Last week I was at the Natural Products Expo West in Anaheim, CA. I'll post more later on some more detailed observations, but I did not want to delay any more in getting some intitial thoughts posted.
What recession? The natural/organic industry grew 11% in 2008 and projects to grow at 8% in 2009 (Natural Business Journal presentation). Yes, a growth industry not related to government, healthcare or bankruptcy attorneys. Projected growth is down from previous projections, but we're still talking close to double-digit growth. The positive vibes from the show floor and companies is real and palpable. That said, there are some real trends inside the industry that do reflect the current economy:
- Private label growing fast: Natural/organic (N/O)private label was up 71% in 2008 and will likely see similar growth this year. 36% of N/O consumers say they are spending less.
- Value packs are in: My friend Bob Burke reports that value size packages are increasing. Multi-product packs that used to be reserved for club stores like Costco are now finding their way into chains like Whole Foods Market. To see Bob's great "What's Hot" presentation from Expo, click here.
- Consumers are trading down from organic to natural: 52% of N/O consumers are buying less due to cost.
Expo is Big, and Still Getting Bigger: There were 1900 exhibitor booths (same as previous year) and attendance was up to 53,000 from 50,000. This is a big show. I walked the floor with intermittent meetings on Friday and Saturday for a combined 16 hours and didn't even get to go through every aisle -- I think I saw around 65% of the show. Unfortunately, I think I need three days to do the show justice.
In the next few weeka I plan to blog more on the following topic from Expo and the industry:
- Venture Capital/Deals in the space: What's happening? What should companies be thinking about? What's new with deal terms?
For those with companies in the industry, I am also available now to consult for companies and to assist with raising capital. See Royal River Associates for more detail. The Case Studies section is new.
2 comments:
Good post on Expo West. I came away, asking myself the same thing, "What recession?" Show was huge and traffic was up. Didn't seen any empty booths. Went to the Fair Trade breakout session which was lightly attended b/c TransFair waited 'til the last minute to promote it. But the report there was that year-to-date Fair Trade sales are flat to up, which is pretty solid given the current state of the economy. FT is over a $1B market in the US and $3.5B+ globally. There were almost 60 FT companies at Expo West, a great showing.
Here's a similar article I found later today saying that seems like there isn't a recession when you look at this industry: http://www.functionalingredientsmag.com/fimag/articleDisplay.asp?strArticleId=2102&strSite=FFNSite
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