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1
Becoming “ State of the Art” in our Industry’s
Current State
Bill Crawford, MS
National Wellness Meeting 2009
Let’s Start With The Big Picture View of Things
2
What’s Up in a Down Time?
Allergy Relief
Weight Loss
Internal Cleansing
Did You Read This?
The Economy – Vitamin Sales
3
The Economy – Herb Sales
Supplement Use in the U.S.
Regular Users of Supplements in the U.S.
56%� 44% every day!
Why not?� 40% - no need for them
� 23% - diet already is balanced
� 27% - too expensive
� 15% - difficult to understand what to take
The Supplement Category
Supplements are a highly-relevant H & W (Health and Wellness) product category, often appearing fairly early on in a consumer’s evolutionary path toward higher levels of H & W.
4
The Body Care Category
Hair and skin care products have a fairly direct connection to H & W, in that they resonate with notions of everyday “taking care” of oneself, a positive self-presentation, and at some level notions of pampering or indulgence (“feeding the soul,” an important aspect of H & W for many).
Let’s Zero In More on Our Industry
Trends in Wellness1. Digestive health — as in all that’s good for your gut: probiotics, prebiotics and synbiotic.
2. Energy boosting — with herbs and ingredients such as rhodiola, ginseng, ashwagandha, caffeine and B vitamins in supplements and energy drinks.
3. Functional foods — a shopping list that includes: pomegranate, mangosteen, açai, acerola, guava, lychee and starfruit. Cupuacu, graviola, yumberry, baobob, miracle berry, breadfruit, jackfruit, coffee cherry, Indian gooseberry, gac, hawthorn and sea-buckthorn.
4. Weight management rather than weight loss — as in eating real foods, exercising and maintaining healthy goals.
5. Parents get sneaky with kids nutrition — look for more solve-it-quick solutions in powders, pills and fortified foods.
6. Healthy snacks, more or less — low-fat, low-sugar, low-calories, more fiber, healthy fats (omega-3s) and functional nutrition.
7. Stevia and sugar alternatives. Also look for palm sugar.
8. Cosmeceuticals, also known as beauty nutrients — think antioxidants, botanicals, enzymes, hyaluronic acid, amino acids, probiotics, CoQ10 and green tea.
9. Healthy planet = healthy you. Consumers are seeing that what’s good for the planet is good for our health.
10.Home cooking, or “dining in.”
5
NATURAL FOODS MERCHANDISER’S ANNUAL
MARKET OVERVIEW
The Universe of Stores
Some of the Specs
6
How Did Sales Do?
2008 Growth
What About Profits?
7
Expansion Plans
LET’S FOCUS IN A BIT ON “YOUR” WORLD
Danger, Danger
8
A Case In Point…..
Are consumers at your store searching out supplements in lieu of purchasing pharmaceuticals because of the recession?
0 5 10 15 20 25 30 35
24.5%
28.4%
19.6%
10.8%
16.7%
Yes
, Ver
y F
requ
ently
Yes
, S
omet
imes
Yes
, But
Not
O
ften
No,
Not
S
eein
g a
Sw
itch
Not
Sur
e
The Importance of Staff
A recent survey of Barnes & Noble employees revealed that, while 18 percent say they read daily, 34 percent admit they hate to read.
June 27, 1998Dr. Michael Murray
ABC News’ 20:20
St. John’s Wort
9
Holes and Dogs
Using data to form a “build to”� Supplements and Body Care
are different from groceries
The Most Valuable Space
Vendors� Distributor - $18M to $12M;
60-90 days
Overstocks
Tying up Money
Tying up Space
Opportunity Cost
Out of Stocks….
What Do People Do If the Item They Want Is Out of Stock?
23% - will not substitute another product
15% - will go to another store
8% - delay or not make a purchase at all
10
Retail 101 – Mind Your Shelves
16.6% of grocery store customers leave without purchasing at least one item on their list because it was out of stock
9% stopped going to a particular store because the out of stocks were so bad
Loss per customer - $ .68
Annual loss per store – 2.1% of total store sales
The Economy Hits Home
0 5 10 15 20 25 30 35
2.2%
7.6%
12.0%
16.3%
33.7%
16.3%
8.7%
3.3%
New
sto
re
Dow
n m
ore
than
20
%
Dow
n 10
% to
<
20%
Dow
n 0%
to
<10
%A
bout
ev
enU
p 0%
to
10%
Up
>10
%
to 2
0%U
p m
ore
than
20% Retail Inventory Levels
Merchandise Choices
All Channel Distribution
Natural Channel Distribution
Exclusive Distribution� Private Label
�Don't Blame Private-Label Gains on the Recession�No-Names Brands Have Been Picking up Momentum for Past Decade Across Demographics
11
Private Label Success
Two Key Factors
Price is NOT one of them!
Brand Equity� Key for the Initial Sale
Quality� Has to Be on Par with the Brand Equity and
the Price
Merchandising Choices
By Brand
By Item
Thoughts
By Brand: Partnership-Oriented
Well Staffed
By Item: Good for Newer Customers
Low Priced Items Will Sell More
At least we hope that is true with the answers
12
We Can Visit Later…..
� Via E-Mail or Phone:� [email protected]
� 918-451-2404
� Columns and Blog� www.naturalfoodsmerchandiser.com
� Future Show Seminars� Natural Marketplace
� Expo East