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Natural & Fresh Food and Drinks

Published by: Datamonitor

Published: Nov. 6, 2003 - 88 Pages


Table of Contents


TABLE OF CONTENTS

CHAPTER 1 EXECUTIVE SUMMARY 3

Hot topic 3

The future decoded 3

Action points 5

CHAPTER 2 THE FUTURE DECODED 12

Definition and Introduction 12

Defining the natural and organic and fresh concepts 13

Consumer trends in natural and fresh food and drinks 14

Consumers are losing confidence in the food industry 14

Growing health and wellness concerns are affecting purchases 16

Greater trust in natural and fresh foods is helping growth 18

More consumers are turning to natural and fresh goods 19

Category and country trends in natural and fresh goods 21

Natural and fresh consumer characteristics 24

Consumer education is key to attracting non-adopting consumers 25

Organic and natural consumers are demographically diverse 28

Key life events form ‘trigger points’ for natural food adoption 31

Consumer attitudes and behavior towards natural and fresh 34

Freshness is a key quality indicator for consumers 35

Consumers will increasingly seek proof of local authenticity 39

Consumers increasingly perceive natural to be fashionable 40

Consumers often adopt a phased approach to buying natural 41

The channel influences consumers’ perceptions 42

Buying behavior of natural buyers reflects attitudinal groupings 43

Natural consumers’ perception of improved taste and quality vary 48

Few core natural shoppers eat out 49

Consumers perceive natural food packaging to be bland 50

Consumers are willing to pay only small premiums for organics 52

Consumers are seeking innovative natural product propositions 58

Conclusions 62

CHAPTER 3 ACTION POINTS 64

Offer natural and fresh as solutions to consumers’ food fears 64

Ensure that all product claims are fully justified and supported 65

Develop sustained, targeted consumer education programs 65

Use promotional labeling presenting small ‘did you know’ facts 66

Tell the consumer the product story 68

Don’t assume consumers understand organic labeling 68

Make the distinction between organic and natural foods clear 69

Focus on certain consumers with targeted education 69

Increase efforts to promote “external” benefits of organics 69

Make use of ‘comparative advertising’ 70

Promote natural and organic lifestlyes as cool 70

Targeting this is likely to require updated packaging 70

Focus campaigns on those likely to adjust purchases 71

Target seniors growing awareness and concern for health 71

Target the switching nature of the Newly Employed 72

Target empty nesters’ willingness to try new things 72

Target mothers who want their children to snack healthily 72

Pursue a “high quality, good taste” positioning 73

Enhance and promote product quality and taste first and foremost 74

Ensure natural and organic products are aspirational 75

Use packaging formats that enhance freshness 76

Avoid simply slashing prices 77

Pursue a holistic natural positioning through packaging 77

Focus on core natural buyers’ unmet service channel needs 78

CHAPTER 4 APPENDIX 79

Supplementary data 79

Report definitions 85

Research methodology 87

Bibliography 87

How to contact experts in your industry 89



LIST OF TABLES

Table 1: European consumer interest in natural (including organic) and fresh food and drinks, 2002-2003 12

Table 2: Percentage and total number of natural food and drink consumers by usage status, 2002-2007 20

Table 3: Value of natural (including organic) food and drink markets, by key product categories, 2002-2007 21

Table 4: Value of organic food and drink markets (€bn), by key product categories, 2002-2007 22

Table 5: Organic market value (€bn) and growth rates, by country, 2002-2007 23

Table 6: Value of the European fresh food and drink market (€ bn), by country, 2002-2007 24

Table 7: Change in consumption habits by income segment 33

Table 8: FreshDirect 38

Table 9: Structure of the European organic food retail market, 2002 42

Table 10: Profiling two types of natural and organic food consumers 44

Table 11: Quantifying the different attitudinal groups who constitute both loyal and occasional users of natural food and drinks 45

Table 12: The European consumers’ willingness to pay for organic foods (% of consumers willing to pay premium) 54

Table 13: Attitudes of ‘occasional’ and ‘non-buyers’ of natural and organic goods towards buying more products if pricing issues were removed from the purchase evaluation, by category, 2003 56

Table 14: Increasingly new product offerings are positioned and marketed against natural ingredient contents 60

Table 15: A new approach to organic packaging - Yeo Valley’s yoghurts 71

Table 16: Green & Black’s packaging typifying the indulgent positioning required for organics 75

Table 17: Emphasizing a product’s freshness through visuals 76

Table 18: European natural food and drink market values (€bn), excluding organics, 2002-2007 79

Table 19: European organic bakery and cereals market (€m), by country, 2002-2007 79

Table 20: European organic dairy food market (€m), by country, 2002-2007 80

Table 21: European organic fruit and vegetables market (€m), by country, 2002- 2007 80

Table 22: European organic juices market (€m), by country, 2002- 2007 81

Table 23: European organic meat market (€m), by country, 2002- 2007 81

Table 24: European organic ready meals market (€m), by country, 2002- 2007 82

Table 25: European chilled food market (€bn), by country, 2002-2007 82

Table 26: European frozen food market (€bn), by country, 2002-2007 83

Table 27: Ethical purchasing behavior in Europe, 2001 83

Table 28: Percentage and total number of organic food and drink consumers by usage status, 2002-2007 84

Table 29: Organic agriculture in Europe, 2002 85

Table 30: Definitions used in this report 85





LIST OF FIGURES

Figure 1: Food issues and levels of concern, 2003 15

Figure 2: The change in European consumers’ concern about health and wellbeing, 2002-03 17

Figure 3: European consumers’ response to health and wellbeing concerns, 2003 18

Figure 4: Consumer trust in natural and fresh products relative to conventional food and drink products, 2003 19

Figure 5: European consumers perception about communication clarity in the marketing of organic and natural food and drinks, 2003 27

Figure 6: Age distribution of European natural and fresh food and drink consumers, 2003 30

Figure 7: Age profile and purchase motivations for core, secondary and sporadic consumers of organic and natural food and drinks 31

Figure 8: European consumer motivations for purchasing organics frequently, 2003 46

Figure 9: European consumer opinion on the current design of organic and natural product packaging, 2003 51

Figure 10: Consumer perception positioning for different classifications of food and drinks 53

Figure 11: Price premium that occasional and non-users of organics and natural products would find acceptable providing certain other conditions were met, 2003 57

Figure 12: European consumers’ opinions on what factors will increase their consumption of natural food and drinks, 2003 62





Abstract

Introduction
Natural and fresh products, with their perceived product safety and health benefits, are becoming more popular. The number of European natural food buyers is set to grow from 153 million in 2002 to 245 million in 2007. Consumer demand for better quality and tasting food and drinks has lead to steady growth in fresh foods market, which will grow to exceed €200 billion between 2002 and 2007

Scope
Analysis of consumer trends in natural and fresh food and drinks, drawing on Datamonitor’s Consumer Insight survey and market data expertise

Analysis of natural, fresh and organic market values and growth rates. Consumer profiles are also analyzed

Detailed Action Points pinpoint how to devise effective marketing strategies that appeal to both buyers and non-buyers of natural and fresh products

Data includes detailed analysis of seven leading country markets from 2002-2007: France, Germany, Italy, The Netherlands, Spain, Sweden and the UK

Report Highlights
The European natural food and drinks market, driven by extremely strong growth in certain sectors will surpass the EUR20 billion mark between 2002 and 2007. In excess of 50% of the natural market is accounted for by organic food, sales of which are forecast to grow at an annual average rate of 10.4% over the same period

Natural consumers fall into one of three attitudinal groups - ‘Foodies’, ‘Greenies’ and those who live lifestyles of health and sustainability (LOHAS). Each influences purchasing motives and frequency

In our Consumer Survey 51% of respondents stated that they trust organic and natural products more than conventional food and drinks, suggesting that this has contributed to the positive development of the European natural and fresh food and drinks markets and provides a rationale for marketers continuing their activities in this area

Reasons to Purchase
Exploit market opportunities by spotting trends using our unique market, demographic and attitudinal data and analysis

Understand the consumer attitudes and behaviors that are shaping the growing interest in all things natural and fresh

Boost the success rate of product development and marketing campaigns by understanding the obstacles to market development and how to overcome them



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