THE GROWING NATURAL FOODS MARKET: OPPORTUNITIES AND OBSTACLES FOR MASS MARKET SUPERMARKETS

Nessa J. Richman

No 14317, Working Papers from University of Minnesota, The Food Industry Center

Abstract: Seven serious obstacles hinder the success of mass market grocery stores that try to succeed in the natural foods market. Finding timely and complete market information, linking with natural foods suppliers, and pricing and marketing natural foods are the three most important. Uncertainty about future standards for natural foods is the only major obstacle for natural foods stores. The problems facing mass market stores trying to succeed in the natural foods market are related to the market structure for natural food, to compatibility between standard operating procedures in the mass market and natural foods market, and to inadequate data collection about prices and other market characteristics. The problem for natural food stores is due to policy, primarily the lack of strong standards for natural foods. In the survey that forms the basis for these conclusions, almost half of mass market retailers had increased the scale of their natural foods operations and diversified their natural foods offerings. But few were satisfied with the degree of success of this approach. More successful strategies included developing labels (i.e. brands) for natural foods and hiring special staff for natural foods. These strategies are uncommon among mass market stores. Natural foods retailers tried them more often. Both mass market and natural foods retailers considered these strategies to be successful. How can mass market retailers overcome the obstacles they face and take advantage of the opportunities that the natural foods market provides? One key requirement for a healthy market is consumer confidence. There are two steps that mass market retailers can take to bolster consumer confidence. First, they can work to ensure that the natural foods in their stores are consistent with the standards that natural foods consumers demand. Second, they can make the effort to incorporate the concepts behind the natural foods movement into their strategic planning (e.g. adding organic product promotions to advertising plans, and by taking account of the environmental implications of their own operations). In addition, by working in concert with other retailers, trade organizations and appropriate non-profit organizations and governmental agencies, mass market retailers can help create a healthy business environment for natural foods in the long term.

Keywords: Agribusiness; Demand and Price Analysis; Marketing (search for similar items in EconPapers)
Pages: 28
Date: 2000
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Persistent link: https://EconPapers.repec.org/RePEc:ags:umrfwp:14317

DOI: 10.22004/ag.econ.14317

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