Author: Mintel Group Ltd.
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Natural and Organic Food and Beverage: The Consumer - US - November 2011
Scope and Themes
 
What you need to know
The $18.9 billion natural and organic food and beverage (NOFB) market, which has shown strong growth through the economic downturn, offers great opportunities for producers and marketers who understand what the consumer wants from NOFB. 

This report, a companion to Mintel’s Natural and Organic Food and Beverages—The Market—U.S., October 2011, offers an up-close look at today’s NOFB consumer. The report primarily features Mintel’s exclusive consumer research together with data from a wide range of outside sources, offering new insights into how consumers think about NOFB and how this shapes consumer and market behavior.

Core themes examined in this report include:

●	current trends in NOFB usage, including the effects of the economic downturn on consumer purchasing habits 
●	which specific consumer groups are most important to the NOFB marketplace, and how factors like age, race, household income, and presence of children in the household shape NOFB consumption patterns
●	which NOFB categories are most important to consumers, which categories are gaining or losing popularity, and how marketers can take advantage of current market trends 
●	where and how today’s consumers shop for NOFB
●	what motivates consumers to buy NOFB and what barriers stand in the way of increased usage
●	how consumer attitudes toward the terms “natural” and “organic” are changing, and how marketers can better maintain consumer trust in NOFB products.

Definition
This report builds on the analysis presented in Mintel’s series of reports published at the end of 2009:

●	Organic Food and Drink Retailing—U.S., November 2009
●	Natural Products Marketplace Review: Beverages—U.S., December 2009
●	Natural Products Marketplace Review: Refrigerated and Frozen Food—U.S., December 2009
●	Natural Products Marketplace Review: Shelf-stable Food—U.S., December 2009

In addition, this 2011 update is meant as a companion to Mintel’s Natural and Organic Food and Beverages—The Market—U.S., October 2011 report.

The terms “all natural” or “natural” do not have industrywide definitions or meanings, nor are they regulated by the U.S. government (in the way that organic certification is). However, in general, “natural” refers to food and beverages that are free of artificial ingredients including sweeteners, flavors, colors, and preservatives.

| For the purposes of this report, organic products are defined as those that are certified as organic under the guidelines set forth in the USDA National Organic Program (NOP). Products may have 1-100% organic ingredients but must conform to the USDA NOP standards in terms of certification and the labeling of finished products sold in retail markets. Specifically, for example, products with a minimum of 70% organic ingredients can have front-of-package (FOP) labels that say “made with organic ingredients,” while products with a minimum of 95% organic ingredients can utilize the USDA Organic seal (left) on FOP labels.

Value figures throughout this report are at retail selling prices (rsp) excluding sales tax unless otherwise stated.

Data sources
Consumer data
For the purposes of this report, Mintel commissioned exclusive consumer research through Toluna USA to explore consumer consumption of/attitudes and behaviors toward NOFB. Mintel was responsible for the survey design, data analysis, and reporting. Fieldwork was conducted Aug. 8-18, 2011, among a sample of 2,000 adults aged 18+ with access to the internet.

Mintel selects survey respondents so that they are proportionally balanced to the entire U.S. adult population based on the key demographics of gender, age, household income, and region. Mintel also slightly oversamples, relative to the population, respondents that are Hispanic or black to ensure an adequate representation of these groups in Mintel’s custom consumer survey results. Please note that Mintel’s exclusive surveys are conducted online and in English only. Hispanics who are not online and/or do not speak English are not included in Mintel’s custom consumer survey results.

Mintel has also analyzed data from Experian Simmons Consumer Research, using the Experian Simmons National Consumer Study (NCS) and the Experian Simmons National Hispanic Consumer Study (NHCS). The NCS/NHCS was carried out during February 2010 and March 2011, and the results are based on the sample of 24,722 adults aged 18+, with results weighted to represent the U.S. adult population. 

While race and Hispanic origin are separate demographic characteristics, Mintel often compares them to each other. Please note that the responses for race (white, black, Asian, Native American, or other race) will overlap those that also are Hispanic, because Hispanics can be of any race.

Advertising creative
All advertising creative provided by Competitrack, the leading U.S. competitive ad tracking provider. For Mintel reports, Competitrack monitors network, cable, spot, syndicated, public, and local television advertising. 

For further information, or to order television, magazine, newspaper, online display, online video, radio, outdoor, viral, or cinema advertising, or alternative media, inserts, and circulars, please contact Competitrack at websales@competitrack.com, or call 718.482.4200.

Abbreviations and terms
Abbreviations
The following abbreviations are used in this report. 

CPG | Consumer packaged goods or consumer packaged goods companies
CPI | Consumer Price Index
FDA | U.S. Food and Drug Administration
FDM | Food, Drug and Mass Merchandisers
FDMx | Food, Drug and Mass Merchandisers, excluding Walmart
FOP | Front-of-package (labeling)
NOFB | Natural and organic food and beverages
NOP | National Organic Program
OTA | Organic Trade Association
RTD | Ready-to-drink
USDA | United States Department of Agriculture

Terms
Generations are discussed within this report, and they are defined as:

World War II | The generation born in 1932 or before. In 2011, members of this generation are aged 79 or older.
Swing Generation | The generation born between 1933 and 1945. In 2011, members of the Swing Generation are between the ages of 66 and 78.
Baby Boomers | The generation born between 1946 and 1964. In 2011, Baby Boomers are between the ages of 47 and 65.
Generation X | The generation born between 1965 and 1976. In 2011, Generation Xers are between the ages of 35 and 46.
Millennials* | The generation born between 1977 and 1994. In 2011, Millennials are between the ages of 17 and 34.
Matrix Generation** | The generation born from 1995 to present. In 2011, Matrices are aged 16 or younger.

* also known as Generation Y or Echo Boomers 

** previously known as Post-Millennials

In order to provide an inflation-adjusted price value for markets Mintel uses the CPI to deflate current prices. The CPI is defined as follows:

CPI

The Consumer Price Index is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.
The CPI and its components are typically used to adjust other economic series for price changes and to translate these series into inflation-free dollars. Examples of series adjusted by the CPI include retail sales, hourly and weekly earnings, and components of the national income and product accounts. In addition, and in Mintel reports, the CPI is used as a deflator of the value of the consumer’s dollar to find its purchasing power. The purchasing power of the consumer’s dollar measures the change in the value to the consumer of goods and services that a dollar will buy at different dates. 
The CPI is generally the best measure for adjusting payments to consumers when the intent is to allow consumers to purchase, at today’s prices, a market basket of goods and services equivalent to one that they could purchase in an earlier period. It’s also the best measure to use to translate retail sales into real or inflation-free dollars.
Based on Bureau of Labor Statistics definition.

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