HOW NATURAL & SPECIALTY BRANDS ARE WINNING WITH … · ORGANIC Especially as Millennials become parents, the push for organic across food & beverage has a firm foothold in kid & baby

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HEALTH-&-WELLNESS-CONSCIOUS PARENTS

HOW NATURAL & SPECIALTY

BRANDS ARE WINNING WITH

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For more than 20 years, SPINS has

been empowering brands and

retailers with wellness-focused

insights to drive meaningful change

throughout the industry.

A LITTLE BIT OF HISTORY

ABOUT SPINS

3Copyright © 2019 SPINS LLC. All Rights Reserved.

20192009 2010 2011 2012 2013 2014 2015 2016 2017 2018

CAPTURING MARKET GROWTH

THE NATURAL PRODUCTS INDUSTRY HAS MORE

THAN DOUBLED OVER THE PAST DECADE

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RETAILERS

DISTRIBUTORS

BRANDS BROKERS

INVESTORS

ADVISORY

SPINS provides a

common language for the

Natural Products Industry

fostering data-driven

collaboration, fueling

innovation & growth

5Copyright © 2019 SPINS LLC.


COMPREHENSIVE CHANNEL VIEW

Only SPINS has a complete picture of the retail landscape, inclusive of

innovative proprietary retail outlets

CONVENTIONALSUPERMARKETS

NATURALSUPERMARKETS

PET

SPECIALTY GOURMETSUPERMARKETS

VITAMINSSUPPLEMENTS

GYMSEXPERIENTIAL

OUTLETSE-COMMERCE CLUB

MASS GROCERY

CONVENIENCE

PROGRESSIVE SHOPPERS

SCALE TO MASS MARKET

105 Progressive Retailers Exclusive to SPINS



WHAT’S DRIVING GROWTH?

Defining proprietary brand positioning groups helps

reveal the types of products driving growth.

HEALTH & WELLNESS PRODUCTS CONVENTIONAL

PRODUCTSNATURAL POSITIONED SPECIALTY POSITIONED

+4.1%Dollar Growth

+4.8%Dollar Growth

+1.2%Dollar Growth

SPINSscan Natural and Specialty Gourmet Channels (proprietary), Conventional

Multi Outlet (powered by IRI); 52 Weeks ending October 6, 2019. Grocery, Refrigerated, Frozen departments.



WHAT’S DRIVING GROWTH?

Applying a deep understanding of the product attributes

influencing consumers decisions at shelf

Brand Positioning

LABEL-BASED & BEYOND

Health Conditions

Clean Label

Lifeways & Eating Plans

Sustainability

Wellness Goals

Social Impact

Ingredient Impact

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HEALTH-&-WELLNESS-CONSCIOUS PARENTS

HOW NATURAL & SPECIALTY

BRANDS ARE WINNING WITH


Conventional products hold 77.5% of dollar sales but contribute less than half of growth;

whereas natural and specialty products make up 22.5% of sales but an impressive 51.8% of growth.

NATURAL & SPECIALTY PRODUCTS ARE OUTPACING THE OVERALL FOOD & BEVERAGE MARKETPLACE –

AND DELIVERING OUTSIZE GROWTH

A Conventional ProductsNatural & Specialty

Products

$ Volume $ Growth % Growth $ Volume $ Growth % Growth

Shelf-Stable $199.4B +$3.0B +1.5% $57.5B +$2.5B +4.6%

Refrigerated $55.2B -$334.5M -0.8% $24.1B +$978.1M +4.2%

Frozen $70.5B +$1.1B +1.6% $12.8B +$519.1M +4.2%

TOTAL GROCERY $325.1B +$3.8B +1.2% $94.4B +$4.0B +4.5%

77.5%

48.2%

22.5%

51.8%

SALES GROWTH

Conventional Products Natural & Specialty Products

Natural & Specialty Contributions

to Sales and Growth


Multi Outlet (powered by IRI); 52 Weeks ending October 6, 2019


WINNING WITH HEALTH-&-WELLNESS-CONSCIOUS PARENTS

SPINS’ proprietary attribution delivers a look into products overtly marketed or positioned for

kids and babies and reveals a $2.3 billion market declining by 3.5%.

IN FOOD FOR KIDS & BABIES, NATURAL & SPECIALTY PRODUCTS ARE GROWING WHILE CONVENTIONAL

PRODUCTS DECLINE

A Conventional ProductsNatural & Specialty

Products

KID & BABY $ Volume $ Growth % Growth $ Volume $ Growth % Growth

Shelf-Stable $935.2M -$45.5M -4.6% $152.1M +6.9M +4.7%

Refrigerated $600.8M -$39.1M -6.1% $240.5M +$22.0M +10.1%

Frozen $281.6M -$25.1M -8.2% $59.2M -$1.1M -1.8%

TOTAL KID &

BABY$1.8B -$109.8M -5.7% $451.8M +$27.7M +6.5%



While conventional items are

down 5.7% to $1.8 billion, the

smaller subset of natural and

specialty items in the kid and baby

space show overall growth.

NATURAL & SPECIALTY KID & BABY ITEMS

+6.5%$451.8M

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DATA DIVE: YOGURT& KEFIR

WINNING WITH HEALTH-&-

WELLNESS-CONSCIOUS PARENTS



Amounting to $7.7 billion in sales volume, the yogurt & kefir category is declining by 1.2%.

SPINS’ attribution reveals a real sweet spots in a challenged space.

NATURAL & SPECIALTY AND KID & BABY ITEMS ARE BOTH BRIGHT SPOTS IN THE STRUGGLING YOGURT CATEGORY

SPINSscan Natural and Specialty Gourmet Channels (proprietary), ConventionalMulti Outlet (powered by IRI); 52 Weeks ending October 6, 2019

The total yogurt & kefir category is

down 1.2% to $7.7 billion

• Natural & specialty items are

up 0.9% to $4.1 billion

Kid & baby items are declining by

2.0% to $841.3 million

• Natural & specialty items

for kid & baby are up

10.1% to $240.5 million

Category leaders integrate trends from the

broader food & beverage space

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BIG CHANGES FORLITTLE TUMMIES





SPINS’ Product Intelligence and exclusive access to innovative retailers offer visibility into

trends across their lifecycle, from an emerging niche into mainstream maturity.

TOP MACRO TRENDS

ORGANICEspecially as Millennials

become parents, the push for organic across food &

beverage has a firm foothold in kid & baby

products.

FRESHOver the past few years, key brands have reinvigorated

the baby-food category with high-pressure processing (HPP) and refrigerated

options.

SAVORYAs contemporary consumers drive the broader market’s

movement away from sugar, parents are hungry for

products to help cultivate babies’ and toddlers’ palates

for savory flavors, too.

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FRESH, ORGANIC, & SAVORY






Refrigerated baby foods disrupted the category quickly: as recently as early 2017, these

products amounted to less than half a million dollars.

SPINS data shows refrigerated baby foods now amount to $14.0 million with continued triple-digit growth.








Certified-organic baby foods make up 10.4% of the category –

and 83.6% of the category’s natural & specialty products.

SPINS data shows baby-food products containing organic ingredients (1-100%, including private label) are

up 6.5% to $631.7 million.




Contemporary parents are driving demand for foods that help cultivate young palates,

meet high quality standards, support nutrition for growing bodies, and maintain

convenience aspects for busy families.



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ALLERGY-AWARE & MORE WIDELY AVAILABLE






According to Food Allergy Resource & Education (FARE), approximately 32 million Americans

have food allergies, including 5.6 million children under the age of 18.1

Eight major food allergens account

for 90% of all food allergies.2

SPINS’ proprietary attribution

identifies foods labeled as free of the

top eight (or more).or roughly two students in every classroom




Allergy-friendly foods are a sizable and growing market, especially in mainstream retail.

SPINS’ proprietary attribution shows

food and beverages labeled as

allergy-friendly are growing 21.3% to

$251.7 million, largely driven by

24.2% growth to $192.5 million in the

Conventional Multi Outlet Channel.

ALLERGY-FRIENDLY FOOD & BEVERAGE

+21.3%$251.7M


Multi Outlet (powered by IRI); 52 Weeks ending September 8, 2019

The top three categories for allergy-friendly foods, by dollar volume, are

cookies & snack bars, frozen convenience meals, and baking products.

Chips, pretzels, and snacks are another area to watch, showing top

dollar growth for allergy-friendly foods, now an annual market of $20.8

million growing by 108.1%!




Key brands have built their platform on allergy-friendly foods and continue to hold

considerable dollar volume, but new brands play an important role for innovation, too.

Emerging brand Better Bites has a decadent,

premium line of allergy-friendly brownies, cake

balls, cupcakes, and more. The brand has also

certified its products as gluten-free, kosher,

vegan, and non-GMO.

Rule Breaker’s new line of bites carry front-

of-label claims that clearly mark products as

allergy-friendly and aligned with school food

policies.





WHAT’S A GB & J?

SPINS: Natural Insights

Sacha inchi seeds, watermelon seeds, tiger nuts, and even oats get into the aisle.

Allergy-friendly and contemporary ways of eating are redefining new categories,

including premium nut and seed butters.


Early exposure to allergens is emerging as an area of innovation in kid & baby foods.

ALLERGY-AWARE & WORKING TOWARD PREVENTION


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A MATURING MARKET FORKIDS’ BEVERAGES

2019 TREND PREDICTIONS


Brands like Rethink Water and Wonder +

Well have adopted the familiar juice-box

format with organic fruit-flavored waters,

offering an alternative with no sugar.

Enhanced with fiber and sweetened with

erythritol, Hellowater’s line of kids beverages

come in smaller bottles and include additional

label language featuring vitamins C and D.

SPINS predicts we’ll see new developments in the kids’ beverage segment

focusing on reducing or eliminating sugar and adding new functional ingredients.

A MATURING MARKET FOR KIDS’ BEVERAGES2019 TREND PREDICTIONS


Unexpected sources of flavor and surprising new looks could shake up the segment

and bring natural beverages into more households.


Play Tea and Drazil use a caffeine-

free herbal tea as their base, slightly

sweetened with fruit juice and/or

maple syrup.

Roar Organic has debuted Roar

Kids flavored-water drinks, featuring

Marvel superhero characters.


The kids beverage market is in transition, but natural products are leading the charge.


“New drinks from Juicy Juice and Apple & Eve show how legacy juice brands

are incorporating water in their kids product assortments, while new players

like Rethink, Hapi Water and WONDER+WELL have focused exclusively on

delivering hydration for young people.”

“The overall decline in kids beverages sales is being driven down by weak

performance from conventional and specialty positioned products. The former

has recorded an 8.6% decrease in dollar sales over the last year, falling by

nearly $100 million, while the latter has seen a 19.3% drop.”

“A new generation of low-sugar kids drinks have also added another layer of

complexity to the market. Products like Roar Kids, Honest Kids and

Good2Grow — positioned as lightly sweetened low calorie juice beverages

sweetened with fruit concentrate — occupy a distinct space separate from

kids waters, even if some of the better-for-you appeal crosses over between

them. ”

https://www.bevnet.com/magazine/issue/2019/kids-beverages-the-shape-of-water

https://www.bevnet.com/magazine/issue/2019/kids-beverages-the-shape-of-water

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WHAT CAN FOOD & BEVERAGE COMPANIES LEARN FROM SUPPLEMENTS?



30Copyright © 2019 SPINS LLC. All Rights Reserved.SPINSscan Natural and Specialty Gourmet Channels (proprietary), Conventional


$ Volume % Growth

Melatonin $29.8M +90.0%

Elderberry $26.3M +84.3%

Probiotics $79.6M +2.3%

Using SPINS’ proprietary Health Focus attribute, data reveals cold & flu, digestive health, sleep, immune

health, and bone health to be the top five largest segments.

MELATONIN, ELDERBERRY, AND PROBIOTICS ARE A FEW OF THE FASTEST-GROWING FUNCTIONAL INGREDIENTS IN KID & BABY SUPPLEMENTS.



Bee products are buzzing across children’s health, from immune support to cold & flu.

Honey-based lollipops are an interesting emerging product type, marketed for a variety of benefits.


“TAKE YOUR SUPPLEMENTS, HONEY.”

SPINS: Natural Insights

Lollipops

Lollipops provide a safe and appealing delivery

method for soothing throats and tummies as well

as promoting relaxation for kids

Immune Support

Propolis and honey (especially manuka) are the

bee’s knees in children’s immune-support

products



The smaller subset of items positioned for kid & baby currently show decline: down 15.8% to $5.9

million. But are supplements and functional food & beverage an area to watch?

COGNITIVE-SUPPORT SUPPLEMENTS ARE GROWING BY 19.5% TO $218.1 MILLION

SPINSscan Natural and Specialty Gourmet Channels (proprietary), ConventionalMulti Outlet (powered by IRI); 52 Weeks ending October 6, 2019

In the broader cognitive

supplements market, top growing

functional ingredients include:

• Phosphatidyl Serine

• Vitamin B Complex

• Medium Chain Triglycerides

(MCTs)

• Medicinal Mushrooms (such

as Lion’s Mane and Reishi)

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HOW NATURAL & SPECIALTY BRANDS ARE


THANKS FOR JOINING US!

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Documents

HOW NATURAL & SPECIALTY BRANDS ARE WINNING WITH … · ORGANIC Especially as Millennials become parents, the push for organic across food & beverage has a firm foothold in kid & baby