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In the second of a two-part article, the folks from The Hartman Group offer a look at the consumer and wellness trends that will have an impact on retailers and manufacturers in the coming year.

Organic Going Mainstream...Still.

The Transformation of Organic from Specialty to Ordinary. Many people are talking about the mainstreaming of organics, but there's more afoot. We're convinced that "organic" will become so commonplace that consumers will no longer pay much attention to it as an important product attribute. Just as we have seen "no preservatives" and "nothing artificial" go from a handful of products to practically everything, we'll see organic ingredients added to nearly every processed food. The only thing that will prevent organic from becoming the price of admission is, well, the price of admission. Organics will be cheaper, but they will never be as cheap as non-organics for obvious reasons. Because availability and cost will always be an issue, not every manufacturer will be able to incorporate them and not all consumers will be able to afford them. The demystification of organics in processed foods, however, will not necessarily extend to unprocessed foods, such as produce and meats. These will continue to command price premiums and to differentiate themselves from their alternatives in terms of higher quality/health perceptions, despite numerous studies and official pronouncements to the effect that organic does not imply higher quality/health products.

As organic brands are beginning to strengthen in the food world with consumers already looking to various leading brands in the organic milk, yogurt, frozen food, and beverages, for example, conventional retailers will capitalize on this decade-long organic growth trend and roll out private label organic lines to increase both their category offering and share of organic sales. Established store brands that develop organic lines can emerge as new competition for branded lines, bringing new users to the category, particularly if they are able to keep the cost to the consumer down.

Wellness-izing the World.

Wellness-izing of Convenience Stores. Convenience stores are and will continue to offer more healthy alternatives to the fatty lunches and fast breakfast meals consumed by millions of on the go workers. 7-Eleven, for instance, is now beginning to offer fresh lunches in the five-dollar range in an effort to frame itself as a healthy and even quasi-gourmet destination. This move illustrates a trend in the channel toward health and wellness, which will continue as long as Americans are proactive about their health. The wellness-izing of the convenience channel is an especially interesting trend in that it illustrates the fact that even within an industry which has become omnipresent in lunch decisions by selling high fat low nutrition meals, health and wellness are taking hold among managers and at the shelf.

Wellness-izing of the Fast Food Industry. As consumers, researchers and now litigators continue to communicate the woes of obesity, fast food restaurants will be offering more healthy alternatives. McDonalds, for instance, positioned in the middle of the "burger wars," has acquired small chains that offer inexpensive, fast and convenient meals in an apparent effort to test viability in the wellness market. While McDonalds and others are hesitant to move away from the core business -- fast and fattening meals -- the acquisitions and menu changes speak to industry willingness to at least attempt to offer choices that are appealing to the millions of Americans who are becoming increasingly more concerned about their health and wellness. The growing health concerns of Americans, combined with double digit growth in, for instance, the organics segment of the wellness market is indeed enticing -- especially in a rough economy -- and hence we will see more convenience restaurants offering healthier higher margin meals in an environment that promotes health and wellness.


The trends presented on Tuesday and this morning -- "wellness-izing" industries that were once anything but wellness-like, the price elasticity of specialty niche markets as our economy continues to struggle, and the continued growth of all things organic -- demonstrate that consumers today are looking beyond the physical sense of what's "good for you" or healthy. Consumers in 2003, much like last year, are seeking a balanced lifestyle in the products and services they choose to combine the mental, emotional, spiritual and physical wellness.
KC's View:
You can read part one of this article at: