LONDON--(BUSINESS WIRE)--Technavio’s latest report on the natural and organic food market in the US provides an analysis on the most important trends expected to impact the market outlook through 2019. Technavio defines an emerging trend as a factor that has the potential to significantly impact the market and contribute to its growth or decline.
The top four emerging trends driving the natural and organic food market in the US according to Technavio’s food and beverage research analysts are:
Rise in number of private label brands
Private label natural and organic food brands are becoming more prominent in the US as they are priced lower than branded organic food products because of their operational efficiency. In the US, store brand sales primarily of food categories such as dairy products, have outpaced the sales of food manufacturers’ brands, generating gross margins of more than 35%. Therefore, the rise in private label brands of natural and organic food is increasing the sale and consumption of natural and organic food.
“Many large retailers such as Wal-Mart, Costco, and Safeway have ventured into this market to target the organic food and health food shopper. Amazon is expected to offer a comprehensive list of organic products at low costs, which will expand the consumer base. Thus, the availability of private label brands is a new trend that is expected to drive the growth of the natural and organic food market in the US in the coming years,” says Arushi Thakur, lead food research analyst from Technavio.
Rise in import of organic food
Another major trend impacting the growth of the natural and organic food market is rise in the imports of organic food. Producers of organic food and beverages in other countries have a huge business opportunity to tap the US market as the country's demand for organic food is exceeding its supply. Although domestic production is high, it does not sufficiently meet the growing requirement for organic food. As a result, the US is highly dependent on the import of organic food ingredients and products from other major organic food producing countries. For instance, the US is dependent on India for organic mangoes, tea, and rice.
Rapid growth in demand for packaged organic baby food products
Organic, nutrient-rich baby food products are free from toxins, antibiotics, and pesticides and help in the healthy development of children. Hence, there has been rapid growth in demand for packaged organic baby food, as parents in the US have increasingly become concerned about the food they provide to their infants and toddlers. In 2011, the US accounted for the largest market for organic baby food and formula products.
Many companies are acquiring small organic baby food companies to enter and compete in this niche segment. For instance, Hain Celestial Group acquired Ella’s Kitchen, an organic baby food company in 2013, to expand its product portfolio of organic baby food.
“The US market for packaged organic baby food is expected to grow in the coming years because of the growing educated population, increasing awareness among parents of organic food, and the anticipated economic recovery,” says Arushi.
Rise of conspicuous consumption
The practice of purchasing or consuming luxury products to display an individual's wealth in the country is another factor that is expected to drive the demand for natural and organic food. As organic foods are more labor-intensive to produce and can perish faster than conventional foods, they are priced at a premium and purchased primarily by high-income consumers. Though health reasons are the biggest driver of natural and organic food demand, purchasing these products can also be attributed to an individual's status, signifying refined tastes and the ability to afford the luxury of eating healthier and more natural foods.
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