As the sun set, I finished day one at the Palm Court with Indian food, a glass of beer, and smart conversation. All natural and organic of course! Today was about learning and getting a sneak peek at some of the products that will be exhibited the next three days.

In the morning our Brand Engine team (Heidi, Eric and I) listened to four speakers – Patrick Rea, Michael Movitz, Carlotta Mast and Bob Burke – bring their perspectives on the year ahead. With two different research methodologies, Patrick and Michael forcasted similar growth rates for the industry in the coming year. Somewhere around 7.5% and that the years of double-digit growth rates may be history. The only exception, is the natural household products which is still an emerging category.

Michael, in his analysis of the industry, provided some important insights on the natural products consumer and marketplace. Focusing on the consumer side, here are the key insights:

• The top two consumer segments (very committed, 3% and heavy, 17%)  purchase 80% of all natural products
• The top two consumer segments have increased their spending 12% over the last year. The next segment (transitional, 25%) was down 12% and the last segment (trial, 55%) was down 1%
• Strongest growth is expected in the Natural Standard (e.g. Seventh Generation) and Specialty Natural (e.g. Late July) categories – both considered “authentic” natural products
• The Natural Perception and Conventional Naturals (e.g. Greenworks) segments are expected to experience slower growth
• Of US households, 96% have purchased natural products, 61% have purchased organic

The big take away for me was the word authentic. It’s an imperative for our branding process. The brand stories we design for our clients first and foremost are authentic. Consumers demand it. And the natural product consumer demonstrates the importance of authenticity by spending their dollars on those brands that are authentic. Another insight that should come as no surprise, is that consumers who are the most committed to your (brand, cause, product, category, etc.) will spend the most (time, effort, money, etc.). The more you know about why your most loyal consumers buy your product, the more successful your brand. It’s all about focus. And I don’t mean focus groups. You need to get into your consumers lifestyle and that cannot be quantified on an excel spreadsheet.

From a marketplace view here are some key insights:

• Private label is a growing presence (up 44%) and worthy competitor with price not the only decision factor – quality and variety are on par with establish brands
• The growth of Whole Foods over the last 10 years has been so significant that it has become a third market channel
• Healthy products drive spending but it must be connected with value
• Retailers are cutting out SKUs

The marketplace insight parallels the consumer insight. For brands to succeed, they need to bring value, be differentiated, and be meaningful. Now we are talking.

Bob spoke of whats hot including: sustainability, native sugar, biodynamics, precycling, bulk, anti-aging, ancient grains, affordable indulgences, fair trade, gluten-free, probiotics, natural cleaning.

Stay tuned for more from Anaheim.

This entry was posted by Will Burke on Thursday, March 5th, 2009 at 11:59 pm and is filed under Branding, Consumer, Culture, Green Lifestyle, Random. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.