When COVID-19 hit, U.S. consumers not only rushed to stock up on food staples to carry them through the lockdowns, they also filled their grocery carts with health and wellness products.
“The pandemic has highlighted the importance of building a foundation of good health,” says Shelby Miller, manager of scientific affairs and nutrition education at Natural Grocers in Lakewood, Colo. “Consumers want to get back to the basics in order to be rooted in health, and they aim to find products that allow them to do so.”
Research released May 29 from Chicago-based research firms IRI and SPINS shows a boom for natural products in 2020. According to the report, COVID-19 and Navigating the Path Ahead: Supporting the Natural Products Consumer, dollar sales for natural products continue to grow vs. the same period a year ago, increasing by as much as 78% in mid-March.
With natural products outpacing sales of their conventional counterparts, accounting for 8.4% of total store year-to-date sales, opportunities abound for retailers and manufacturers to meet consumer demand during the pandemic and beyond.
Immune System Boosters in Demand
Predictably, heightened health concerns due to COVID-19 have inspired increased demand for products designed to boost the immune system. “In the supplements category, we’ve seen a remarkable increase in immune supportive supplements,” says Miller of Natural Grocers, which operates 159 stores in 20 U.S. states. “These include vitamin C, zinc, elderberry, and many more.”
Photograph courtesy of Natural grocers
Along with growth in the supplements category, Miller notes a spike in demand for items such as hand soap, bar soap, body washes and, of course, hand sanitizer. Even essential oils, a product category with flat sales in Natural Grocers’ markets prior to COVID, experienced a jump in demand.
“With cold and flu season on the horizon, we anticipate that these new trends will continue for quite some time,” says Miller, “especially the increased demand for supplements and nutrients that support healthy immune system function.”
Similar trends are playing out at New Leaf Community Markets, which runs five stores in and around Santa Cruz, Calif. “When the pandemic began, customers heavily stocked up on health and safety essentials, like hand sanitizers and immune support products,” says Jocelyne Gilead, category assistant manager, wellness and home goods. “We noticed products like cough drops, lozenges and immune boosters being purchased more frequently.”
Photograph courtesy of New Leaf Community Markets
Despite limited stock and availability, hand sanitizers, soaps and immune support products continue to be hot sellers as states reopen and customers prepare for the winter season. Face masks are also in high demand.
“We partnered with a small boutique and brought in handmade cloth face masks with a portion of proceeds going right back into local food banks for those in need within our community,” says Gilead. “As face coverings become more prevalent in stores, we predict customers will look to purchase masks that give back to the community or support local artists.”
For Phoenix-based Healing Solutions, which specializes in essential oils, COVID-19 had an immediate impact on sales. “We have been incredibly fortunate in that we’ve seen a significant increase in our business since the end of February,” says Jason Kern, EVP of sales and marketing. “March through May saw sales sustained above Black Friday levels. We expect this trend to continue, especially as we get into our historically busy holiday season.”
Aromatherapy products, particularly those with immune system-boosting and antiseptic properties, saw a surge in demand during the early months of the pandemic. While sales began to temper as states reopened, the company continues to see sales increases of 50% or more, year over year, with significant sales growth across both e-commerce and brick-and-mortar retail channels.
“We believe this was driven largely by consumers looking for do-it-yourself solutions to products they were unable to find on store shelves, like hand sanitizer,” he says. “When we factor in hand sanitizer, which we launched in June, we continue to see 100% year-over-year revenue growth.”
Fortuitously, Healing Solutions already had a hand sanitizer product in the works prior to the pandemic crisis, and quickly decided to expedite its launch. The company now has the capacity to produce more than 10 million bottles per week. While necessity and scarcity are primary sales drivers, Kern notes that quality and trustworthiness are also paramount to the product’s success.
“With all sorts of brands coming out of the woodwork right now,” he says, “we feel it’s important that buyers focus on quality products, especially with the U.S. Food and Drug Administration’s recent warning about toxic ingredients used in many sanitizers. It highlights the fact that not all are created equal, and how important it is to know what’s really in the products retailers are putting on shelf.”
In terms of sales channels, Kern has found that brands and retailers with strong digital footprints have been better positioned during the pandemic than those that are entirely dependent on physical storefronts.
“We have been fortunate in that we allocate significant resources to both e-commerce and brick-and-mortar retail, allowing us to capitalize on the broader consumer shifts we’ve seen over the last five months,” he says. “As a result, we have seen tremendous growth in both segments of our business.
“We see now as the perfect time for brands to invest in their brick-and-mortar retail partners,” Kern continues. “It’s our job to help buyers reexamine what’s driving sales in today’s environment, so they can begin adjusting their shelf space accordingly and ensure space is allocated in line with the shifting consumer demand.”
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