Organic Leading the Health Food Marketing Trends in 2008

Over the last few years, I have focused more on the online marketing and business conferences. Having come from the life sciences background, it was a treat to be able to attend a health related event again. The largest health food B2B trade show in Canada is put on by the Canadian Health Food Association (CHFA). Last weekend, I attended the CHFA Expo West event in Vancouver and was able to sample lots of new, soon-to-be-released food products before they hit the market. More interestingly, I noticed some very interesting trends in the health food industry. There was no doubt that the biggest marketing trend for 2008 is going organic and all natural.

Ten to fifteen years ago, if you were to attend a health food show, you would see booth after booth of vitamin supplement companies. While supplement sales were growing exponentially at that time, many health companies manufacturing and marketing organic and all natural food products faced an uphill battle trying to stay in business. Consumers were looking for a magical pill and not a food product to increase their health. Based on last weekend’s show, it looks like consumer demand has taken a complete 180 degrees U-turn and is moving away from pills and heading towards the organic and all natural market place.

Organic: From Niche to Mainstream

Statistics Canada reported that in 2006, there were these many certified organic farms in Canada:

• 2,462 hay farms
• 916 fruit & vegetables farms
• 500+ animal farms

In order for farms and products to be certified organic, there are rules & regulations that must be met so there are actually many more farms that did not make the official organic list. In fact, Statistics Canada reported that there are 12,000 farms that use organic practices, but have not undergone a formal certification to identify themselves. These are the farms that sell through farmers’ markets and direct sales ventures (as opposed to a grocery store). Reason for this may be that while Canada has had national organic standards since 1999, these have been voluntary. However, federal regulations for organic products (the Organic Products Regulations), are scheduled to take effect on December 4, 2008. On this date, any product marked as organic must be certified by a certification body accredited by the Canadian Food Inspection Agency.

Stats Canada also reported that in 2006, although sales of certified organic products saw impressive growth, it still only accounted for less than 1% of the $46.5 billion Canadians spent in national grocery stores. Once the Organic Products Regulations kicks in later this year, many of the non-organic farms & products will no longer be able to label their products as such thus effectively competition will automatically be removed from this space. This will open up a huge market for organic producers. Certified industry players will have a massive advantage over players who are organic but not yet certified. Like in any other industry, early adopters will be the ones who reap the rewards.

Most Memorable Organic Conversation

I met with many successful organic businesses at the show but one conversation was particularly memorable to me. I spoke with an organic farmer named Dwayne Smith from Grainworks Inc., an organic farming company based out of Saskatchewan. It was very interesting talking to Dwayne as he believes in a complete approach when it comes to organic farming – not just simply following the rules but getting down to building a symbiotic relationship with the soil and even the machinery.

Most consumers purchase food from a grocery store but farmers like Dwayne are the ones who are hands-on and nurtures the land so that we can all benefit from it. Meeting and talking with Dwayne was definitely one of my highlights of the show. Thanks for the potato growing tips Dwayne. This season, I have my heart set on harvesting my largest potato crop yet!

Health Bar Manufacturers = Lead Generation Networks

If you have attended any online marketing trade shows in the last three years, you will know that there has been many new lead generation companies, otherwise known as CPA networks (cost per acquisition, cost per action or whatever you want to call them), popping up. At this health food show, the ubiquitous equivalent of a CPA network was the health bar manufacturer. I was completely shocked at the large number of exhibitors promoting health bars. Nuts only, fruit with nuts, in combination with something else, protein rich, soy based… the varieties go on. Just like the online marketing world, it will be interesting to see how many of these health bar companies find their niche and manage to stay in business in a year’s time. It’s difficult to see that all of them will be around for the long haul.

Summary of the CHFA Expo West Event

Take home message to businesses was that consumer demand is ever increasing for organic and all natural food products – adopt early and get your product on the market in order to stay competitive.

Overall, the show was very well organized and attracted many top notch exhibitors. I believe the show room floor actually took up the maximum amount of space within the Vancouver Trade & Convention Center. Luckily, Vancouver is adding an entire new section so that it will be able to accommodate even large trade shows in the future. Given that consumers are becoming ever more health conscious, I have no doubt that next year’s event will be even larger and more organic to boot.

Stats Canada Source: http://www.statcan.ca/Daily/English/080328/d080328a.htm