Consumer View: Organic Growth

]>Retailers and consumers are hungry for natural/organic food and beverages. The market for natural/organic food and beverages is ready to sprout, particularly when you consider the current retail landscape. While many mainstream traditional retailers (supermarkets) have been steadily in the organic/natural game (with Wal-Mart only dabbling in the category but recognizing its strength), there remains the "big three"—Whole Foods, Trader Joe's, and Wild Oats—with the most market share. And, according to a recent Packaged Facts report, the U.S. market for natural/organic has experienced significant gains since 2002, and shows no signs of slowing as consumers cast their votes for healthier (and socially correct) lifestyles. Consider these numbers: The U.S. market for natural/organic food and beverages totaled approximately $28.3 billion in 2005, up 11.9 percent from $25.3 billion in 2004.

Several mainstream supermarket chains, including H.E. Butt, SuperValu, Publix, and Bashas, have launched their own natural foods supermarket formats, viewed as key long-term growth initiatives for these retailers. Meanwhile, leaders Whole Foods, Wild Oats, and Trader Joe's expect to expand both store count and sales, as many states remain virgin territory for the big three. Whole Foods, for example, plans to increase its store count by 25 to 30 stores per year through 2010, with a stated goal of $12 billion in annual sales and a possible store count of 600.