State of Natural Products Expo West
Posted March 22, 2023
Almost 900 new brands showed the food and beverage industry why they deserved a space at the 2023 Natural Products Expo West. Even though I believe the boom of new products that culminated from this year’s show rose somewhat from the pandemic, future success belongs to those who innovate — looking ahead and not in the rear view was a theme bigger than ashwagandha.
The excitement was palpable and positive as I walked into the ever-popular “State of Natural & Organic” keynote. Natural Products Expo West is the “granola conference no more,” as New Hope Network’s Carlotta Mast pointed out. Instead, it’s a resilient, mainstream reflection of an industry projected to reach $338 billion in sales by 2025 for a number of reasons.
Nick McCoy, managing partner at Whipstitch Capital, made a wonderful point: The vast majority of shoppers are buying products in brick and mortars, and consumers are looking for value. Consumers who do so, in fact, are two times more adventurous in their choices. No matter if brands have a physical or digital store, long-term presence depends on hitting the sweet spot between innovation and price.
Shoppers are in tune to ways that companies continue to raise the bar on products that are for not only good for our health, but for the planet. Natural shoppers do so much more research than conventional shoppers, Mast said. They do a lot of research online, so retailers need to think about how they create an omnichannel experience and a unique branding, whether it’s for research done in aisles or online before the purchase is made.
How do we take all-natural ingredients and continue to elevate beyond nutrition? We want to be good for our communities and our planet, and honey as an all-natural sweetener took center stage on the show floor. There were an incredible amount of honey suppliers and sweetened-with-honey products within the almost 3,200 exhibitions.
Natural, organic and functional beverage sales drove the greatest growth for the industry, Mast noted, outperforming the industry as a whole. Sales increased 6.6% to $199 billion, and some of the categories that did well: carbonated drinks, organic soft drinks, gut healthy sodas, kombucha, CBD beverages and sports and energy drinks. This industry defines itself around human health and products that support human health — and drinks are becoming just as dynamic and diverse as food categories.
Organic is booming
Growth in organic bounced back in 2022 with sales increasing to an estimated 4.6%, surpassing the $50 billion mark, thanks in part to better-for-you … mac n’ cheese and soup? We never thought we’d see a standout year for soup. “When was the last time soup was discussed in the State of the Industry?” Kathryn Peters, chief of staff at SPINS, quipped.
Everyone’s favorite comfort food is mac ‘n cheese, traditionally a calorie-laden product, but even companies like Kraft are taking out the artificial and putting in better-for-you items, innovating and expanding their portfolios with chickpeas and higher-protein ingredients.
Mushrooms, probiotics, prebiotics, fiber-rich ingredients and adaptogens like ashwagandha broke out of the supplements category and trended as food ingredients. They’re powerhouse, functional ingredients that drove innovation and growth at Expo West. “We really believe that fiber is going to come more to the forefront,” Peters said. “This is about functional ingredients and more products playing a much longer role.”
Also expect to see plant-forward products touch on high fiber and adaptogenic properties in the future.
A note about Women’s Day. The keynote’s main time block touched on March 8, and it was an inspirational moment when everyone clapped after words about making our industry more inclusive. However, when new panel members took to the stage to discuss how to implement change, there was a mass exodus in the room, which deflated the power of the moment. I did, though, see a vast number of diverse business owners on the show floor — perhaps more than I’ve ever seen before. We have a long way to go, but we’re certainly full steam ahead.
CATEGORY: Brightly Creative