quarterly trends in...3 october-december 2014 • spins natural channel • market: total us •...

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October – December 2014

Quarterly Trends in Natural & Organic

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October-December 2014 Michael Costa SPINS LLC │ Onsite Business Consultant

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October-December 2014

• SPINS Natural Channel • Market: Total US • Period: Current 12 Weeks (4 Wks Ending 11/02/2014) vs. the same time

period 1 year ago – Q4 2014 vs Q4 2013 (QtQ) – Dollar sales used for analysis and rankings – The Alcohol Department was not included in the analysis per UNFI request

• New Items are defined as having zero dollar sales in the same quarter 1 year ago

SPINS Analysis Assumptions

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SPINS Natural Channel - Department Growth Trends QTQ

• The top 5 departments drive 88% of the $131M in Dollar Change Quarter to Quarter (QTQ) • Grocery departments (Grocery, Refrigerated, Frozen & Produce) drive 71.2% of Q4 2014, +1.2 points vs Q42013

• Grocery Depts. grew 10.8% vs Q4 2013 • Grocery drove 35% of the dollar change QTQ

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Top 15 Category Growth Trends Q4 2014 vs. Q4 2013

• The top 15 categories drove 49.4% or $65M of the total $131M Natural Channel dollar change QTQ • Grocery categories drove 83% or $54M of the top 15 categories dollar growth • V&S categories drove 15% and Other 2% of the remaining growth dollars

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Top New Item Brands by Department

Refrigerated Brands - Odwalla, Stonyfield Farm, So Delicious Dairy Free, Wallaby, Garden Highway, The Greek Gods, Hissho Sushi, Chobani, Noosa

Grocery - Back To Nature, Perfect Foods Bar, Angies Artisan Treats, Popchips, Vega, Alter Eco, Kind, Pamelas, Horizon

Produce Brands - Earthbound Farm, Cuties, Garden Highway, Taylor Farms, Grapery, Org Grown Company, Org Girl, Awe Sum Orgs, Paramount Citrus

Frozen Brands - Teton Waters Ranch, Applegate Farms, Dakota Beef, Daniele Naturale, Northern Chef, Diestel Turkey Ranch, Wymans Of Maine, Talenti, Daniele

V & S _ Garden Of Life, Renew Life, New Chapter, Organic Valley, Amazing Grass, Calnaturale Svelte, Uas Labs, Natural Factors, Now

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SPINS Natural Channel New Item Top Attributes

• The above depicts SPINS and Third Party Item Attribute values for “coded” items only and their respective dollars contributed across categories and subcategories

• Non-coded items are excluded

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SPINS Natural Channel Department Growth Trends

Grocery, Refrigerated, Frozen, Body Care, and Produce Departments are strongest in driving dollar growth vs year ago Q3

• The top 5 departments drove 88% of the $131M in Dollar Change Quarter to Quarter (QTQ)

• Grocery departments (Grocery, Refrigerated, Frozen & Produce) drove 71.2% of Q4 2014 a +1.2 points vs Q42013

• Grocery Departments grew 10.8% vs Q4 2013 • Grocery on its own drove 35% of the dollar change QTQ

Department Q4-2014 Q4 2014 Q4 2013 % $ Growth Dollar Change Vs Year AgoGrocery $586,019,904 $539,680,921 8.6% $46,338,983

Refrigerated $266,015,641 $233,459,904 13.9% $32,555,737Frozen $137,766,039 $123,719,079 11.4% $14,046,960

Body Care $90,884,777 $78,913,775 15.2% $11,971,002Produce - Packaged $66,442,877 $56,456,910 17.7% $9,985,967

Vitamins & Supplements $206,562,656 $198,686,591 4.0% $7,876,065Herbs & Homeopathic $61,468,109 $56,980,939 7.9% $4,487,170General Merchandise $41,127,887 $38,547,173 6.7% $2,580,714

Other $26,381,356 $24,909,897 5.9% $1,471,459Over-The-Counter (Otc) Medicines $1,070,299 $1,128,118 -5.1% -$57,819

Total $1,483,739,545 $1,352,483,307 9.7% $131,256,238

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SPINS Top 15 Category Growth Trends Quarter to Quarter

• The top 15 categories drove 49.4% or $65M of the total $131M Natural Channel dollar change QTQ • Grocery categories drove 83% or $54M of the top 15 categories dollar growth • V&S categories drove 15% and Other 2% of the remaining growth dollars

Category Rank by Current Dollars

Category Rank by

Dollar Change QTQ Category Department Current Dollars Year Ago Dollars % $ Growth

Dollar Change Vs Year Ago

1 1 PACKAGED FRESH PRODUCE PRODUCE - PACKAGED $66,442,877 $56,456,910 17.7% $9,985,9674 2 FROZEN & REFR MEATS POULTRY & SEAFOODFROZEN $51,564,880 $43,013,615 19.9% $8,551,2658 3 REFRIGERATED JUICES & FUNCTIONAL BEVER REFRIGERATED $43,595,361 $37,028,642 17.7% $6,566,7195 4 YOGURT & KEFIR REFRIGERATED $47,603,344 $42,341,670 12.4% $5,261,6749 5 MILK REFRIGERATED $40,073,034 $34,853,698 15.0% $5,219,336

11 6 CANDY & INDIVIDUAL SNACKS GROCERY $33,985,310 $29,657,138 14.6% $4,328,1723 7 VITAMINS & MINERALS VITAMINS & SUPPLEMEN $66,047,708 $61,878,731 6.7% $4,168,977

10 8 CHEESE & CHEESE ALTERNATIVES REFRIGERATED $36,338,622 $32,278,117 12.6% $4,060,5052 9 BREAD & BAKED GOODS GROCERY $66,555,079 $63,019,282 5.6% $3,535,797

12 10 DIGESTIVE AIDS & ENZYMES VITAMINS & SUPPLEMEN $32,346,018 $28,920,571 11.8% $3,425,4477 11 CHIPS PRETZELS & SNACKS GROCERY $44,771,357 $41,458,015 8.0% $3,313,342

14 12 OILS & VINEGARS GROCERY $28,707,475 $25,834,561 11.1% $2,872,91413 13 OTHER (MISCELLANEOUS BASE-CODED ITEMSOTHER $26,381,356 $24,909,897 5.9% $1,471,45915 14 MEAL REPLACEMENTS & SUPPLEMENT POWD VITAMINS & SUPPLEMEN $26,964,436 $25,656,342 5.1% $1,308,0946 15 FOOD SUPPLEMENTS VITAMINS & SUPPLEMEN $43,963,073 $43,105,995 2.0% $857,078

Total $655,339,930 $590,413,184 11.0% $64,926,746

13 Rick Perlmuter, National Commodities Manager

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Bulk • Bulk growth in the period was over 10% in sales dollars • Organic products continue to lead bulk growth

– Highlight organic with different color signing to promote additional sales

• Healthy Snacks have become a very strong subcategory – Driving force in significant increases in Nuts and Dry Fruit

category – Group these items together in your sets to drive the impulse

sales and make a strong variety statement • Review and freshen up your bulk mix with these insights

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What’s Hot • Organic Colored Quinoas demand has increased as White Quinoa pricing

advances – Great in hot or cold recipes; versatile item for all facets of daily menu – Red, Tri Color and Black are showing strong upward trend – Slight decrease in White sales for the first time in many years

• Conventional Nuts are showing big gains as Organic Nut pricing has skyrocketed – Conventional Almond and Walnut sales in particular are strong as customers

continue to want healthy nuts but are balking at the high retails of organic • Beans continue to trend up as educated consumers are showing their

preference for clean, simple food – New crop supply is just entering market and we are again seeing full variety

after end of crop gapping

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What’s Not….But Getting Better • The Confections category is starting to show a strong trend of

month on month upward lift – Surprisingly strong sales in a non-traditional timeframe – Suppliers continue to work towards cleaner and more natural options – Emphasis on “healthy” starting to drive this category again – Popularity of Fair Trade and organic chocolates continues resulting in a

surge of new sku’s (bars, candies, coated products)

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What’s New?

Description Pack Size East Item # West Item # UPC European Soldier Bean OG 25 163443 29505 0002693863443 Flageolet Green Bean OG 25 163444 29506 0002693863444 Lima Christmas Bean OG 25 163442 29504 0002693863442

Black Orca Bean OG 25 163441 29503 0002693863441 Jacob's Cattle Bean OG 25 163445 29508 0002693863445

Cranberry Bean OG 25 163440 29502 0002693863440

European Soldier Beans Flageolet Green Beans Christmas Lima Beans Black Orca Bean Jacobs Cattle Bean Cranberry Bean

UNFI Bulk Organic USA Heirloom Beans

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What’s New?

Description Pack Size East Item # West Item # UPC Almonds Sprouted Americona Salted 15 162927 47707 0002693862927 Almonds Sprouted Americona N/S 15 162928 47706 0002693862928

Sprouted almonds are soaked in water for several hours, which activates live enzymes that enhance nutritional value and flavor. They are a great source of vitamins E, C, B and A, protein, amino acids, calcium, magnesium, iron and phosphorus. Grown in California / available in salted & unsalted.

UNFI Bulk USA Sprouted Almonds

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• Actual sales to the Natural Independent Channel through UNFI distribution nationwide.

• October-December 2014 compared to October-December 2013.

• No estimates, no extrapolation; all numbers are based on actual sales from UNFI’s fifteen distribution centers.

Analysis Methodology

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Nut & Seed Butters Peanut allergies led to the need for alternative spreads, but everyone is enjoying them, not just those with sensitivities.

Once Again Organic Cashew Butter and Organic Sunflower Seed Butter both saw over 65% growth in the SPINS scan natural channel. These nut and seed butters are certified organic, sugar free and unsalted. Clean, simple and delicious.

Justin’s Chocolate Hazelnut Butter in the 1.15oz squeeze pack flew through the channel. This thick, fudgy spread has 7g of sugar vs the 21g of competing chocolate hazelnut spreads. Single serve pack is a portable treat.

Artisana Raw 100% Organic Pecan Butter is perfectly balanced with organic, raw cashews creating a unique and nutty spread. It’s a good source of protein and is rich in antioxidants. Keep an eye out for their new packaging.

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Alkalized Water Proper hydration is essential to good health. Alkalized waters with pH’s varying from 8.0-9.5 promise the best hydration possible.

Neo 9.5 pH Superwater contains 3 key electrolytes to hydrate and replenish cells for quicker recovery. Using both reverse osmosis and ionization, Neo is ultra purified, removing 100% of fluoride and lead.

Essentia Alkaline Water with Added Electrolytes uses a proprietary process to add the perfect blend of electrolytes to purified water. It’s ionized, creating a distinctive alkaline 9.5pH water.

Real Water has an alkalized pH of 8.0 and is infused with negative ions to help the body restore balance. Unique to Real Water is its ability to maintain the negative ions for 6-9 months once bottled.

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Frozen Breads & Baked Goods Whole Grain, Gluten Free and Paleo-friendly, it’s a delicious option for every consumer, fresh and ready when needed.

Canyon Bakehouse Organic Gluten Free San Juan 7 Grain bread saw almost a 40% increase. All of their breads are dairy, nut and soy free, and are made without GMO’s.

Dave’s Killer Bread Organic Good Seed Bread contains a seed mix of sunflower, flax and sesame seeds resulting in 670mg of omega-3’s. Packed with protein, fiber and whole grains.

Julian’s Paleo Wraps showed triple digit sales increases in SPINS scan natural channel. A great option for those eating Paleo, GF or just cutting back on some unwanted carbs.

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Veggie Burgers As vegetarian and vegan diets continue to become increasingly popular, these meatless burgers are meeting the demand.

Hillary’s Eat Well Original Veggie Burger and Hemp & Greens Burger both posted phenomenal numbers. These burgers are free of all common food allergens, artificial ingredients, and are Non-GMO Project Verified.

Sunshine Burger Organic Shiitake Mushroom burger is a plant based source of fiber, protein, omega 3’s and vitamins A, E and magnesium. This vegan burger line was the first to become Non-GMO Project Verified!

Qrunch Original Veggie Burger is a combination of quinoa, millet, veggies and coconut oil resulting in a mild, nutty taste. It is certified GF, organic, Non-GMO Project Verified, and free of the most common allergens.

Gardein Ultimate Beefless Sliders provide a quick meal or snack on the go. Ready in just minutes, this vegan burger posted over 35% growth.

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Bone Broth

Pacific Natural Foods offers Organic Chicken and Turkey Bone Broths. The bones are slow simmered with onion, vinegar and rosemary for a savory broth and as the bones cook they start to disintegrate and release nutrients and proteins in higher quantities than in regular broths. *Nutrition experts say that the benefits may include shinier hair, improved digestion and reduced joint pain and inflammation. Bone broth can be used as-is, or in favorite recipes in place of traditional broth or water.

Bone broth has caught the eye of the trend setting food scene and is capturing headlines in The Washington Post and Huffington Post - don’t miss out on this!

http://www.washingtonpost.com/lifestyle/wellness/bone-broth-winters-new-miracle-drink/2014/12/01/640169c2-69bf-11e4-a31c-77759fc1eacc_story.html http://www.huffingtonpost.com/2014/12/08/bone-broth-trend_n_6288812.html

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Seasonal Flavors

Talenti Pumpkin Pie Gelato

Alive & Radiant Pumpkin Spice Kandy Kale

The popularity of pumpkin can’t be overlooked in the fall. Stock shelves with seasonal flavors and watch products fly off the shelves. Watch for cherry in the spring.

Celestial Seasonings Sweet Harvest Pumpkin Tea

Greek Gods Black Cherry Yogurt

Nothing But… Cherry Cranberry Almond Cookies

Seven Sundays Vanilla Cherry Pecan Toasted Muesli

ProBar bite Chocolate Cherry Cashew

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Seasonal Scents

South of France French milled soaps are made with coconut and sustainable palm oil to create a creamy lather, while natural glycerin and organic Shea butter leave your skin soft. Frosted Evergreen, Simmering Orange Clove & Vanilla Cream Caramel are the scents of the season.

Men have often been overlooked in the body care category but not this year. Every Man Jack Body Kit in Cedarwood and Citrus Body Scrub lets the guys get into the season as well.

Some new seasonal scents performed well this quarter, leaving consumers looking and smelling their best.

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Popcorn Snack sales in 2014 were dominated by popcorn. Suppliers responded and flooded the market with a flavor for everyone.

Earth Balance Vegan White Cheddar Popcorn and Vegan Buttery Popcorn

479◦ Popcorn varieties

Skinnypop Popcorn Quinn Popcorn Farm to Bag Popcorn

Popcorn Indiana Popcorn & Kettlecorn Angie’s Popcorn

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Sriracha

The Real Deal Sriracha flavored Veggie Chips

Hope Hummus Organic Sriracha Hummus

evol Sriracha Chicken Big Burrito

Sriracha became a household name. It was enjoyed on its own, and as an added spice to all kinds of products.

Sir Kensington’s Sriracha Mayonnaise

Kettle Sriracha flavored Popcorn & Potato Chips

Organicville Sriracha Sauce

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Coconut Coconut in every form was a winner in 2014.

Navitas Naturals and Cocohydro with their Powdered Coconut Water

Harmless Harvest 100% Raw Coconut Water

Harvest Bay Original Coconut Water

Wonderfully Raw Coco-Roons Hail Merry Macaroons

Creamy Coconut Peanut Spread by Earth Balance

Taste Nirvana Thai Chili Coconut water

Jackson’s Honest Chips are fried in coconut oil

Wholesome Sweeteners Organic Coconut Palm Sugar

Navitas Naturals Coconut Palm Sugar

Desert Essence Coconut Body Wash and Hand & Body Lotion

Julie’s Coconut Ice Cream

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Protein

The New Primal Jerky

The Paleo diet kick started the protein campaign, but as word spread about the possible benefits of protein rich diets, these products flew through the registers. Protein rich jerky, drinks and bars were abundant.

Duke’s Smoked meats Goodonya Bar

Orgain Smooth Chocolate & Sweet Vanilla Bean protein shakes

Organic Valley Organic Fuel, a available in chocolate & vanilla

Tanka Buffalo Jerky Cranberry Bar and Buffalo Cranberry Hot Bar

Krave Jerky

thinkThin Lean Protein & Fiber Bars

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Nuts, Seeds & Dried Fruit

The Chia Co Seeds & Pod’s

Healthy snacking options in a wide variety of products.

Mama Chia’s Chia Squeeze

Kind Clusters Raspberry Clusters with Chia Seeds

Sahale Crunchers

Woodstock Organic Raw Almonds and Organic Raw Cashews

Govida freeze-dried exotic fruits

Nature’s All Foods Organic Freeze-dried fruits

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Fermented Foods & Probiotics Improved gut health and digestion became the focus of many consumers in 2014, making fermented foods and probiotics, which boost the good bacteria in your digestive system, shine.

http://www.wellandgoodnyc.com/2013/08/09/7-fermented-foods-you-should-be-eating/

Farmhouse Culture Fermented Products

Wild Brine Fermented Products

Dahlicious Lassi

Siggis Filmjolk Yogurt Drinks

Sunja’s Kimchi Redwood Hills Goat Milk Kefir

Green Valley Lactose Free Kefir

Lifeway’s Organic Whole Milk Kefir

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Avocado Oil

Spectrum Refined Avocado Oil is a great source of monounsaturated fats and is delicious as an ingredient. It can also be used as a hydrating oil for skincare and massage.

It takes 15-20 avocados to make a single bottle of La Tourangelle Avocado Oil. It is 100% pure with a beautiful emerald color, and can be used for both savory and sweet recipes.

High in oleic acid, a monounsaturated fat that may help lower cholesterol, look for increased appearance of avocado oil and other healthier oils on their own or as an ingredient.

Boulder Canyon Canyon Cut Kettle Cooked Chips – Avocado oil are made with just 3 ingredients: avocado oil, potatoes, and sea salt, allowing the buttery flavor of the avocado to take center stage.

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Grapefruit

The Honest Co White Grapefruit Dish Soap is an ultra-concentrated plant based soap. Iteasily penetrates grease and grime while smelling delightful.

La Croix Grapefruit Sparkling Water (Pample-Mousse is the French translation of grapefruit) – carbonated beverage free of calories & artificial sweeteners.

Grapefruit can be found in almost all departments – make sure to have adequate representation. Watch for other members of the citrus family as well.

The delectable aroma of Aura Cacia’s Grapefruit Oil has a pronounced impact on the senses and emotions. In aromatherapy applications, it is refreshing, cheering, slightly euphoria-inducing and slightly energizing.

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Projections for the future

Simple, clean ingredients and functional foods or foods with more than one purpose will dominate the market.

Look for items, such as rice cakes, that were once popular to gain traction again.

Common Allergen Free – No longer just gluten free. Look for this labeling to become more common and sought after.

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quarterly trends in...3 october-december 2014 • spins natural channel • market: total us •...

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