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TAKING THE ADVANTAGE (CONTINUED)

Sharing a Common Interest rveyed said they buy natural/organic food. Those consumers are nearly equally split between males and females.Percent of Males/Females Purchasing Natural/Organic FoodFemale 51%Male 49%Market BasketWhile half of the consumers polled buy natural/organic food, a large majority fill their shopping baskets with just a small percent of these foods.Percent of Total Food Purchases

Sharing a Common Interest

rveyed said they buy natural/organic food. Those consumers are nearly equally split between males and females.

Percent of Males/Females Purchasing Natural/Organic Food

Female 51%

Male 49%

Market Basket

While half of the consumers polled buy natural/organic food, a large majority fill their shopping baskets with just a small percent of these foods.

Percent of Total Food Purchases Made Up of Natural/Organic Food

31% to 40%: 12%

10% or less: 56%

21% to 30%: 133%

11% to 20%: 19%

Make It Convenient And Easy

What can supermarkets do to gain an advantage and better serve natural/organic shoppers?

The Natural Marketing Institute, Harleysville, Pa., through its Health and Wellness Trends Reports has compelling statistics on how supermarkets can increase natural/organic category sales by separating, highlighting and labeling.

According to its most recent report, 42% of consumers said they prefer to find natural/organic food, health-related items and nutritional supplements merchandised separate yet adjacent to the traditional set of products; 33% said they prefer looking for these products in a separate section away from traditional products. Only 26% of consumers said to mix them within the existing conventional set of products.

Consumer preference for a separate section next to traditional products has grown in the last five years at a compound annual growth rate of 23% from 19% in 1999 to 42% in 2003, said Maryellen Molyneaux, president of NMI.

With regards to the general population, the data says, "Give it to me where I shop for conventional items but call it out with enhanced merchandising."

The reason this strategy isn't applied more often in supermarkets is because the segment is distribution-driven, Molyneaux said. "Most of the chains are driven by the need to have distributor-serviced sections. It has been proven by in-market tests that this type of merchandising really works. You are giving consumers what they want in a conveniently located, called-out section. Obviously, it takes work to remerchandise, but more conventional retailers are doing it and reaping the rewards."

Where Do You Purchase Natural/Organic Food?

The natural/health food store is no longer the first-choice retail outlet for consumers who buy natural and organic food. When asked where they purchase these foods, the vast majority said they buy these foods at the supermarket, and most go there often.

Retail Outlet: Percentage who Shop various Retail Channels; Percent who Go to Various Retail channels the Most

Supermarket: 61%; 39%

Natural/Health Food Store: 43%; 21%

Local Growers/Fruit Stand: 35%; 13%

Smaller/Independent Grocery Store: 29%; 12%

Alternative Chain: 20%; 6%

Other: 4%; 1%

What Can the Retailer Do to Help You Shop for Natural/Organic Food?

Many consumers say it's important to have additional information and assistance in buying natural/organic food.

Percent Who Say It's Extremely/Very Important for Retailers to Provide

Country of Origin Information 38%

USDA Organic Seal 38%

Disease Prevention Information 29%

Merchandise in Separate Department 24%

Trained and Knowledgeable Employees 25%

Better-for-You Foods

Many consumers associate natural/organic food as being better for you. However, a number of respondents expressed doubts about health claims. Some also were concerned about the risk of bacteria and parasites.

Percent Who Agree Organic/Natural Food Is Beneficial

Benefits are mostly unporven 30%

Carries higher risk of containing bacteria or parasiets 20%

Tastes better 24%

More nutritous than conventionally produced foods 37%

Safer than conventionally produced foods 35%

Helps prevent or control serious diseases, like cancer 30%

Potential Barrier to Growth

Industry sources report that natural/organic food can cost 20% or more than conventional food. Even those consumers surveyed who buy natural/organic food agree, 46%, that these products are more expensive than they are able or willing to spend.

Percent Who Agree Natural/Organic Food Costs More

No Opinion 10%

Cost More But Worth the Investment 35%

Cost More Than Able or willing to Pay 55%

Source for all charts: Harris Interactive QuickQuery online omnibus service study conducted for SN

About The Poll

Harris Interactive, Rochester, N.Y., fielded a six-question study from Jan. 28 to 30, via its QuickQuery online omnibus service, interviewing a nationwide sample of 2,167 adults in the United States.

In theory, with a probability sample of this size, one can say with 95% certainty that the results have a statistical precision of plus or minus 3 percentage points of what they would be if the entire adult population had been polled with complete accuracy. This is not a probability sample. Data were propensity-weighted to be representative of the total U.S. adult population on the basis of region, age within gender, education, household income and race/ethnicity.