business news in context, analysis with attitude

Natural Foods Merchandiser has published its 2007 Market Overview, concluding that U.S. natural products sales grew 9.7 percent in 2006 across all channels, reaching $56.76 billion in total sales.

Other results published in the overview:

• Natural personal care sales grew by 18.4 percent to $2.78 billion and natural pet product sales increased 15.1 percent to $367 million.

• Other organic categories showing strong growth were coffee and tea at 23.3 percent and nutrition bars at 22 percent.

• Food sales in natural product stores were up 11.7 percent, with the hottest sales categories being fresh meat and seafood, as well as beer and wine. Produce remains the largest category with sales of $3.3 billion, up 11.5 percent over 2005.

• The retail channel accounted for 81.2 percent, or $46.06 billion, of total sales. For the second consecutive year, natural products retailers drove double-digit growth—this year at a 10.7 percent rate.

• Natural products retailers accounted for close to 50 percent of total market revenues with sales of $28.27 billion.
KC's View:
Healthy growth numbers…but there’s another point we want to make here.

Memo to the US Federal Trade Commission (FTC) – these sales are just a small component of US food sales, and these sales are generated by a wide variety of retail venues.

This is illustrated by the fact that natural food retailers generate just 50 percent of all natural food sales…and a far smaller percentage of total food sales.

The FTC – just like food retailers of all stripes – has to realize that what we’re really talking about when it comes to food sales is “share of stomach.”