BROOMFIELD, Co. -- Whole health is at a crossroads. That was a message delivered here earlier this month, November 4-6, at the Whole Health Marketing & Retail Strategies Conference produced by the Food Marketing Institute, Washington, D.C., Healthnotes, Portland, Ore., and New Hope Natural Media, Boulder, Co. The turnout for this first-time conference was considered good with between 180 and 200 participants. A tabletop exhibit of 27 suppliers drew attendees into a crowded hall the opening day.
The three-day meeting was kicked off the day before with store tours of Alfalfas and Whole Foods. The tour also included visits to Celestial Seasonings, OmegaTech and Univera Pharmaceuticals where about 30 participants got a chance to preview where science is headed in developing new whole-health products.
Speakers during the opening session confirmed the whole-health movement in terms of its growing demographics and demand. However, they indicated that today the market appears to be up for grabs and the stakes are high.
"Across the U.S. there isn't one brand that comes to mind when thinking about healthy living, aging or whole health. The opportunity is there to build a brand within the store," said Skye Lininger, president and chief operating officer, Healthnotes.
Finding the right formula to market whole health is a complex process and, therefore, it becomes a barrier to entry, said Stan Amy, the founder and former past president of Nature's Northwest, Portland, Ore. Amy is currently involved in New Seasons Market, launched earlier this year in Portland by former Nature's Northwest managers. New Seasons is a new concept in natural food supermarkets, said Amy.
Those retailers who do commit to the whole-health challenge can reap big rewards. "It's worthwhile because it's an opportunity to be the dominant format in serving the whole-health market that is huge and profitable," Amy said.
According to Amy, the supermarket with the right format can achieve 35% to 50% gross profit margins in the vitamins, minerals and supplements department, operating on 8% to 12% labor costs. Sales distribution can represent 10% to 15% of store sales, compared to achieving 2% of store sales from the traditional supermarket health and beauty care department. The Nature's Northwest store in Lake Oswego, Ore., was able to achieve 40% gross margins under General Nutrition Cos. ownership, Amy said.
Philip Lempert, columnist and food correspondent for NBC News' Today Show, Los Angeles, noted that whole health is at a crossroads today. He urged attendees to get to know their shoppers. Those who can deliver what the consumer wants in terms of healthy food, information and service will win, he said. "Either it will go to the Wal-Marts and Targets of the world or it will go to the Internet. Look at the sales of nutritional supplements sold on the Internet -- it's phenomenal. Why? Because it's easy and consumers get information. Health is critical; you have to embrace it or lose it," said Lempert.
Panelists said that supermarkets can expect a big explosion in demand for whole-health solutions from the masses. Food retailers are well positioned to take advantage of this explosion that promises to be a $40 billion to $50 billion business.
According to the latest figures from FMI and Prevention magazine's Shopping for Health 2000 report, released here, supermarkets are doing the best job so far in "providing all the products needed to maintain health." According to the survey of 1,000 grocery shoppers, more than four in 10 (42%) said they feel grocery stores do the best job in this regard, compared to 25% for discount stores and 14% for drug stores. The single-digit scores by natural food stores, 6%, and health/nutrition stores like GNC, 7%, may reflect that whole health is still a niche market for the general population of shoppers.
Amy put the "early adopters" for whole-health categories presently at 5% of the U.S. population. However, he sees this growing to 40% of the population as the "early and late majority" comes on board, pushed by the baby boom generation's desire to maintain their vitality and health.
Martha Schumacher, marketing research manager, Rodale Inc., publishers of Prevention magazine, Emmaus, Pa., noted that the roots for whole health are very solid and fed by the baby-boom population. Today there are nearly 35 million Americans age 65 and older. That will grow to 53 million in 20 years, she said. Most boomers won't turn 65 till 2029.
In asking questions about people's attitudes about health and nutrition, "it's very clear that shoppers really believe in the power of food with respect to their health," said Schumacher. Ninety-five percent of shoppers said they believe their grocery purchases are affected by health concerns. With the aging population, "consumers are realizing that maybe diet will make a difference in how they will live out the rest of their lives," said Schumacher.
The study indicates that shoppers want this all under one roof. The ideal grocery store offers health information as well as a depth of healthy products in one-stop.