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02.25.2009

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Natural: R.I.P.

Not too long ago, we pronounced the passing away of “natural.” Not surprisingly, some of those involved in the "natural products" industry took umbrage to our coroner’s report, declaring that, for example, there was still a vibrant, thriving health food channel.

Many still live in denial, wanting to believe that there remains a robust and distinct natural retail channel: In one sense, we might be tempted to agree with you. True, in certain markets there remain a small number of dedicated “natural” retailers which resemble the traditional model of a natural products retailer from the 1970s or 1980s, as well as a small — and dwindling — cadre of devoted customers who are acutely focused in this product arena. Near our offices in Bellevue, Washington, for example, there is tiny retailer, which is packed to the brim with many of the SKUs some in industry hold up as evidence of a “distinct retail channel,” typically referred to as “natural”. The problem, however, remains that these retailers are patronized by a dwindling and barely relevant number of consumers in today’s marketplace.

We find to the contrary that consumers are turning increasingly to a wider array of retailers on an increasing variety of occasions to fulfill their family’s food needs. Importantly, we are finding that occasions actually trump “consumer types” or orientations such that there is no hypothetical “natural” consumer. Nor, for that matter is there an identifiable “natural” channel, at least from the consumer’s perspective.

Just as elements of the market research industry still try to construct the appearance of a natural channel, and measure it as such by tracking SKU’s, from our experience that doesn’t mean it resonates with consumers in the same way. We should add that perhaps our single foundational belief at The Hartman Group has always been to never let the perspective of the industry influence our telling of the consumer’s story.

Likewise, everything we’ve learned from consumers over the past 10 years indicates that they have all but abandoned interest in the phrase “natural” due to its dilution and overuse in marketing arenas. Instead, when we dialogue with consumers in their homes, on the streets and in retail settings, we hear them using language like “real food,” “authentic,” “un-processed,” and “high quality.”

We find, for example, ordinary families who choose to patronize Kroger for their everyday staple food and household product needs, drop by a Whole Foods to purchase organic dairy and produce items for their children’s lunches, and then visit Central Market HEB when they want a special bottle of wine for a book club event. The primary connection to the “natural/organic” orientation here is their “child’s lunch”, in which case they attempt to alleviate “parental anxiety” with a quick visit to Whole Foods. In short, we see occasion-based behavior centered on a mix of desired product experiences more than any sort of loyalty or engagement with a “natural” channel. These parents don’t identify as natural consumers, they merely utilize some elements of the existing retail experiences which make an ideal match for their shopping occasions and goals (e.g., trying to be a good parent).

Most problematical for those “tracking natural products” by their own standards, many of today’s most well-known consumer products now qualify as natural products. Lay’s potato chips, for instance, utilize no trans-fats and the ingredient list only includes potatoes, oil and salt. And the same could be said for Budweiser beer. So, when a hypothetical Archie Bunker heads to Albertsons for Lay’s potato chips and some Budweiser, he should be tracked as part of a “unique natural consumer,” no? Likewise, everything we’ve learned from consumers over the past 10 years indicates that they have all but abandoned interest in the phrase “natural” due to its dilution and overuse in marketing arenas. Instead, when we dialogue with consumers in their homes, on the streets and in retail settings, we hear them speak using language like “real food,” “authentic,” “un-processed,” and “high quality.”

Taste Rules

Perhaps, particularly puzzling is the assertion we heard that “natural consumers” identified within the industry are only tangentially interested in product taste. Indeed, one of our most important findings over the past ten years is that consumers are, in fact, much less interested in issues such as environmentalism, social justice and sustainability than many of us might have previously assumed and, instead, simply in search of great-tasting, high-quality food experiences . At the end of the day, we think one need look no further than the evolution of natural retailers which are increasingly converging with the likes of Wegmans, Central Market HEB and others in their desire to offer the consumer a “full-on, maximum sensory food carnival.”

When you hit the street and walk through these places, you’ll notice that they are being overrun by a plethora of specialty, designer, artisan and high quality food experiences, of which designations such as “natural” or “organic” tend to take a back seat. Put another way, when we sit in our local Whole Foods Market and observe, we find hordes of teens from the nearby high-school who use Whole Foods as a food court during the lunch hour — and the longest lines, incidentally, are always at the Gelato bar. Are these “natural product consumers,” exercising well-articulated beliefs in very specific channels or are they simply kids in search of some darn tasty food? Whatever the industry might wish or believe, social reality sides with the latter.”

So Long Natural, You Served Us Well

Some might suggest we are making petty distinctions here, but we firmly believe the implications are quite profound. When designing marketing strategies or leading innovation teams, the relevant question to ask is not, “How does this resonate with the natural product consumer?” or “Will this be well received in the natural product channel?” Rather, today’s key question is how to differentiate yourself from the many natural products by creating the proper context for your brand. Ask: “What am I doing to deliver the most engaging, highest quality, great tasting, food experience possible during an occasion that my product can participate in?”

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