According to recent studies presented at the recent 37th annual Natural Products Expo West, the world’s largest natural, organic and healthy products event, the natural products industry grew by 7.7% over the last year to $195 billion in 2016, and it’s predicted that the industry will grow to $200 billion in 2017. Over the last decade, the industry has doubled in size.
What’s driving this growth? Much of the growth is fueled by the growing consumer concern for health and wellness at all age levels, from baby boomers to millennials, and their demand for high-quality, sustainable products. Recent studies show that:
- From 2007 to 2016, preference for sustainable products grew 21%, with 58% of the general public preferring to purchase products that are manufactured in a sustainable, safe manner.
- Almost one-third of the general public are willing to pay approximately 20% more for products that are sourced and manufactured in an environmentally sound and sustainable way.
- Ultimately, consumers want to ensure safety for themselves and the environment, and will seek better, more accurate product labeling for assurance.
Alignment of Values
Today’s consumers are searching for products in all categories, from food and beverage to pet care, personal care and home products and furnishings, that are more eco-friendly and produced by companies that are proactively more environmentally and socially responsible.
A growing number of consumers are more likely to purchase products from companies that share their same values or support similar causes. In a recent study, 52% of the general public indicated that if given the choice, they would buy products from companies whose values are most like their own, with millennials leading the trend at 59%.
Company characteristics important to consumers include:
- Keeping jobs in the U.S.
- Providing safe working environments and fair wages for workers
- Treating animals humanely
- Reducing waste and using more recycled content for products and packaging
- Helping to prevent global warming, reducing energy use, increasing renewable energy, and accessing clean water
- Supporting social, community and child education efforts.
Consumers are looking for brands that are purpose-driven, socially-minded, and motivated to effect positive change in the world. For example, some brands’ ethical roots are driven by wildlife protection, animal safety, or social causes to help people in need. The closer the cause is to the core values of the company, the stronger the impression is on the consumer, which helps builds greater customer connections and brand loyalty.
In this era of consciousness raising, partnerships are forming between like-minded companies to innovate and create new products that are good for people, the environment, and society. Collaboration takes many forms, including partnering with companies to repurpose waste products for use in other products, contributing to charitable causes, creating jobs, or pursuing more ethical sourcing of ingredients.
Changing Climate—Lean and Green
The food and agriculture industries are moving toward more environmentally responsible supply chains, more plant-based foods and less meat and dairy, while at the same time minimizing waste at all stages of product development, manufacturing and distribution. Amidst this climate-friendly movement, there are strategic ways companies can be proactive and take a leadership role:
- Identify your values, purpose and mission
- Explore all aspects of your business for alignment with your values
- Set a strategic direction; implement and monitor changes consistently
- Be authentic, transparent, and keep progressing forward for the greater good.
Studies show that consumers are more likely to trust companies that demonstrate character by clearly stating and acting upon their corporate values. More than ever before, consumers have higher expectations of companies and follow brands that lead and execute with thoughtful purpose.
How do you future-proof your company for growth in the natural products industry?
To position your company as an industry leader and stay ahead of today’s consumer demand for high-quality, sustainable products, Cornerstone Consulting can help you assess where your business operations are today and define new directions and opportunities to help your business grow in the right direction. Whether you are taking your business to the next level, preparing for strategic collaborations and partnerships, or strengthening your operations for a merger or acquisition, we can provide business management software solutions to help guide you on the continuum for success with confidence. We are a proven, trusted advisor in the natural products industry, dedicated to helping companies progress with integrity. Please contact us for more information.