Natural Retail Channel Poised for Continued Growth

SAN FRANCISCO—Strong sales increases in natural foods retail environments in at least seven categories indicate that the natural retail venue can expect robust continued growth, according to recent market research by SPINS, based here.

Specifically, sales of milk, skin-care products, meal replacements, refrigerated juices and functional beverages, pet food and pet-care items, and sweeteners all grew at 30%-plus rates during the past six months. Additionally, energy bar sales grew a healthy 17.7%.

All the categories gained through improved merchandising, but additional separate factors influenced each:

n Milk sales, for example, grew as a result of continued and growing awareness of bovine growth hormone issues, SPINS says.

n Refrigerated juices and functional beverages scored high growth rates through distribution gains.

n Skin care products sales also scored through distribution but appear to have garnered growing consumer interest as a viable alternative to high-end department store cosmetics.

n Meal replacement sales increased due to improved promotions and distribution gains, especially in the ready-to-drink segment.

n Pet food and pet-care products sales benefited from consumer interest in healthier alternatives to mainstream pet food products, which boosted pet food sales in particular some 44% in the natural retail channel.

n Energy bar sales are growing as a result of increased distribution at the front end and new-product offerings.

n Natural sweetener sales gains are attributed by SPINS to changing consumer perceptions about health and environmental issues surrounding white sugar.