Research
Interview Synopsis

Organic & natural food trends in US grocery retail

  • Multi Asset
  • Consumer
  • North America

As society becomes increasingly conscious about health and the environment, there is considerable hype — and appetite — for organic and natural food.

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Consumers Hungry for Organic Food and Alternative Proteins

Third Bridge Forum spoke to the former VP at Whole Foods Market Inc to uncover the challenges and opportunities associated with this burgeoning trend in the US – and elsewhere.

There is undoubtedly a growing interest in alternative proteins including plant, hemp, pea and other seed-based proteins. Genetically modified (GM) alternative proteins such as the Impossible Burger, which uses a GM yeast ingredient called leghaemoglobin, are also gaining traction. 

The organic sector in particular is seeing continued growth from brands including Califia, Ripple, Follow Your Heart and LightLife. An interesting trend, the specialist said, is that the plant-based food industry volume has not affected meat sales, which overall continue to be strong, particularly beef and poultry. 

However, the dairy industry is struggling owing to the continued overproduction of milk, as more consumers try plant alternatives to avoid exposure to allergens and GM organisms, or simply to seek seemingly healthier options. This has also spilled into the organic market, where companies are starting to post unprofitable quarters because of a glut of supply versus demand.

Following Beyond Meat’s IPO in May, other players in the space are likely to follow suit. But while the Beyond Burger is trading at 50 times revenue, the specialist warned that unrealistic expectations by the technology sector are creating an inflated “bubble”. It is also an exciting time for M&A, with recent acquisitions involving Snyder’s and Campbell’s. 

As for headwinds, there are concerns over organic standards being compromised, particularly at the expense of small family farms, in order for the sector to grow rapidly. The focus should be on how it can continue to grow and who ultimately benefits, according to the specialist. Questions also remain about allergens and cross-contamination issues.

The specialist also compared the different price offerings of large players such as Trader Joe’s, Sprouts and Whole Foods, and spoke about the challenges for consumer packaged goods operating in the organic industry.

To access all the human insights from Third Bridge’s Organic & Natural Food Trends Interview, click below to view the full transcript.

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