As the new “Green” generation emerges, the business of Alternative Health and Organics is fast becoming a sector to watch. According to recent research by RedOrbit.com “One of the few certain and consistent trends for American grocers has been the growing popularity of organic food; in fact, from 1997 to 2006, sales of organic food have grown by nearly 80 percent to $17.7 billion.”
According to the Organic Trade Association (OTA), a membership-based business association for the organic industry in North America, the Canadian organic market is booming with annual growth above 20%.
It is interesting that this trend emerges in parallel to the World Bank stating that food prices have increased 83 % worldwide over the past three years and food shortages are becoming a global issue. There is a global shift taking place in the food, water and health sectors as we face consequences of environmental damage due to pollution, global warming, agricultural trends and use of pesticides and global drought.
The need for health awareness is a growing concern for North Americans. As consumers learn the health risks of consuming preservatives and “trans fats” through packaged foods; organic seems to be the way to go for a healthy lifestyle. Accompanying the Organic food movement is the trend towards Vitamin and Supplement sector. As more people become interested in their health, the change to adding vitamins and supplements to their daily routine has become increased consumer consumption. Study’s show that most processed food consumed contains empty calories and little nutritional value. As more consumers become aware that their nutritional health needs are not met by the food they eat, supplement sales increase; earning profit from both the health and weight loss industries.
Gourmet Retailer in a recent issue reported, “Despite a tougher year ahead, consumers are willing to pay more for green, environmentally friendly products in 2008. That’s according to a recent MamboTrack study by Mambo Sprouts Marketing, a leader in natural and organic product marketing and promotions, which surveyed the buying habits of 1,000 natural product consumers, and forecasted their expected purchases for 2008.
With deterioration in the housing market, soaring energy costs and tight financing ahead, economists are predicting a decline in consumer spending, yet many consumers still see green as a priority. Most natural food consumers indicated they would pay more for environmentally friendly products, with seven of 10 willing to pay up to 20 percent more. In turn, the study revealed that consumer interest in healthy, organic and sustainable products is on the rise, showing a commitment to organic foods and green products not only for personal health benefits but also for the environment.
When it comes to grocery spending in particular, natural category consumers indicated they were most likely to choose organic options for produce (60%), dairy products (54%) and child/baby food products (50%). Natural and organic consumers plan to increase their use of environmentally friendly grocery bags, with 63 percent expected to increase their use of these green reusable bags and 62 percent expected to decrease their use of disposable plastic bags in 2008.”
Joining the growing trend, SUPERVALU (NYSE: SVU) recently announced the national launch of its Wild HarvestTM organic and natural brand. The company reported, “The new brand, which will encompass a wide assortment of products across numerous food categories, is making its debut this month in the aisles of the company’s family of grocery stores, including Acme, Albertsons, bigg’s, Cub Foods, Farm Fresh, Hornbacher’s, Jewel-Osco, Lucky, Shaw’s/Star Market, Shop ‘n Save and Shoppers Food & Pharmacy.”
Organic and Health Sector Stocks Close up: As of Market close, April 17th. 2008
HAIN CELESTIAL GRP (NasdaqGS: HAIN), a leading natural and organic food and personal care products, closed down $27.25, down $0.45 (1.62%) with a 52wk Range: $24.20 - $35.14
HERBALIFE LTD. (NYSE: HLF), a network marketing company, sells weight management, nutritional supplement, energy and fitness, and personal care products worldwide closed at $ 49.05, up $1.49 (3.13%) with a 52wk Range: $35.30 - $51.09
SUNOPTA, INC (NASDAQ:STKL) primarily operates in the natural and organic food sectors of the food industry in the United States and Canada and closed at $5.07, up$ 0.01 (0.20%) with a 52wk Range of $4.56 - $15.50
SUPERVALU (NYSE: SVU ) closed at $30.65, up $1.60 (5.51%)
UNITED NAT FOODS (NasdaqGS: UNFI) serving a wide variety of retail formats including conventional supermarket chains, natural product superstores, independent retail operators and the food service channel, closed at $18.96
USANA (NASDAQ: USNA) develops and manufactures high-quality nutritionals, personal care and weight management product, closed the day at $19.82, down $0.24 (1.20%) with a 52wk Range of $18.25 - $51.50
WHOLE FOODS MARKET INC. (WFMI),a retail chain of organic foods in the USA. ended the day at $33.18, up $0.75 (2.31%) with a 52wk Range: $29.99 - $53.65
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