks behind the tables, I learned how more natural and organic product was being marketed into conventional large chains. The discussion was not focused on natural products retailers; this time around, it was focused on mass market. Now, granted these were the vendors that caught my eye were in the “what’s new and hot showcase,” and I tend to ask some pretty leading questions about market strategy, yet I couldn’t help noticing at this show that lots of the products being exhibited were cleaner than what I have been seeing at Expo West lately. So I started asking questions; the answers reinforced my thinking and verified more and more the following:
- Natural products retailers can’t afford to not align as much as possible when it comes to core product attributes. Everyone is concerned about access to clean product. Volume talks, and while we may say “that’s not important”, it is important because we need to have products on our shelves that keep customers coming back, so we can introduce them to the next best sustainable option.
- Everyone wants to be in the market of selling “natural, organic, non-GMO” whether they know what “it” is or not…it just sells.
- With large conventional Consumer Packaged Goods (CPG) companies in a world of hurt as their categories in center store continue to decline with consumers wanting to purchase NGP Verified and organic, the competition for the product will continue. (For example, General Mills has closed a number of plants recently that primarily were cereal production facilities.)
- Large Natural CPG companies also need to clean up their act on product claims. Millions of dollars are being spent on settling “All Natural” lawsuits. Natural is becoming a more difficult term and it is in many of our brands, so this too is a challenge.
- There are not enough organic and non-GMO raw goods available in general. We are already seeing this in parts of the country, and with a few vendors in limited categories.
- Technology is complex, yet will be required to “keep in the game” whether we want it or not. In the end, if we work toward using technology to help us with solutions to the above, we can continue our love/hate relationship with this dynamic that came to life in my generation.
There is so much opportunity for our industry to be stronger, to thrive and grow, if we are willing to change and meet the evolution of it head on! From time to time, I think that the market for natural and organic food can’t keep growing as fast as it has in past years. That we need to slow down and make sure that we are staying connected to our core and our mission.
There are some days when I tell myself, “Okay, Corinne, you don’t have to keep running as fast as you have in the past years.” Yet mostly, I sit here and think about all that I am learning. I think about how we can share more effectively across our industry. I think about the fact that each and every natural products retailer can do more than survive. I think about ways to remake ourselves where necessary, strengthen our operations, improve our pricing, and continue to love the heck out of the work we do every single day. WF
Corinne Shindelar is the CEO of the Independent Natural Food Retailers Association (INFRA).
Posted March 3, 2015