Produce Category Memo: FMI Annual Survey Shows U.S. Consumers Prefer 'Locally-Grown' Produce Over Organic; Bulk Over Store-Packaged

The just released annual Food Marketing Institute (FMI)-Prevention magazine "shopping For Health 2008" consumer survey offers some significant shopper data in the fresh produce category.

This year, for the first time in the annual survey's history, consumers chose locally-grown produce over organic in terms of shopping preference.

When the cost is the same, 50% of the 2,700 adult consumers surveyed by research firm Harris Interactive for FMI and Prevention, say they would choose locally-grown fresh produce over organic, which only 28% of the respondents sited as their preference compared to local fruits and vegetables.

The 2,700 consumers surveyed also said they prefer bulk produce over store-packaged. A mere 9% of the U.S. shoppers polled said they would choose store-packaged produce over bulk, particularly if the bulk produce is locally-grown.

The only exception to that rule is fresh strawberries. If and when packaged strawberries are cheaper in-store than locally grown or organic berries, 45% of the survey respondents say they would buy the packaged variety. However, 34% would purchase locally grown and 22% would choose organic strawberries even if both varieties are more expensive than the packaged ones.

This finding is a bit of an anomaly however. First, most supermarkets and food stores in the U.S. sell strawberries in plastic tubs, thus meaning the majority of fresh strawberries, whether locally-grown, conventional or organic come packaged.

Second, the fresh strawberry season in the U.S. last for only about 4-5 months. The rest of the year the berries come from places like Mexico or Central America. These imported strawberries are almost always pre-packaged, so it makes the finding a bit of a moot point.

Additionally, since for at least half or more of the year, locally-grown strawberries aren't available to U.S. consumers--and in some part of the country local strawberries don't even exist-our analysis is that retailers shouldn't pay a lot of attention to this finding, although we do think it's illustrative of the overwhelming preference American consumers have for buying bulk produce over store-packaged produce.

The fact 50% of the 2,700 U.S. consumers surveyed choose locally-grown produce over organic (28%) is big news however. And, the annual FMI-Prevention survey is widely respected, therefore it should hold some weight in the industry.

Among the reasons consumers sited in the survey for choosing locally-grown produce over organic include:

• Organic is too expensive. A whopping 70% of the 2,700 shoppers surveyed say this is the case.
• There's no difference between locally-grown and organic to justify the higher cost. A solid 39% of consumers polled say this is the case.
• A surprising 33% of the 2,700 shoppers surveyed say they are concerned about the safety of organic produce.

This last finding is something the organic produce industry and food retailers need to pay close attention to. One of the historically key selling propositions of organic produce has been that's its safer and better for consumers because it's grown without the use of pesticides, fungicides, herbicides and synthetic fertilizer.

If 33% of the consumers surveyed are concerned about the safety of organics, yet 50% prefer locally-grown, which means local produce that's conventionally-grown, that essentially means one of the key points of differentiation regarding organic produce is being eroded in the consumers mind and shopping behavior.

Another survey finding the organic produce industry and food retailers who sell lots of organic produce should pay very close attention to is the overwhelming number of consumers in the survey who say organics are just priced too high.

One of the goals of the organics industry has been to try to get a wider spectrum of consumers in the U.S. to buy organic produce and foods, rather than catering to a consumer elite. However, this price perception, which is reflected in numerous other surveys, could prove to not only be a barrier of entry to this goal, but also could contribute to an erosion of organic produce consumers who already buy organic over conventional.

This is serious data. It's especially serious because of the current food inflation climate in the U.S., and elsewhere in the world. The costs of conventionally-grown foods is soaring across the board, and organic produce and other food products are increasing even higher.

The organic industry and major organic produce retailers like Whole Foods Market and others need to find a way to hold the line on the retail price increases of organic produce. If not, we believe there will be an eventual erosion in category sales. This will be the case not just because more an more consumers are opting for locally-grown over organic, but because the costs of organic produce becomes prohibitive for all but high income consumers.

Healthy eating

Regarding whether or not American consumers are or plan to eat healthier foods, the results form the survey offer a bit of a mixed bag.

Below are the key finding from the 2,700 shoppers surveyed regarding their healthy eating habits and plans:

The 'swap-out' factor

Although consumers admit to not always choosing the most diet-friendly option when it comes to unhealthy indulgences in product categories such as ice cream, cookies and salad dressing, many are amenable to healthier choices. The swaps that consumers say they would make:

• Healthier alternatives in the same product category, for example, those with less fat or fewer calories. Consumers reported they would purchase healthier salad dressings (41%), potato chips (36%) and ice cream (27%).

• 100-calorie packs of cookies--23% said they would purchase this over any other alternative-- but 20% of cookie-eaters would not change their habits at all.

• Drink less soda--29% of consumers choose this alternative — but 28% would not change their consumption.

How those who eat healthy succeed

Regarding how healthy eaters succeed in achieving that goal, the FMI-Prevention survey found the following key details:

• Successful eaters say their grocery decisions are driven strongly by goals to manage weight (52%). They are also more likely than average to shop in order to avoid future medical conditions or manage a current condition.

• They develop a plan and stick to it, starting with using a list when they shop--done by 65% of healthy eaters, compared with 42% of all consumers.

• Their plans include eating more fruits and vegetables (87% vs. 63% of all shoppers), limiting foods with trans fats (79% vs. 63%) and reducing portion sizes (79% vs. 47%).

• 83% eat dinner at home five to seven times per week, giving them better control over healthy ingredients, compared with 66% of total shoppers.

Who are these healthy eaters? They mirror the average shopper--that is, six in 10 are women, slightly more than half are married and about one in five is black or Hispanic.

“This survey shows that anyone can eat healthfully,” said Cathy Polley, R.Ph., FMI vice president of pharmacy services. “All they need is determination and direction, which food retailers can provide with nutrition information, in-store dietitians and clinics, often coordinated with supermarket pharmacies.”

This data, especially the finding that 83% of "healthy eaters" shop at grocery stores and eat at home far more than consumers in general do (66%) offers good news to the natural and healthy foods industry, along with retailers that offer lots of natural and healthy products in their stores.

The additional finding that over 20% more "healthy eaters" buy and eat more fruits and vegetables than consumers as a whole, also offers important merchandising insight to the fresh produce industry as well as to food retailers. Targeting this population segment with healthy fresh produce messages will pay big dividends.

Consumers and diet restriction

Another interesting set of finding from the survey of 2,700 U.S. adult consumers is how many of those surveyed are currently on calorie-restricted diets. Below is a snapshot of that data:

• More than one in three shoppers (38%) said they had started a diet in 2007.

• Two-thirds (66%) of these shoppers were still on a diet by November 2007.

• More than half of dieters (57%) said they are on no specific diet regimen; they are merely watching their calories.

The most significant finding here in our analysis is that 57% of those 38% who said they started a diet in 2007 have no specific diet regimen. In other words, they aren't on a specific diet like Atkins or Weight Watchers.

For the natural and healthy foods industry this offers a great opportunity to market healthy products to consumers on diets, which is good for the industry as well as for consumers, since regimented or formula diets seldom have a long lasting positive result.

This finding also offers the fresh produce industry further opportunity to market fresh fruits and vegetables to dieters, since the categories offer perhaps the healthiest diet options available.

Conclusion

The results of the annual FMI-Prevention "Shopping For Health 2008" consumer survey are good news for the fresh produce and natural and healthy foods industries. An overwhelming number of the 2,700 U.S. consumers surveyed indicate they buy, and plan on continuing to buy, lots of fresh produce, be it conventionally-produced, locally-grown or organic--or a combination of all three.

The fresh produce category data offers even further good news and opportunity for those people and groups promoting local foods initiatives, as well as for small, local farmers, food producers and marketers.

The data also offers important information to food retailers who either already are or are considering offering locally-grown produce in their stores. The response: do it if you aren't already doing so. And, if you are already doing some local produce merchandise and marketing, do more of it.

The survey results suggest locally-grown produce is in many ways the new organic. This doesn't mean organic produce is going to go away any tome soon. Not at all. Rather, it means-- along with other data we've seen as well as demonstrable sales of local produce--that locally-grown is right up there with organic as a key marketing and merchandising niche at retail.

The local foods consumer movement has been gaining steady steam for about the last five years in the U.S. In just the last two years or so, it's taken on a full head of steam. We see that head of steam--and the local foods movement--getting only bigger and more powerful.

The fresh produce category offers huge opportunities in the local foods realm. American consumers perceive locally-grown to be far fresher than any other type of produce.

In survey after survey, fresh is the key variable shoppers site when it comes to produce preferences. Since locally-grown fits this "freshness" preference the most currently, the ability to offer fresh, locally-grown produce at reasonable prices is an offering supermarket retailers can make bank with in our analysis.

Supply-Side Memo: Rude Health Organic Foods Might Have Created the 'Healthiest' Breakfast Food on the Planet; and it Tastes Good Too

United Kingdom-based Rude Health Organic Foods just might have created the healthiest breakfast food on the planet?

The British maker and marketer of organic and healthy breakfast cereals has created Rude Health Ultimate Organic Muesli, a wheat-free breakfast cereal blend of 100% organic superfoods, including organic whole grain oats, rye, barley flakes, assorted fruits, nuts, seeds and berries. The berries include blueberries, which are considered a "superfood" and are one of the top antioxidants , along with the Goji Berry, another top superfood.

There are more whole grains, fiber, ruffage, vitamins and antioxidants in a bowl of Rude Health Ultimate Organic Muesli than the average person gets in a week on an average western diet.

The ultimate muesli also is sugar and salt-free, as well has not containing any wheat.

Further, We can count at least 24 different healthy ingredients on the cereal's label. And, we can report, Rude Health's Ultimate Organic Muesli tastes great as well.

The ultimate muesli breakfast cereal isn't Rude Health's only cereal product. In fact, the growing organic foods company is carving a niche out for itself as one of the world's premier makers and marketers of organic, healthy and premium quality tasting breakfast cereals.

The company's line of breakfast cereals includes: various varieties of organic muesli (in addition to the ultimate variety), Organic Flakes, Organic Puffs, and Organic Porridge.

Rude health also markets Goji Berries in various package sizes. The superfood berries, which are high in vitamins, minerals and antioxidants, are becoming increasingly popular with consumers globally.

The idea behind selling the Goji Berries in various package sizes as well as in general, is that a handful can be tossed on top of all of the company's breakfast cereal varieties in order to achieve an even healthier morning fortification.

You can view the complete line of Rude Health brand breakfast cereals here; and even order some online if you choose to.

Rude but sustainable, 'green' and local

The organic foods company buys the ingredients for their cereals from companies which not only produce organic grains, nuts, fruits and the like, but also practice sustainable farming methods. Rude Health also has a policy that it will buy its ingredients from local (United Kingdom) farmers and suppliers whenever possible, or unless impossible.

For example, the company reports at present that 100% of the organic porridge oats and oatmeal used in its breakfast cereals currently is being sourced locally in the UK.

The company also is a member of the UK Soil Association, which certifies100% of the ingredients used in Rude Health brand cereals are organic.

Rude Health Organic Foods also tells Natural~Specialty Foods Memo it has a commitment to "green" or environmental production. Currently, the breakfast cereal bags are made from wood that comes from sustainable forests. The packaging also is 100% recyclable, as are the tubs cereal varieties like the Ultimate Muesli come in.

All of the package labels are made from Biotak, which is biodegradable, according to the company.

More importantly, the cereal maker and marketer says it on a continuous improvement track to make its entire operations--from production to packaging--as environmentally-friendly as possible.

One of Rude Health Organic Ultimate Muesli's biggest fans is that British global Goddess of cuisine Nigella Lawson.

Nigella (forst name only needed) has created a number of recipes on her TV cooking shows, such as "Lazy Loaf," using the healthy and tasty muesli. Nigella also includes that recipe in her cookbook, "Nigella Express," which features quick-to-make healthy, quality meals.

Other fans of the muesli who order it in multiples online include movie star Gwyneth Paltrow and supermodel turned actress Elizabeth Hurley. Both woman have raved about the breakfast--and snack time--cereal in newspapers and on television in the UK.

We exaggerate just a little--but Rude Health Organic Foods might have created the healthiest breakfast food on the planet with its Ultimate Organic Muesli.

The fact it also tastes good adds to its "ultimate" status. That combination--super-healthy and good tasting--leads us to conclude there's absolutely nothing rude about this muesli, except part of its name.

Supply-Side Memo: Giant Nestle is on the Prowl for Natural, Nutritional, Health and Wellness Food Companies to Acquire

The world's largest food company, Nestle, will soon have $11 billion dollars of cash on hand from its planned sale of 25% of its 77% stake in the U.S. eye care company Alcon, to drug company Novartis. Nestle announced the sale today.

Further, not too long after that, Novartis will acquire the remaining 52% of Nestle's original 77% stake (23% of Alcon isn't owned by Nestle in other words) for a fixed price of $28 billion, making the total purchase price of Nestle's (77%) stake in the U.S. eye care company by Novaris a whopping $39 billion.

Even more interesting to those in the natural products industry is the fact Nestle plans on using a big chuck of those new billions to acquire companies in the natural, healthy, nutritional and wellness food and product's sectors, we've learned.

This acquisition strategy fits well with the food giant's strategic positioning and strategy to become the dominant global corporate force in natural and nutritional foods. In fact, Nestle could use as much as half of the $39 billion, nearly $20 billion, to acquire natural, nutritional and healthy product food companies, we've learned.

In fact, one of our sources who is close to Nestle and thus needs to remain anonymous, told us on Monday Nestle executives have already identified a number of natural and nutritional foods companies which they plan on making acquisition offers to.

Switzerland-based Nestle has positioned itself into the world's foremost nutritional, health and wellness foods company, with top brands in these categories across the board. But it is far from finished. The world's "most admired" food company, as named by Fortune magazine, wants to dominate the nutritional and health and wellness categories globally because it's in these sectors where the company's leaders believe the most future growth will com.

Nestle makes and markets far more than just nutritional, health and wellness category food products of course. [Take a look at the company's brand portfolio here.] However, nutrition, health and wellness are the giant global food and beverage companies fastest-growing categories and where its going in terms of its overall global positioning, as we mentioned above.

Overall, Nestle controls food, grocery and beverage brands, and markets products in the following categories: bottled water (number one globally); baby foods; dairy products (including Hispanic and Asian specialty products); breakfast cereals (including partnering with General Mills outside of North America); and beverages (Nescafe coffee, Libby's fruit juices, Nestea and more, as well as a complete line of Hispanic coffee products).

Other categories include: ice cream (including marketing the frozen treat in China and the Middle East, among other places in the world), chocolate and confectionery (everything from basic chocolate bars to gourmet treats), prepared foods (everything from packaged soups and pasta sauces, to shelf-stable dinner entrees and frozen foods, including numerous specialty, ethnic, gourmet and natural/organic brands), and pet foods and pet care (the Carnation brand and Ralston-Purina brand, along with others.

Lastly, is the nutrition, health and wellness category, which Nestle is growing the fastest of all the above sectors in its consumer packaged goods and beverage group, and plans to use a major portion of the $39 billion from the sale of its 77% stake in Alcon eye care to Novartis to grow even faster by acquiring numerous companies in these categories, which are all related.

Nestle also has a huge global foodservice operation called Nestle Professional, as well as owning 30% of the cosmetics firm L' Oreal.

Look to Nestle for multiple acquisitions of natural, nutritional and health and wellness-oriented food companies in the U.S. as well as globally before 2008 is over.

Despite the global economic slowdown, Nestle believes there's no better time than the present to make major acquisitions to continue growing its nutritional sector. That's the primary reason, along with wanting to pay down some debt, the comapny is selling its 77% stake in eye care company Alcon.

Nestle's acquisition search is going to shake up the scene

There hasn't been much acquisition activity in the natural, health and nutritional foods manufacturing and marketing sector in the last year. With billions in its acquisition bank, Nestle is going to stir things up quite a bit and shake up the currently static M&A scene.

For example, there a number of successful, large and middle-sized natural and nutritional foods companies in the U.S. that are looking to be acquired or merged as they're in need of additional capital in order to get to the next level.

However, since there hasn't been a "big foods guy" like Kraft, General Mills, Heinz or Nestle (all which have made major acquisitions in the sector in the past) out there for a couple years, there's a pent-up demand so to speak in the natural, health and nutrition industry for suitors, in our analysis. Nestle could be that suitor many of these companies are looking for. Stay tuned.

Friday Fishwrap

End-of-the week news, ideas, analysis and opinion

Food and beverage trends 2008: A Natural~Specialty year is on the way
Natural, organic, specialty, gourmet, premium, fresh, healthy, green and sustainable top the list

If the various market and consumer researchers, prognosticators and analysts (including us) are right, 2008 will be a natural~specialty year in terms of the top hot trends in food and beverage marketing and consumption in the U.S. and Western Europe.

For example, a just released report by market research firm Datamonitor predicts the following top ten food and beverage trends for 2008.

>Probiotics, healthy foods
>Natural and organic foods and beverages, especially for kids
>Fresh foods, especially premium quality prepared foods
>High-nutrient Superfruits
>Exotic foods, especially foods from Africa
>Specialty foods that promote sleep and stress relief
>Healthy and natural foods with "crunchy" and "crispy" taste profiles
>Bold, hot and spicy foods
>Increased use of caffeine in beverages and foods
>Green, "eco-friendly" foods, beverages and grocery products

You can read a detailed summary describing these top 10 food and beverage trends for 2008 here, along with examples of numerous food and beverage products in these categories introduced this year that Datamonitor has tracked, and which point to strong growth for next year. You also can read a short piece summarizing Datamonitor's top ten food and beverage trends for 2008 published yesterday in Beverage Daily here.

As the Datamonitor report shows, the top ten food and beverage trends for next year all center around the natural/organic, specialty/premium, healthy/environmental sector. As we suggest here often, these categories (an consumer movements) are related and have strong synergies between them They're also increasingly converging together.

For example, natural and organic foods consumers tend to also be "greener" consumers. They also focus more on healthy eating and are most likely to be early adapters to foods and beverages like probiotics and superfruits, for example. Additionally, there's a growing convergence between specialty and premium foods and natural/organic foods consumers--and marketing. These consumers share a concern for quality. More and more, quality in terms of food and beverage products is meaning all-natural or organic as well, in addition to the elimination of food additives, preservatives and artificial coloring.

This "healthy" convergence is demonstrated by an emphasis on the part of specialty foods manufacturers and retailers (store brands) to introduce more and more new products that have natural or organic attributes as well as being premium quality. By the same token, natural foods manufacturers and retailers are increasingly going premium with their new natural and organic food and beverage products.

In fact, a new study from market researcher Mintel says the top food and beverage trend for 2008 will be "getting the junk out of food and beverage products." In other words it's the elimination of preservatives, additives, artificial flavorings and colorings and other such ingredients in their existing products, as well as not putting them in new products introduced in the majority of cases that will be a key event in the food industry beginning next year. This isn't to say food and beverages with these artificial ingredients are going away anytime soon. Rather, Mintel says there will be a rapid decline in their use beginning in 2008.

This junk-free food and beverage movement has been picking up steam in the U.S. and Western Europe, and dovetails with the natural, organic, green and sustainable consumer movements. The definition of healthy is being expanded we believe to include not only what is in food but how and where it's grown, packaged and tastes. In other words, healthy not only means a healthy person, but a healthy environment as well. It's becoming an external as well as internal definition. You can read about the Mintel 2008 food and beverage trend study in more detail here.

As we mentioned above, taste is a key factor--and premium taste is one of the hottest trends for 2008, according to a new study from Packaged Facts and Trendwatching.com.

A new study from market research firm packaged facts says sales of specialty and gourmet foods are predicted to grow by a whopping 63% over the next five years. This consumer flight to premium quality foods is being driven by a number of factors, according to the researcher. These factors include consumers' becoming more sophisticated via travel and multiculturalism, retailers carrying expanded selections of specialty, gourmet and ethnic foods, and a convergence between specialty, natural and organic foods.

This growing consumer sophistication and the availabilty of a wide variety of specialty, gourmet and ethnic foods, not only in specialty stores and supermarkets, but in natural foods stores, mass merchandisers like Wal-Mart and Target, online, and even in drug stores, is growing the premium foods market to the point that Packaged Facts predicts it will grow to $96 billion annually in five years, compared to the categories current sales of $59 billion. (You can read more about the Packaged Facts' specialty and gourmet food and beverage report here.)

Packaged Facts isn't the only consumer research firm to predict this huge growth in the specialty, gourmet and premium food and beverage categories. (We use all three of these terms because each has certain distinctions. However, from a sales standpoint, they are one category.) Trendwatching.com, a consumer products trend analysis firm and website, is predicting 2008 will be the year for the "premiumization" of nearly everything and anything, including food, grocery and beverage products. By this, the firm means virtually no product category will escape having some sort of premium version.

"Premiumization" is one of the consumer research firm's top 8 trends for 2008, along with what it calls status spheres, snack culture, online oxygen, brand butlers, crowd mining, MIY (make it yourself) and eco-iconic. (you can read more about these seven other trends here.)

In terms of the food and beverage industries, "premiumization" means an increasing trading up by consumers to more premium-quality products. It also means food and beverage manufacturers, marketers and retailers will not only continue their current rapid pace of premium specialty and gourmet foods new product introductions, but will excellerate it even more.

Trendwatching.com also says we'll see niche "premiumization" in the food and beverage sectors. For example, limited addition super-premium food and beverage products like deserts and bottled waters, will be introduced in very upscale packaging and for a limited period of time.

As examples, they sight Evian's new, limited release Palace bottled water. Set to be introduced either at the end of this year or early in 2008, the water will only be available for sale at high-end bars and restaurants. The sleek bottle features a specially designed pouring top and comes with a stainless steel coaster. It will sell for between $15-$20 (USA) per bottle.

Other super-premium bottled waters include Bling H20. Bling water comes in a frosted glass-bottle with a cork that's embellished with crystals. The water is a much a personal accessory as it is a beverage. It's big with the Hollywood crowd, and was featured backstage at the MTV awards and the Emmy's this year.

If the first two bottled waters aren't premium enough for you, there's Tasmanian Rain. This utra-premium water comes from the pristine north coast of the Australian island of Tasmania. According to the bottlers, the water comes from a spot where the World Meteorological Organization records the world's purest air.

Beer also is getting "premiumization" treatment. This summer, Carlsburg launched its Carlsburg 900 in a limited number of bars in Stockholm, Sweden. The brew is made with refined virgin hops, selected crystal malt, and is triple filtered in a special process that ensures a pure, delicate taste, the brewer says. Carlsberg 900 also is priced at the premium end of the price range. A bottle costs about the same as a class of quality champagne.

Trendwatching.com also sights some premium foods as an example of niche categories that are undergoing the "premiumization" process. Chief among these are marshmallows. Dean & Delucca's gourmet Boule' Marshmallows come in such flavors as passion fruit, lemon chiffon, pure vanilla and rose petal. They retail for $28 a bag--and it's not a very big bag. Another gourmet foods maker, Pete's Gourmet, sells premium flavored and dipped marshmallows for $1 each. Dean & Delucca recently reported that in its stores and on its website the pricey gourmet marshmallows are selling out.

Honey's and chocolates are two other categories the consumer research firm says also are getting "premiumized" in a big way. Foods and beverages lead this "premiumization" trend, according to Trendwatching.com. Of course, we see this daily in nearly every food category in the supermarket. Retailers are aiding this trend by creating store brand specialty, gourmet and premium foods and pricing them more reasonably than manufacturer brands, thus expanding the market for these goods into the moderate income sector.

Fresh foods also are getting the "premiumization" treatment. Whether it's in-store fresh prepared foods at grocers like Whole Foods, Wegman's, Safeway Stores and others, or manufacturer-produced fresh and frozen entrees, the trend is towards premium quality. Tesco's entry into the U.S. market with it's Fresh & Easy Neighborhood Markets also is fueling the growth of fresh, prepared foods marketing and sales. The retailer is offering scores of fresh, prepared foods at its Fresh & Easy stores in California and Nevada (13 open so far). The grocer plans to have at least 200 stores open in the next two years, and all will offer extensive selections of premium prepared foods.

As we end 2007 and move into 2008, our analysis tells us the hot button trends and consumer movements will be: natural and organics. The categories will continue their rapid growth. However, we see retail prices on organics coming down at least 5% as retailers like Safeway, Kroger and others continue to expand and grow their store brand organic grocery lines.

Specialty, gourmet and ethnic foods. As the research discussed in this piece demonstrates, category growth will be huge. We also see an increasing number of large, multi-national packaged goods companies getting deeper into specialty foods marketing. Major companies like Kraft, Heinz, General Mills and others will move upscale with line extensions and even new brands.

Ethical consumers and marketing is a growing trend, and it will continue to grow in the years ahead. Consumers increasingly want to know how and where their foods are produced. They also want to know the corporate behavior of the companies that produce their foods. It's a small movement at present, but will grow bigger in the next five years.

Local food sourcing also will continue to grow. However, consumers love imported foods too much to give them up. Therefore, in the main, locavores (those who only eat foods produced within a 100 miles of where they live) will remain a small, minority movement. However, more and more consumers will buy local foods whenever they can, making it an important movement and marketing concept for food marketers, retailers, consumers and small farmers.

Green issues will begin to move into the mainstream in a big way in 2008. More and more consumers will demand sustainability from food producers, marketers and retailers. The industry will respond, led by key players like Wal-Mart, Whole Foods, Safeway, Tesco and others on the retail end. On the supply side, companies like Proctor & Gamble, Clorox, Hain-Celestial and others will move further with their green initiatives, setting an example for others in their industry to follow.

Healthy foods, especially foods containing new natural ingredient innovations, will continue to be a major hot button. We are beginning to see healthier foods positioning throughout the supermarket, from the dairy case to the snack aisle. This will intensify, and grocers will get more involved in their customers health issues by putting health and wellness clinics in-store, increasing the quality and quantity of health labeling information, and even demanding their suppliers produce healthier products.

As we said at the beginning of this piece, there's a synergy between these top trends for 2008. That synergy is the growing convergence between the natural and specialty foods industries, and the growing consumer movement towards eating healthier and defining healthy as not only something internal but external (the environment). Within this mix, taste is key. Consumers won't trade off healthy and "green" for quality anymore. In fact, they want premium quality taste along with the natural, organic, healthy and green attributes in their foods---and from their food producers and retailers.