Consumers Continue to Seek Health & Wellness Products in the Wake of Sept. 11 Attacks

There is an old saying in the consumer packaged-goods industry that even in a recession “consumers have to eat.” True enough, but do they have to continue consuming premium-priced organic foods, soy products and dietary supplements? It appears so. Despite a worsening U.S. economic outlook and the impact on consumer confidence of the Sept. 11 terrorist attacks, sales of health and wellness products in mainstream retail outlets continued to grow at rapidly during the month of September.

Newly released data from San Francisco based market research firm SPINS and ACNielsen, based in Stamford, Conn., show that consumers increasingly view natural and organic foods, dietary supplements, and other health-oriented products as an essential part of their overall shopping basket. The information in this analysis was drawn from ACNielsen ScanTrack: SPINS NaturalTrack, a joint scanner-based measurement service for health and wellness items in conventional supermarkets, drugstores and mass merchandisers.

Growth rates vs. a year ago for health and wellness items overall, while slowing somewhat from recent months, remained high, with September 2001 dollar sales increasing 21.5 percent to almost $800 million. Several health and wellness segments remain strong, including:

Premium Food &

Beverages

September saw continued growth in a range of premium categories, indicating that economic uncertainty did not deter consumers from purchasing value-added healthy products. Sales of organic milk, for example, grew 32 percent in September vs. the same period last year, consistent with the 30+ percent gains the category has made for the past several months. Organic shelf stable fruits and vegetables—canned tomatoes, beans and other products—also grew at a robust 24.8 percent in September, the highest growth rate for the category since June 2001. Sales of refrigerated juices and functional beverages, including perishable fruit and vegetable juices as well as nutrient-enhanced “smoothies,” were up 9.6 percent, an increase from August’s growth of 4.8 percent.

Health-oriented Products

Consumers continued to purchase health-oriented products during a time when comfort foods could be substituted. In particular, the health benefits of soy resonated with consumers, who bought soy-based items across a range of categories. Frozen/refrigerated meat alternatives, such as veggie burgers, veggie hot dogs and deli slices, experienced growth of 16.7 percent in September vs. one year ago, higher than the category’s 9 to 14 percent growth over the past few months. Non-dairy beverages, fueled by strong sales of refrigerated soy milk, also grew rapidly, at 45.4 percent in September, consistent with the growth for the category during June, July and August 2001.

Indulgence Foods

Amidst uncertainty and fear surrounding the recent terrorist attacks, shoppers comforted themselves by increasing their purchases in “healthy indulgence” categories. Frozen desserts, including organic and non-dairy items, increased 42.6 percent in September, the category’s highest growth rate in the last four months. Chips, pretzels and salty snacks grew 42.3 percent, and the candy category showed its highest growth of the last four months, 53.7 percent.

Regional Trends

Even in the cities directly targeted by the terrorist attacks, New York and Washington, consumer purchases of Health and Wellness products remained strong. Dollar sales in key segments such as soy products, organic foods and beverages, and convenience foods continued their impressive growth trajectory. In addition, shoppers in these two cities sharply increased their purchases in indulgence categories, with categories such as cookies and snack bars, and chips, pretzels and salty snacks, outpacing their prior regional growth.

Paddy Spence is CEO and Rebecca Enders is business development manager for SPINS, a

San Francisco-based provider of

market research for the health

and wellness industry. For more information, contact 415.957.4400 or www.spins.com.