Report: Health and wellness is a $285B market

The health and wellness industry is on the rise, and brands and retailers that can crack the affordability code can position themselves to win that segment of the growing market, according to a report released Wednesday by data analytics firm dunnhumby. 

The report, Better for You (Customer), You (Brand), and You (Retailer), shows that health-conscious shoppers represent $285 billion in grocery spend annually, making up roughly a third of the $1.7 trillion grocery industry.

Natural and organic-focused grocery chains like Natural Grocers, Amazon Fresh, and the Fresh Market are identified in the report as the leading retailers for health-conscious consumers. These chains and others that cater to this customer demographic are enjoying average annual growth of 7%, according to dunnhumby. 

Nearly two-thirds (64%) of these health-conscious consumers say their physical health is the most important need, following financial health at 58% and mental health at 55%. “More than half of customers expect a high level of support from retailers and brands with products, services, and information for these three top needs,” the report noted. 

These shoppers tend to be between the ages of 18 and 44, and have higher incomes of more than $100,000 a year. Their monthly grocery budgets also have higher grocery budgets and are more inclined to place orders online and join loyalty programs, the dunnhumby report noted. 

Relative to their non-health-conscious counterparts they are more focused on quality (63% to 47%), digital purchase options (45% to 30%), and company values (55% to 31%). They are less concerned about price, though, with 64% citing it as a concern compared to 71% of non-health-focused consumers.

Grocers and brands focused on mental health could position themselves to capture Gen Z shoppers—61% of those in the demographic said mental health is their top concern. That’s 15 percentage points higher than shoppers between the ages of 45 and 54, and it’s double that of those over 75.

“With health and wellness predicted to be the most critical trend for decades, retailers and brands have unprecedented opportunities to meet emerging customer needs,” said Matt O’Grady, president of the Americas for dunnhumby, in a press release. “This groundbreaking report provides a blueprint for meeting customers’ health needs now and into the future. 

“As the grocery landscape continues to evolve, understanding and adapting to these health-centric consumer trends will be crucial for retailers and brands aiming to remain competitive in an increasingly wellness-oriented market.”