The natural food industry is undergoing a remarkable transformation, driven by the evolving needs and preferences of consumers. As this sector continues its impressive growth, product developers find themselves challenged to not only predict and respond to these changes effectively but also to create products that resonate with consumers’ desires for natural options while meeting the nebulous standards of “natural” as a label.
The term “natural” is a coveted label in the food industry, but its definition remains a point of contention. Despite the industry’s thirst for a clear and universally accepted meaning, regulatory bodies have yet to provide a concrete delineation of the term. The U.S. Food and Drug Administration (FDA) acknowledged the demand for clarity in 2016, stating that “natural” implies the absence of artificial or synthetic ingredients in a food product.
However, crucial aspects such as growing practices, processing methods, and production parameters remain open to interpretation. Manufacturers and end-users are left to navigate these grey areas on their own, often establishing individual standards.
The U.S. Department of Agriculture (USDA) attempted to bring some clarity to the term “natural” as it pertains to meat, poultry, and eggs. According to the USDA, a “natural” product should be free of artificial additives, colouring ingredients, and chemical preservatives. Additionally, it should undergo minimal processing. While these definitions aim to provide guidance, they still leave many questions unanswered, creating a challenge for both consumers and manufacturers to grasp the full scope of what qualifies as “natural.”
Shifting Landscape of the Natural Food Market
The natural food market, valued at approximately $69.2 billion, is experiencing a 6% 2-year compound annual growth rate (CAGR), according to Future Market Insights. However, in comparison to the organic food market, which is set to surpass $176.5 billion with a CAGR of 12.1%, the natural market still represents only about half the size. The broader food market, inclusive of all types, is estimated at $996.4 billion with a CAGR of 3.4%.
A significant driving force behind the surge in interest in natural foods is the increasing consumer preference for obtaining health and wellness benefits from their diets rather than relying solely on supplements. Informed by a greater understanding of ingredients, consumers are now meticulous label readers. The desire for foods and beverages that support health and wellness transcends generational boundaries, shaping preferences across all age groups.
When creating natural products, a key approach is aligning with the standards already set by buyers and end-users. Major players in the industry like Whole Foods, Trader Joe’s, Chipotle, and Panera Bread have explicit lists of ingredients they consider “unacceptable.” Consumer preferences also play a pivotal role in shaping the definition of “natural.”
Consumer perceptions of terms like “natural,” “clean label,” and “healthy” can be inconsistent. While consumers often associate “natural” with “healthy,” successful products in this category must deliver on the promises implied by their labelling. Natural flavours, colours, and textures are commonly used in natural product formulation. While they are well-defined, they can pose formulation challenges, requiring stability under various conditions and over the product’s shelf life.
As the natural food market continues to expand, it faces competition from the organic sector. Consumers are showing increasing interest in organic products, willing to pay a premium for their perceived benefits. However, the less stringent regulations and greater availability of natural ingredients offer advantages for natural product developers. Consumers are also blurring the lines between natural, organic, clean-label, and non-GMO, presenting both challenges and opportunities.
In the absence of clear regulatory definitions, litigation has emerged as a way to shape the parameters of “natural.” Legal disputes involving ingredients like ascorbic acid, citric acid, and sweeteners such as stevia and erythritol have contributed to the ongoing definition of “natural.” Companies have faced lawsuits based on labelling claims, highlighting the importance of carefully considering the source and processing of ingredients.
Consumer demand for healthier foods spans all age groups, with younger generations showing a pronounced interest in functional benefits, cleaner labels, and sustainable products. Older consumers, on the other hand, are exploring foods for their potential medicinal properties, seeking products that bolster immunity, enhance mental acuity, and counteract the effects of ageing.
In the evolving landscape of the natural food industry, the quest for a definitive “natural” definition continues. While regulatory agencies and legal battles shape the boundaries, product developers must remain attuned to shifting consumer preferences and emerging ingredient technologies. By meeting consumer desires for health, quality, and flavour while navigating the intricacies of labelling, the natural food market holds promising potential for growth and innovation.