In its recently released market data for the 52 weeks ending November 24, 2018, Nielsen has provided some fascinating insight about key product segments, shopper behavior patterns and influential consumer groups for the U.S. organic market.
NOTABLE HIGHLIGHTS
Millennials
– Increased spending on organic by 13.8%
– Made 9.8% more trips to purchase organic products, compared to a year ago
Hispanics
– Increased spending on organic by 13.4%
– Made 9.6% more trips to purchase organic products, compared to a year ago
Top Selling Categories Among Organic Products
(Dollar Volume / Sales Growth)
| Category | Total Sales | Sales Growth | Unit Growth |
|---|---|---|---|
| Organic Health & Beauty Care Products | $853M | 20% | 19% |
| Organic Baby Care | $566M | 10% | 10% |
| Organic Alcohol | $141M | 33% | 28% |
| Overall U.S. Organic Market | $21B | 9% | 8% |
KEY TAKEAWAYS
1) If organic brands take anything away from this Nielsen report it should be this: the shopping preferences of Millennials and the U.S. Hispanic population must be taken into account when developing products and devising marketing strategies.
While it may be well known that Millennials are a critical segment, I do not believe the importance of the Hispanic demographic is widely appreciated or understood. Rarely, if ever, do I hear organic brands talk about how they are going to focus on this market segment or create products geared toward this specific group.
With the latest U.S. Census Bureau data pegging the Hispanic population at 58 million and with organic brands facing an increasingly competitive environment, targeting this demographic — which has demonstrated a serious appetite for organic — could be a smart move.
2) The demand for organic is exploding in the non-food market, particularly with organic alcohol and health & beauty care products.
People are coming to realize that organic is not just something to be prioritized only at the dinner table, but that organic is a necessity in all areas of life. Needless to say, this bodes very well for the industry as a whole because it indicates that a significant shift in the consumer mindset is taking place.
3) The difference between what Nielsen reports as the total market size of the U.S. organic market ($21 billion) and what the Organic Trade Association reported last May ($49 billion) is nothing short of jarring.
Although we are not comparing apples to apples — Nielsen’s data is for 2018 while the OTA’s is for 2017, and both organizations are using different sources and methods to compile their numbers — the total market sizes of organic are not even remotely close. We are talking about a $28 billion dollar difference, and the number is probably more than $30 billion if we compare 2017 data from each organization.
Nielsen said that it is using UPC-coded (barcodes scanned at retail points of sale) and random-weight/Non-UPC data. In an email to Organic Insider, the Organic Trade Association said that “it includes mainstream grocery, natural channel and alternative channel sales (e-commerce, farmers markets, CSAs), and attempts to account for items within traditional retail that have never been accurately understood by syndicated data (items without a UPC).”
One very interesting and important data point that Nielsen gives is unit growth. With competition pushing prices down in organic, particularly for items such as milk, this 8% unit growth for the overall market is very helpful.
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Have a great day! 
Max Goldberg, Founder |
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