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Goods labelled organic and natural are no longer niche. These goods have entered mainstream retailers and become a large part of the market, with a broad base of consumers now purchasing them. In an otherwise stagnant industry, these "responsible consumption" (RC) products represent a major area of profitable growth, says a Boston Consulting Group report.
According to a BCG Analysis, which studied point-of-sale data at grocery, convenience, department, and wholesale-club stores, in the US alone, RC products account for 15 per cent of all sales in the chains. Also, the sales have grown about 9 per cent annually in the past three years - making up 70 percent of total growth. Similar turnover and growth levels are expected across developed markets. Global surveys point to future growth as well, as most consumers intend to expand the number of categories in which they seek out RC products.
Most of this growth, however, is going not to 'A' brands - the major product brands -but to specialty brands and to both specialty and conventional retailers. While 'A' brands bring major scale and distribution advantages to the table, consumers are less likely to trust them when it comes to RC products. The report says, to build trust, 'A' brands can either acquire a specialty brand and grant it considerable autonomy or build an RC brand internally with external validation.
