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FMCG trends: connecting with your consumers - it's only natural

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Australian grocery growth is at its lowest in twenty years. However, some categories and brands are winning despite challenging market conditions.
 
Natural food products are experiencing epic growth right now. The organic industry is estimated to have grown to $2.4 billion this year – an 88% increase from 2012.
 
In this post we're sharing some insights from our speech at the 2018 AIFST Conference. We'll be exploring the "naturals" revolution before digging into the key drivers behind the exploding "naturals" market.
 
P.S. If you want to get your hands on the full white paper, including our future predictions and thoughts on how the food industry can adapt CLICK HERE.

The "naturals" revolution

 
Two-thirds of Aussie households are already buying organic and aggressive growth is set to continue thanks to building consumer consciousness, an ageing population, increasing rates of chronic disease and a strong Chinese export market for “clean” Australian produce.
 
We’re seeing an explosion in niche natural products. Take drinks - whilst soft drink consumption tanks in the wake of the low sugar trend, healthy options are all seeing growth, with Kombucha drinks growing seven-fold in the past two years.
 
The same story applies to many new all-natural products hitting the mainstream such as “bliss balls”, new-age snack bars, plant-based protein and superfood options.
 
We spoke to our online community of Australian shoppers and asked what they look for in food and drink products. From 11 statements ranging from “good for gut health” and “increases my mental performance” to “wholefood” and “environmentally-friendly”, the most commonly cited preference was for "ingredients I recognise as natural” alongside “sugar-free”.
 
51 per cent of respondents expressed a willingness to pay more for a product that is made from all-natural ingredients.
 

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Tightly woven to this trend is the shift towards free-from products. In particular, naturally free-from rather than the traditional processed options.

More than 7 per cent of Australians believe they are gluten intolerant - seven times the number believed to suffer from Coeliac disease.

A similar story is playing out in other categories such as dairy and soy-free. Many consumers are now adopting a diet that, whilst historically was adopted for ethical or spiritual reasons, is now being sought out for the perceived health benefits.

Amongst our online community, 62 per cent indicated that they “pay attention to the free-from information on food and drinks packaging”.

Many Australians are also losing faith in big brands and large retailers when it comes to providing convenient, natural and healthy options:

  • 59 per cent of our respondents indicated they think natural products are much better at meeting their dietary requirements than regular supermarket products.

  • 45 per cent feel that there isn’t a very good range of natural food and drink products available in the supermarket.

  • 43 per cent expressed a belief that supermarket food is less nutritious now-a-days.

It’s clear that there is big gap between supply and demand for today’s mindful consumers… those who are searching for healthy products without sacrificing taste and convenience.

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The lifestyle shift

Let’s dive into four of the key drivers that explain this lifestyle shift towards more natural products. These factors centre around the pillar concept of mindfulness:

MILLENNIALS

In 2018 the world reached ‘”peak Millennial”: the last of this generation have now officially reached age 18, and they will be the reigning economic powerhouse for the coming decades.

They are the largest healthy eating consumer group in Australia and are amongst those most invested in this lifestyle.

The NPD Key Foodservice Trends Report found that these consumers place primary importance in transparency around ingredients.

36 per cent of millennials want to know if products are Australian-owned and grown, followed by whether they are locally grown (at 31 per cent) and whether products have no additives or preservatives (at 24 per cent).

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FOOD AS MEDICINE

As we move away from a time of restriction, calorie reduction and exclusion we move towards a time of nourishment, nutrient density and inclusion.

61 per cent of our survey respondents expressed that they care less about counting calories, and more about the nutrient content of their food and drink.

Consumers are taking their health into their own hands:

44 per cent of respondents also admitted to using food to “prevent, cure or manage a medical condition”, demonstrating that the term ‘food as medicine’ rings particularly true for consumers today.

People are searching for wholesome, functional and fortified foods to help optimise their health.

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PERSONALISED NUTRITION

Consumers are looking to personalise their diet and nutrition to fit their individual needs. Food is becoming less of a commodity and more of a personalised decision.

The endless stream of new tools available to help people gain insight into their health is also generating huge shifts in consumer behaviour and decision-making.

Today’s consumers have access to everything from health apps to DNA testing kits and emerging companies like ph360 Australia, a customised lifestyle program which collects data from the body and uses complex algorithms to deliver personalised health recommendations.

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SOCIAL CONSCIOUSNESS

Today’s consumers care about a business’ integrity and values.

People want to leave a positive impact on the world and, as a result, they are making more conscious purchasing decisions:

  • 83 per cent of our respondents prefer brands that are honest about how they process food and drink products.

  • 61 per cent indicated that they are paying more attention to local brands and small manufacturers now-a-days.

Evidence of this sustainability push is clear to see in Australia amidst the Coles plastic bag scandal as well as the ‘straw-free’ movement.

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Over to you

Hungry for more? We're just getting started! Download the full white paper now to find out how the FMCG industry can adapt amidst this lifestyle shift towards natural products.  PLUS find out of our top 3 future predictions for the "naturals" industry.
 
Download Emerging Trends in Naturals
 
P.S. Subscribe to the blog for more FMCG trends delivered straight to your inbox.
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packaging: the silent salesman

 

Packaging is arguably the most valuable consumer touchpoint; after all, we all judge books by their covers.

 

The risks of poor packaging design are huge, and customer alienation can lead to severe losses in sales.

 

Do you understand the mind of your shopper, and what leads them to purchase? Packaging research is the essential first step in the pack design (or redesign) process.

 

Download our 8 top tips to help you navigate the difficult journey, maximise opportunities and avoid the common pitfalls.

 

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