After Boom and Bust, Could Hemp Market Be Stabilizing?
This article first appeared in the May 2024 issue of Presence Marketing’s newsletter.
By Steven Hoffman
Could the hemp industry be on the cusp of a turnaround? After several years of volatility for U.S. hemp growers, prices and acreage in many states are beginning to stabilize or are rising modestly, according to the National Hemp Report, published by the U.S. Department of Agriculture (USDA) in April 2024.
According to the USDA, the value of U.S. hemp crop production in 2023 totaled $291 million, up 18% from 2022. Based on a survey sent out in January 2024 to producers across the country as part of USDA’s national agriculture census, the report shows signs of renewed market growth and improved on-farm efficiencies. “There was the big boom, then the big falloff, and this year everything is sort of leveling out,” Joshua Bates, a USDA statistician who wrote the landmark National Hemp Report, told MJBiz Daily.
“The hemp industry is stabilizing into its various categories including: 1) cannabinoids, nutraceuticals and flower; 2) food, feed and nutrition; and 3) fiber and industrial materials and applications. At this time, a much clearer picture is emerging as to where these categories can end up over the next three, five and ten years,” said Morris Beegle, publisher of Let’s Talk Hemp and producer of NoCo Hemp Expo, the leading trade show and conference for the hemp industry.
“The past several years posed significant challenges, starting with the pandemic’s onset and exacerbated by the federal government’s regulatory ambiguity regarding CBD and hemp-derived cannabinoids. Add to that burdensome regulations imposed on farmers endeavoring to cultivate hemp fiber and grain – crops that deserve equitable treatment akin to any other commodity. Such circumstances deter participation in this budding industry. What we truly require are coherent federal regulations applicable universally, instead of disjointed state-level initiatives that render the industry vulnerable and unsupported,” Beegle said.
Recovery on the Horizon
Production of industrial hemp for food, fiber and flower took off after it was legalized in the 2018 federal Farm Bill. In the years before the Covid pandemic, hemp acreage was on the rise, entrepreneurs and investors flocked into the market, and there was an explosion in the number of CBD and other hemp-related brands.
However, since 2020, the market for products made from hemp (defined as containing less than 0.3% THC) experienced a significant downturn, sparked by the pandemic and made worse by a lack of regulatory consistency over CBD and other hemp-derived cannabinoid compounds from the U.S. Food and Drug Administration (FDA) and state regulators. Investors pulled back. Brands did everything they could to survive; some didn’t. Overproduction during this time, too, led to steep drops in the price of hemp. As a result, hemp acreage plummeted from an estimated peak of 37,000 acres harvested in 2020 to a little more than 19,000 acres harvested in 2022.
Now, according to USDA’s hemp report, overall hemp acreage harvested in 2023 increased 21% to a total of 23,475 acres, signaling a potential turnaround in the market.
Hemp flowers for CBD and other hemp-derived cannabinoids -- including the intoxicating compounds Delta 8 and Delta 9 – dominated the market in 2023. While flower acreage remained relatively flat at approximately 7,000 acres in 2023, flower producers experienced an income gain of 35%, according to USDA data. Of the $291 million in market value for hemp in 2023, $241 million of that income came from hemp flowers. However, based on regulatory and safety concerns around Delta 8 and other hemp-derived psychoactive compounds, a number of industry observers feel this growth may be unsustainable, as lawmakers could severely limit the sale of these products.
Speaking of the hemp flower sector, economist Beau Whitney of Whitney Economics said, “It is quite possible that the cannabinoid industry has peaked. The excess inventories are mostly depleted and there is not enough acreage, in our view, to backfill with enough supply to sustain the level of sales experienced currently. This is a mistake by legislatures and regulators and now opens the door up for cheaper, but potentially lesser quality imports,” he cautioned.
Hemp grown for fiber – used in textiles and industrial applications – accounted for 52% of all hemp acreage harvested in 2023. While acreage grew, USDA reported that prices dropped and farmers brought in less income. However, says Whitney, “Hemp fiber is where we are forecasting significant growth in the short term, while cannabinoids and grains get sorted out. Hemp for plastics and automotive are already established in the global marketplace and are expanding in the United States. Hemp as a construction material is also increasing, but that growth has been somewhat sluggish in its initial ramp-up.”
Regarding hemp grown for food and grain, Whitney remarked, “The food industry is pretty steady. One major game changer would be FDA approval for hemp grains as an animal feed. It appears that the FDA is setting up unrealistic requirements for cannabinoid content in feed, so much so that consumers/animals would have less strict requirements for heavy metals and poisons than CBD content. There is a huge market for hemp grain internationally, but other supply chain issues and geopolitical tensions are impacting expansion efforts by U.S. hemp operators.”
According to USDA’s National Hemp Report, hemp grown for grain accounted for 17% of all hemp acreage harvested. Canada and China remain the world’s leading countries for hemp grain production, yet, as plant-based foods become more popular, U.S. growers stand to benefit from opportunities in growing hemp for food, as it is one of the richest plant-based sources of protein, essential fatty acids and other key nutrients.
“The use of hemp in automotive, pulp and paper (packaging), and building material applications are all increasing in the pace of growth,” Whitney added. “The major headwind is the narrative that hemp is a drug. The lack of awareness and education by policymakers on the potential of hemp is its limiting factor. Policymakers are using a sledgehammer instead of a scalpel when making hemp policy, and it’s having a ripple effect throughout the industry from an operator, investor and infrastructure perspective,” he said.
Stuck Between FDA and the MJ Industry
“There are two big battles going on in Washington, DC, right now. One is the hemp industry against the FDA. The other is hemp vs. marijuana,” observed Jonathan Miller, General Counsel of the U.S. Hemp Roundtable, the hemp trade’s leading advocacy and lobbying group.
“We’ve been trying to get the FDA to regulate CBD and other extracts. First, they said they were working on it and now they say they need congressional authority. It’s a game of pointing fingers – Congress says it needs guidance from FDA, and FDA says it needs direction from Congress, so we’ve got a stalemate. However, there has been a lot of congressional and public pressure on FDA to act, so that may be a reason why the agency is talking to us now,” Miller said. “We would love to see something resolved this year; there is talk of an interim step where Congress could potentially pass a law to validate existing state programs in the absence of consistent federal regulations. The Farm Bill may not happen until next year; meanwhile our efforts to find a vehicle for this compromise will continue.”
And, Miller said, “As always, we advise companies to act like they are being regulated by the FDA as a dietary supplement or a functional food and beverage product, and to operate within those regulations.”
In referring to competition with operators in the marijuana space, Miller said, “Regarding the marijuana industry, it is not monolithic, but there are a growing number of organizations that have made it their objective to kill the hemp industry as a means to capture competitive gain. This includes ATACH, the American Association for Hemp and Cannabis – though there are no hemp members – and the US Cannabis Council. Both have introduced plans that they would like to see in the Farm Bill to federally criminalize any hemp product that has any level of THC in it. That would criminalize all but CBD isolates,” he said.
“We are fighting both in the public eye and behind the scenes right now, and there’s a big battle going on in California in this regard. This is a threat we have to watch from the left flank. We are hopeful that any effort like this will die in Congress, but we are not banking on it; in fact, we are working very hard to prevent it. Just last week, we met with 55 different members of Congress and staff to discuss these issues and to present the hemp industry's position,” Miller added.
“All sectors of the hemp industry are growing, with the cannabinoid sector growing rapidly, to the point where it is outpacing the marijuana industry,” observed cannabis industry attorney Rod Kight of Kight Law. “The opportunities exist for nimble companies that are willing to take the time to navigate the rapidly evolving regulatory landscape and who can pivot as needed when regulations and markets change. I have hope that hemp can lead the path to true and comprehensive cannabis reform.”
FDA’s Position
When asked if the FDA could envision a scenario in which it would allow the sale of CBD as a dietary supplement without congressional action, Patrick Cournoyer, Senior Science Advisor with the FDA replied with the following:
“The FDA has concluded that the existing regulatory framework for dietary supplements is not appropriate for CBD. Given the available evidence, it is not apparent how CBD products could meet the safety standard for dietary supplements. For example, we have not found adequate evidence to determine how much CBD can be consumed, and for how long, before causing harm. Therefore, we do not intend to pursue rulemaking allowing the use of CBD in dietary supplements.”
Cournoyer’s office referred to FDA’s statement from January 2023, where the agency concluded that “existing regulatory frameworks for foods and supplements are not appropriate for cannabidiol,” and that it will work with Congress on “a new way forward.”
Added Cournoyer, “The FDA supports sound, scientifically based research into the medicinal uses of drug products containing cannabis or cannabis-derived compounds and will continue to work with companies interested in bringing safe, effective, and quality products to market.” Cournoyer referred to guidelines published on FDA’s webpage, “FDA and Cannabis: Research and Drug Approval Process.”
In addition to food, supplements and drugs intended for human consumption, FDA has regulatory oversight of animal feeds. Regarding the use of hemp in animal feed, an FDA spokesperson said, “After comprehensive review of data submitted by a sponsor, in January 2024, the FDA recommended to the Association of American Feed Control Officials (AAFCO) that a proposed ingredient definition for hemp seed meal in the feed of laying hens be included in the AAFCO Official Publication. The FDA has not reviewed any other submissions for the use of hemp seed or hemp seed derived ingredients in animal food.”
Wendy Mosher, VP of the Hemp Feed Coalition, told AgWeb in January 2024 that allowing hemp seed meal into feed mixes for laying hens marks the first hemp feed ingredient to get federal recommendation and interest by AAFCO. “You can’t have a commodity crop without a feed opportunity for that crop,” Mosher said.
In the absence of federal approval of hemp in animal feed, Texas legalized hempseed oil and hempseed meal for chickens and horses in 2023. Kentucky in 2022 allowed a limited amount of hempseed meal and hempseed oil as ingredients in the diets of layer, broiler, and breeder chickens. Montana legalized hemp or hemp-derived products in 2021 for “non-consumption animals,” i.e., pets, specialty pets, and horses, reported Hemp Benchmarks. However, in December 2023, New York Governor Kathy Hochul vetoed bills to allow hemp seed in animal feed, citing the need for more information.
While federal lawmakers and regulators move slowly in allowing the use of hemp in animal feed, USDA is providing grants to universities and others to research the potential use of hempseed, meal and biomass in animal feed. For example, researchers at Prairie View A&M University in Texas in 2023 received a $300,000 grant from USDA to explore hemp as an alternative grain in animal feed.
Building with Hemp
Building with hemp in the United States is increasing year over year, said Jean Lotus, Editor and Publisher of HempBuild Magazine. “Prices on building-grade hemp hurd remain high and the supply chain is neither complete, nor consistent. But hemp building in the United States is capturing the imaginations of developers and motivated owner-builders. Notable projects this year include a multi-unit tip-up hempcrete panel project in Newburyport, MA, and successful attainable hempcrete housing built by the Lower Sioux of Morton, MN,” she said.
“People may say hemp is dying, but it also recently received approval from the IRC (International Residential Codes) for the use of hempcrete in the U.S. for commercial construction,” noted James Johnson, Principal of JJGro in San Antonio, TX. Johnson, who discovered hemp’s healing properties while dealing with PTSD after 21 years of service in the U.S. Air Force, consults with hemp producers throughout the country. “Hemp is starting to be considered as part of the mix in mainstream commercial construction. It’s not going to replace traditional materials, but it will capture between 2% and 5% of the building construction space, Johnson predicted.
Lotus added that research in hemp building materials received significant funding in the past year, including $1.9 million from the U.S. Army; $1.5 million from the Department of Energy; and $1.1 million from the New York State Energy Resource and Development Authority (NYSERTA).
“Meanwhile, the regulatory environment for hempcrete's superior insulation and carbon sequestering properties is improving,” she said. “In April 2024, the U.S. Department of Energy released a roadmap to decarbonize the U.S. building industry. The report, Decarbonizing the U.S. Economy by 2050: A National Blueprint for the Buildings Sector, emphasized building with biogenic, regenerative materials. Hemp-lime and hemp-batt insulation perfectly fit the bill! With new companies developing carbon credits for hempcrete projects, there is more excitement and investment opportunity to come.”
“We are seeing increased interest in hemp across the board from consumers, universities, and large corporations wanting to utilize hemp as an input or ingredient. I think there's opportunities in every sector for savvy, smart business operators. While cannabinoids provide the biggest boom/bust potential, there are long term opportunities in the fiber and grain markets as the regulatory framework within those categories will eventually get to a point of any other commodity crop, for the most part,” said Morris Beegle.
“As to headwinds, it's still all political and bureaucratic,” Beegle added. “The industry needs to be unified in its voice to combat correctly, and I think we have made real progress the last few years with the vast majority of the ‘real’ industry aligning on messaging and action. We’re also seeing progress and persistence of the industry in delivering on the promise of hemp as an alternative resource to many of the world's current and future problems. The future is bright regardless of what some in the media, and some on social media, would like people to believe.”
Save the Date: NoCo Hemp Expo, Aug. 10-12, 2025, Estes Park, CO
Are You Expo Experienced? Insiders Share Tips for the Best Expo West
By Steven Hoffman
Natural Products Expo West, first launched in 1981 and held every year since, at the Anaheim Convention Center in Anaheim, California, is the world’s largest natural and organic products trade show. Spread across five days, this year’s event, held March 12th to 16th, is expected to attract more than 65,000 trade visitors and over 3,000 exhibiting companies.
For business leaders, founders, entrepreneurs, retailers and others in the natural channel, attending Expo West is considered essential. However, as it can be costly, time consuming and a bit overwhelming, we asked industry insiders and colleagues their favorite tips to make the most of the show. Read on for some helpful hacks to maximize your Expo experience.
Karen Farrell, VP of Brand Services, PRESENCE
First, be sure to visit PRESENCE’s Hospitality Room at Expo West, Room 210A, at the Anaheim Convention Center. Trade members are welcome to visit during show hours for snacks, beverages, a place to meet or take a break, and to catch up with Presence Marketing team members.
On a self-care level, realize that all the restaurants and coffee shops are going to be crowded, for breakfast, in particular. Consider putting together a Whole Foods Market (or other) order with some basics for your hotel room to be delivered the night you get there. That way, you can get some nourishment and avoid long lines. Also, throw a healthy snack in your bag for nourishment during the day. This helps avoid ‘trade show stomach.’ I only sample things I haven’t tried before — samples are meant to be samples, not lunch! Also, make restaurant reservations well in advance of the show, preferably within walking distance, if possible. And if you can, consider making hotel reservations for next year’s (2025) event as soon as possible, as hotel space near the convention center fills up fast and is always in demand.
Leanne Thorsson, Director of Health and Natural Foods, Traditional Medicinals
Set appointments in advance; everyone’s time is tight at Expo West, so if you’re not on the calendar, you may not get the meeting. There’s always excitement and an extra level of engagement at the show. Plan in advance what you wish to accomplish — if it’s to visit booths, make a plan of what you want to see. We schedule meetings with account executives, regional managers, and major retail, distributor, and other key partners. This year, we are meeting with two new export partners for the first time; the event gives us an opportunity to meet with them in person and say hello. The show is a great way to get that human interaction, make the connections, talk about some of the larger items, and then set the stage for future conversations. Also, be sure to make unplanned time to walk the show and let some magic happen.
Stacy Gangestad, Director of Sales Management, Gimme Seaweed
Working as an exhibitor on the brand side, none of us in sales ever want to leave the booth, so that makes for long days. Taking a walk each day and getting some fresh air beforehand helps set the stage for the rest of the day. Wear comfortable shoes and get the extra padding under the carpet for your booth. We’ve learned over the years that a lot of initial conversations happen, but not a lot of business decisions are made at the show. It’s all about the follow up from there.
Also, consider after hours networking opportunities at Expo West: Go out to dinner with brokers and retail partners; attend events where there may be opportunities to connect with key buyers and other decision makers. Sometimes, you might run into a key contact just by going to the Hilton and Marriott lobbies, where many gather after each day of the show. We exhibit in Hall E — it’s a great location and the days go by fast because of all the positive energy and great vibes down there.
Jonathan Lawrence, VP of Center Store, Fresh Thyme Market
I’m a huge fan of Expo West. It’s very impressive, but can be very intimidating, not only to retailers and new buyers but also to brands (especially new brands). Tip number one is to capture the retailer’s attention. First thing you want to do is share the highlights around your brand strategy, specifically, why did you create this product and what makes it different from other products currently on shelf.
Have a positive and open-minded attitude. Be open to having conversations with people at all levels. When you’re talking about your brand, your product, talk to everyone that will listen, because everyone’s a consumer. Your product could be the next new product they tell people about. They might be able to give you great feedback, they might be able to make a great connection for you. Talk to the other brands when you’re at your booth. Some of those best connections are the people right next to you. The natural foods community is all connected.
Be efficient with your time. There are thousands of brands out there, so you don’t get a lot of time. Make sure you’re prepared. Have your elevator pitch ready, have maybe a sell sheet and product samples ready. Make sure you’re engaging. Don’t be sitting back behind your booth. Don’t be on your phone, looking down. Act like you want to be there, enjoy it, enjoy the fact that you’re in front of all these people at the biggest trade show.
I would focus on new retailers or new people that you don’t have current relationships with. And then keep conversations going. Not everything happens on the trade floor – great connections can be made in hallways, in passing on the show floor, off the show floor and at dinner. Utilize all the time that you have. While you’re there, you’ll have plenty of time to rest when you get home.
As a retailer, once we get home, we’re exhausted. But then Monday comes around and it’s back to work. Take a little time, but then make sure you’re following up. I would say a personalized note, don’t just send a canned email, that’s not very personal, it doesn’t show that you took the time to connect after. Send samples, I would say between a week to two weeks after. If it goes further than that, it might not be top of mind anymore. So, make sure you act fast.
Benji Fitts, Director of Growth Strategy, SPINS
So, you’re at your booth, spent a lot of money to get to Expo West, you’re meeting people, shaking hands, all that sort of fun stuff. And you’re going to need this little piece of paper, your sell sheet, to talk about your product.
There are just some simple things that you can do to make sure that your sell sheet looks good. First of all, it’s usually a piece of paper, 8½” by 11”, usually double-sided. You don’t have a lot of visual real estate so really, this has to be an amalgamation of the best things that you could possibly say about your product. Be brief, be succinct, and get the message across. Second, if you have the sell sheet in front of you, squint your eyes at it and if the biggest, most unique thing about your product, or whatever message you’re trying to convey, isn’t immediately apparent, then it needs to be fixed.
These shows are really all about discovery, finding out what’s new, what’s next. If this is what’s driving your product, is what is differentiated, innovative, what’s new and fresh about whatever you’re making, make sure that’s the primary message that a user is going to receive whenever they pick up one of these pieces of paper.
The storytelling element is really what drives a lot of the passion behind things. It’s a very passionate group of buyers, it’s a passionate industry, so lean into that a little bit, right? Make sure you’re highlighting sustainability and the key differences between you and the competition. It’s also smart to sometimes talk about your distribution partners or other people who you are already partnered with … and don’t forget to put your contact info and a call to action. Don’t just put a name and a phone number on there, but say, ‘Give me a call and let’s do business together.’
Allison Salvati, VP, Compass Natural; Former Marketing Lead for Bhakti Chai and noosa yoghurt
If you’re an exhibitor, you’ll want to collect contact information from as many people as you can who visit your booth. It’s up to you to collect that data; New Hope won’t share attendee or exhibitor contact lists. As such, it is recommended to purchase one or more seats on Expo West’s lead retrieval app. With it, you can scan badges using your smartphone camera, and at the end of the show, download contact info for every individual you and/or your team scanned. Also, consider cost-effective opportunities to amplify your brand at the show, including applying for a NEXTY Award for your new products, displaying in the New Products Showcase, and considering some of the more budget-minded sponsor opportunities for brands at Expo West, such as the Retailer’s Early Access Box. Check in to your Expo West Exhibitor Hub dashboard often so you don’t miss important deadlines, such as shipping to the show. Take advantage of Expo West social media tools, too, to promote your exhibit at the show.
Jim Slama, Managing Director, Naturally Chicago
Expo West is the big kahuna of trade shows in the natural products industry. Last year 65,000 attendees came to visit the booths of 3,000 vendors showing their wares. For brands, there is no better place to connect with retail buyers.
Michael Movitz, Co-Founder, Brandjectory; Managing Partner, The Movitz Group
My advice would be to attend as many social events as possible to network, network, network! I also suggest using a digital business card like Blinq or Flowpage. They’re easy to use, environmentally friendly and, in addition to contact information, can include links to your website, social media profiles and other online resources. Also, don’t forget to fully charge your devices and bring a portable phone charger – trade shows can be draining on your device’s battery, and having a backup charger can be a lifesaver.
Kelly Miano, Brand Strategy, Innovation and Launch Leader
Follow up. All of those connections you made are great but all that is forgotten if you don’t follow up in the weeks/months following Expo. Be selective in your sampling — try not to go back and forth between savory and sweet, your stomach will thank you. Drink more water than you think you need. It will help with headaches and you won’t be so tempted to try every sample. It’s easy to get sensory overload; it’s OK to take a break when you need it. Expo can be stressful — we’re on little sleep, excited, nervous, under pressure to land a sale. Everyone is trying to pack in as much as possible into a few short days. Assume positive intent, be gracious and kind. This is our industry, we are what we make it.
This article is based on personal interviews with industry leaders; a seminar hosted on Feb. 7, 2024, by New Hope Network and Naturally Boulder entitled “Beyond the Booth: A Blueprint for Creating Unforgettable Tradeshow Experiences”; and a Feb. 15, 2024, webinar hosted by Naturally Chicago, “Master Your Retailer Sell Story for Expo West.” You can access the Naturally Chicago webinar recording here.
Steven Hoffman is Managing Director of Compass Natural, providing public relations, brand marketing, social media and strategic business development services to natural, organic, sustainable and hemp/CBD products businesses. Compass Natural serves in PR and programming for NoCo Hemp Expo and Southern Hemp Expo, and Hoffman serves as Editor of the weekly Let’s Talk Hemp Newsletter, published by We are for Better Alternatives. Contact steve@compassnaturalmarketing.com.
From Dry January to Sober October, Non-Alcoholic Beverage Trend Extends Throughout the Year
This article first appeared in Presence Marketing’s February 2024 newsletter.
By Steven Hoffman
From Dry January to Sober October, sales of adult-oriented, non-alcoholic beverages are taking off throughout the year, as Gen Z consumers, older health-minded individuals and others increasingly prioritize wellness and moderation in their drinking habits.
With New Year’s resolutions in mind, sales of non-alcoholic (NA) beverages consistently surge at the beginning of the year, when many adults take a break from drinking during what has become known as “Dry January.” However, according to Nielsen IQ, non-alcoholic drinks “are now a staple during all major drinking holidays, especially the 4th of July and year-end celebrations,” Fox Business News reported in September 2023.
As more Americans embrace alcohol-free options, sales of non-alcoholic beer, wine and spirits at off-premise locations such as grocery stores increased 31% to $510 million in the 12 months ended July 29, 2023, Nielsen IQ reported. While NA beer dominates the segment with 86% of the market share, followed by NA wine at 11%, alcohol-free spirits, which comprise only 3% of the category, saw sales grow by 94% over the previous year. Non-alcoholic adult beverage sales grew by double digits in terms of dollar amount spent, and five states —California, Colorado, Massachusetts, Michigan and Ohio — accounted for 30% of the total amount.
Retailers, manufacturers, restaurants, bars and others are capitalizing on this trend by offering more non-alcoholic options, including “mocktails” and mixers that can be enjoyed with or without alcohol. Products are proliferating, such as booze-free beer and wine, functional beverages made with adaptogens, nootropics and other botanical and nutritional ingredients, energy drinks and other adult-oriented drinks made to take the place of cocktails and spirits.
According to Beverage Daily, online seller Drizly reported that there were over 80% more non-alcoholic brands available on its platform in 2023 compared to the previous year. Today, consumers can opt for many innovative beverages beyond the timeworn choices of a few non-alcoholic beers, seltzer water, conventional soda or juice as the only alcohol-free options.
While still representing only 1% of the overall alcoholic beverage market, such robust growth in the popularity of NA beverages inspired the formation of a new trade association, dryly named the Adult Non-Alcoholic Beverage Association (ANBA), launched in 2021 and based in Washington, D.C. Together with New Hope Network, in September 2023 ANBA sponsored a pavilion at Natural Products Expo East devoted to brands specializing in NA adult beverages including sparkling wine, canned cocktails and IPAs.
Gen Z Drives Reduced Alcohol Consumption
America’s younger Gen Z demographic is leading the way in reducing alcohol consumption. The share of adults aged 18 to 34 who say they drink dropped 10%, from 72% in 2001-03 to 62% in 2021-23, according to a Gallup poll published in August 2023.
“Younger adults are drinking less alcohol — and it has been moving in that direction for two decades,” said Akhil Anand, M.D., of the Cleveland Clinic. There are a lot of theories as to why, including increased mental health awareness, healthier lifestyles, education and possibly increased cannabis use, though binge drinking is still a concern among younger adults, Anand noted. “When people give up drinking, even for a month, they often note that they feel better,” Dr. Anand said. “That’s not by coincidence.”
Yet, the majority of people who buy non-alcoholic beverages actually do drink, Marcos Salazar, CEO of the Adult Non-Alcoholic Beverage Association, shared with New Hope Network. According to Salazar, recent data revealed that 94% of non-alcoholic beverage consumers do drink alcohol. They purchase alcohol-free products because they embrace moderation, or they appreciate the products’ flavors or, when they entertain, some guests don’t drink, or all three, he said.
For Laura Taylor, founder of Mingle Mocktails, one of the fastest-growing brands in the NA sector, her challenge was how to feel included at social gatherings while choosing not to drink. Taylor quit drinking nearly 10 years ago after a battle with alcoholism, she shared with Forbes in November 2023. Experimenting with juices and mixers, Taylor in 2017 created a line of sparkling mocktails targeted toward women, available in ready-to-drink cans and bottles. “I wanted everyone to feel included and proud of their choice to give up alcohol instead of feeling like it was something to hide,” Taylor told Forbes. “Mingle Mocktails were created for anyone who chooses to give up alcohol for a night, a week or as a lifestyle choice but still wants to feel part of the party.”
“As consumers’ beverage preferences change, functional benefits and exceptional product quality are more important than ever,” said Alex French, co-founder and CEO at Bizzy Cold Brew. “At Bizzy, we’re strategically positioned to meet evolving beverage trends quickly while remaining true to our brand promise of caffeine strength.”
“We’re hearing it daily — ‘I quit drinking, and instead I reach for a Sati.’ It’s what we want to hear; we are a replacement for alcohol,” said David McLaughlin, founder of Sati Soda, maker of certified organic beverages containing functional ingredients such as ashwaganda and rhodiola, as well as a line of CBD-infused sparkling beverages. “We are seeing athletes, celebrities, musicians and other influencers opting for non-alcoholic alternatives. They’re saying, ‘I’m treating myself better and you don’t have to drink to be cool. Now I can drink something and feel good, and wake up feeling great.’ While functional beverages are still in their infancy (even though there are a lot of us in the space!), I don’t see this trend going back. Dry January is spilling into the rest of the year, is what’s happening,” McLaughlin observed.
Where to Merchandise NA Beverages?
For retailers, where to locate category-crossing NA beverages can present some challenges. Many merchandisers place NA beverages in the grocery section near sodas, waters and functional beverages, as well as in refrigerated cases, as opposed to the alcoholic beverages section, so shoppers who don’t drink alcohol will feel more comfortable. Grocers also worry that shoppers in the alcohol section might accidentally buy non-alcoholic products and be disappointed.
“There was some confusion about where we should place products in stores,” Beth Johnson told Douglas Brown at New Hope Network. Johnson is the senior category manager at PCC Community Markets in Seattle. As people were emerging from the pandemic, she decided to create a separate non-alcoholic set. “It’s working for us. At first, it was just one shelf, but now it’s like three,” she added.
For food service, restaurants, bars, hotels and event producers, “the profit potential of mocktails cannot be underestimated,” according to Shivani Vora, contributor to Forbes. “While the cost of ingredients for alcoholic cocktails can be high, mocktails are typically made with less expensive components, meaning higher profit margins for every mocktail sold. Only adding to that profit potential is the fact that patrons are generally willing to pay a similar price for mocktails as they would for alcoholic cocktails, making them a lucrative addition to menus. … By serving mocktails, bars and restaurants can expand their customer base and increase the likelihood of repeat business from a diverse range of patrons. This approach enhances customer loyalty and patronage among those who appreciate a venue that respects their choices.”
Steven Hoffman is Managing Director of Compass Natural, providing public relations, brand marketing, social media and strategic business development services to natural, organic, sustainable and hemp/CBD products businesses. Compass Natural serves in PR and programming for NoCo Hemp Expo and Southern Hemp Expo, and Hoffman serves as Editor of the weekly Let’s Talk Hemp Newsletter, published by We Are for Better Alternatives. Contact steve@compassnaturalmarketing.com.
Is Cell Cultured Meat Safe for Humans and the Environment?
This article first appeared in Presence Marketing’s September 2023 newsletter.
By Steven Hoffman
Now that two California-based companies, Upside Foods and Good Meat, have received approval by the FDA and USDA to sell their lab-grown chicken products in restaurants before going full retail, the U.S. joins two other countries, Singapore and Israel, as the first to allow commercialization of cell cultured meat products.
What do natural channel industry members need to know about this new and controversial technology?
One thing seems certain: cell cultured meat, derived from and produced with biological materials sourced from animals, is not vegan. Few think it’s natural and many question whether it’s humane or safe for consumers to eat, at least in its present iteration. Despite being touted by such chefs as José Andrés, some experts question whether lab-grown chicken is even chicken. The ability to scale, along with potentially significant environmental impacts and production costs, are also top concerns for industry and consumers alike.
“We know that one company is using genetic engineering to create and immortalize chicken fibroblast and/or myoblast cell lines. They select for cells that they can bulk up in a suspension culture. However, growth factors used in the suspension culture may come from sera sourced from bovine, pig or other animal sources,” Michael Hansen, Ph.D., Senior Scientist with Consumer Reports, told Presence News.
“If you’re buying chicken, you need to know if it was made with bovine or pork materials. How will consumers and those that follow special diets know if it’s not labeled?” Hansen asked. “Restaurants do not have to label.”
Countering cruelty free claims made by marketers of cell cultured meat, Hansen added, “The notion that this is cruelty free? They’re using fetal bovine serum derived from slaughtered cattle. They are, in fact, using a lot of material from animals. Let me be straight up clear: they are not cruelty free.”
In addition, Hansen raised concerns about the nutritional quality of the meat produced using cell culture technology. “Nutritionally, normal cholesterol levels in ground chicken average 45.4 mg/dL. However, cholesterol levels were reported five to 10 times higher in lab-grown, cell cultured chicken products,” he pointed out.
Safety, too, is a major point of concern for Hansen, who has been sharing his scientific expertise with Consumer Reports for more than 20 years. “People haven’t eaten these kinds of things before. We don’t know the downside and there have been no adequate health or safety studies conducted, to date.”
Josh Tetrick, CEO of Eat Just and Cofounder of Good Meat, feels differently about the safety of his cell cultured chicken product.
“So how do we do it?” Tetrick explained in an April 2022 interview with The Venture podcast. “We start with a cell. And we can get that cell from an egg, from a fresh piece of meat, or from a biopsy of an animal, so we don’t need billions of farmed animals anymore. Then we identify nutrients to feed the cell, since we need our own version of feed. And it’s not that different. It’s amino acids, vitamins, and minerals—stuff that enables our cell to grow. And then we scale up and manufacture it in a stainless-steel vessel called a bioreactor that looks like something you’d see in a microbrewery.
“And that’s how we make meat. That’s the process we used to make meat that’s served in Singapore today. That’s the process that we’ll be using as we build out larger facilities in North America, Singapore, and elsewhere. It’s cleaner, so there is little to no risk of salmonella, E. coli, fecal contamination, or other zoonotic diseases. Ultimately, we think it will be more efficient. The goal is to get below the cost of conventionally produced chicken,” Tetrick told The Venture.
“Because as proud as I am about launching with a handful of restaurants, that’s not the point. The point is to get to a world where the vast majority of meat consumed doesn’t require the need to slaughter an animal, cut down a tree, use antibiotics, or accelerate zoonotic disease. We’ve got to get to that world. And we’re only going to get to that world when we figure out a way to manufacture at scale. And we’re only going to get to scale when we figure out how to engineer this unprecedented bioreactor. And that’s why we’re putting so much energy into figuring it out,” Tetrick added.
“Yes, but what’s in the feed stock for the nutrient medium in which such products are grown?” natural products industry veteran and retail specialist Errol Schweizer asked.
“Billions of dollars of speculative investment have flowed into this space. The volumes of cell cultured meat needed to turn a profit for investors will necessitate millions of pounds or gallons of nutrient mix annually,” Schweizer said. “Will the feed stock be derived from cheap, plentiful but chemical-laden by-products of GMO agriculture, particularly soy and corn?
“And what are the environmental and health impacts of these feedstock raw materials? The industry will need to figure out how to dispose of the biological waste as a result of this process, as well. And because a lot of companies don’t want regulatory scrutiny beyond what already exists in the food industry, it’s going to take a lot of public pressure to get stronger labeling and federal oversight measures in place,” Schweizer told Presence News.
Max Goldberg, Founder of Organic Insider, questions the environmental benefits of cell cultured meat. “This is a very risky, unproven and highly processed food technology, and research published in May from the University of California at Davis shows that cultivated meat could emit up to 25 times more carbon dioxide equivalents than conventional beef. Yet, is anyone the least bit surprised? This is the classic playbook from the GMO industry – sell the public and investors on a great story but fail to deliver on the promises. Furthermore, no one has any idea of the possible unintended side effects of consuming this novel food product,” he told Presence News.
At the end of the day, will consumers accept such products? According to an international research group led by Ashkan Pakseresht from Novia University of Applied Sciences in Finland, consumer studies indicated at least seven factors affecting consumer acceptance of culture meat products: public awareness, risk-benefit perception, ethical and environmental concerns, emotions, personal factors, product properties, and availability of meat alternatives.
“Like any new food, the ultimate success of cultured meat depends on consumer acceptance,” the researchers said. “Environmental and ethical concerns stimulate a desire to preserve the environment and encourage consumers to accept more sustainable food production systems. However, it was surprising to learn that ethical and environmental concerns prompted consumers to be willing to pay a premium price for purchasing meat substitute (e.g., plant-based substitutes), but not necessarily cultured meat. The results indicated that the environmental advantages alone do not seem to be a strong motivation to compensate for perceived risks (or disgust impulse) of this novel technology,” Pakseresht told Food Navigator.
How will these products be presented to the public? According to Food Republic, a major hurdle has been determining how to label lab-grown meat in a way that would be transparent for consumers. “After a long process that has included debate and public feedback, the USDA has ruled that the lab-grown chicken will be labeled “cell-cultivated,” the magazine reported in June 2023.
“The USDA’s approval of our label marks a major step forward towards our goal of creating a more humane and sustainable food system,” said Dr. Uma Valeti, CEO and Founder of Upside Foods, in a press release about the decision.
At the end of the day, will grocers, distributors and others dedicated to the healthy lifestyles market and the natural retail channel be willing to sell cell cultured meat? As Bill Weiland, Co-founder of Presence Marketing, puts it, “We prefer to sell plant-based meat, not meat made in a plant.”
Steven Hoffman is Managing Director of Compass Natural, providing public relations, brand marketing, social media, and strategic business development services to natural, organic, sustainable and hemp/CBD products businesses. Compass Natural serves in PR and programming for NoCo Hemp Expo and Southern Hemp Expo, and Hoffman serves as Editor of the weekly Let’s Talk Hemp Newsletter, published by We Are for Better Alternatives. Contact steve@compassnaturalmarketing.com.
AI Leads Tech Transformation in Natural Foods
This article first appeared in Presence Marketing’s August 2023 newsletter.
By Steven Hoffman
While 2023 may not be the year the singularity took place, with the launch of the first user-friendly artificial intelligence (AI) chat bot, ChatGPT, it could well go down in history as the Year of AI.*
From regenerative organic agriculture and nutrition research to product development, marketing, distribution and retail operations, business leaders in the natural channel are already finding multiple uses for this nascent yet transformative technology. A growing number of natural and organic products companies are taking the lead in employing AI automation, and such uses across the supply chain are growing as exponentially as the technology upon which it is based.
For the grocery industry, AI is projected to generate $113 billion in operational efficiency and new revenue by 2025. In a June 2023 study by data analytics firm Grocery Doppio, conducted in partnership with FMI – The Food Industry Association, and based on interviews with 152 grocery executives, implementation of artificial intelligence in supermarkets is expected to grow by 400% by the end of 2024. In addition AI “could eliminate 18% of store associate positions, 73% of store tasks and 53% of shopper queries,” reported Winsight Grocery Business.
AI adoption will deliver $113 billion in operational efficiency and new revenue opportunities for the grocery industry by 2025. Source: The Times They Are A-Changing: Impact of AI in Grocery. Source: Grocery Doppio
According to Grocery Doppio’s findings, inventory management savings could account for more than half of the estimated $113 billion in value. AI also will help grocers save billions in merchandising costs through advancements in product assortment and pricing optimization. Other savings include marketing, store operation costs, and IT technology.
While AI is not necessarily a new area for the grocery industry, grocers are focusing more on the “responsible, ethical use” of artificial intelligence,” said Mark Baum of FMI in a July 13th, 2023, Grocery Dive report. One quarter of retailers and more than a third of suppliers are using artificial intelligence (AI) to track product preferences and spending to anticipate consumer wants and needs, according to FMI’s 74th annual survey, The Food Retailing Industry Speaks 2023. “Every CEO needs to at least think like a CIO, if not act like a CIO, going forward. We’d like to say these days if you’re not technology enabled, you’re competitively disadvantaged,” Baum said.
Yet, a major concern among grocery and other workers is that AI could automate or partially automate up to 300 million jobs over the next decade, according to a study by Goldman Sachs. The industries most impacted by AI-driven automation will be “office and administrative support” and “legal.” However, according to Goldman Sach’s findings, “Once AI is implemented, workers will be more productive leading to an overall increase in output. This could lead to a 7% increase in annual GDP, equivalent to an astounding $7 trillion.”
Read on to learn how some early adopters in the natural and organic products industry are making innovative use of AI technology.
Research and Product Development
Dietary supplement companies have been utilizing AI to speed up the research of nutritional compounds. Companies like Brightseed employ machine learning to develop bio-active phytonutrient compounds to support gut health. Supplement maker Nuritas, recipient of Nutrition Business Journal’s 2023 Science and Innovation Award, employs artificial intelligence to identify “novel health-benefitting ingredients” and “the best plant-sourced, cell-signaling peptides,” said Nuritas founder Nora Khaldi.
In a July 2023 podcast, The Natural List, Aadit Patel, VP of Product Engineering at NotCo, a plant-based food technology company, shared how it uses AI and “the right balance of technology and humanity” to bring novel plant-based meat and dairy alternatives to market.
In related news, researchers at Northeastern University have developed an AI algorithm, FoodProX, that can predict the level of processing in food products and if a food has been “ultra-processed.” Such information is important for researchers in examining the health impacts of processed foods, Neuroscience News reported in June 2023.
Marketing
In an in-depth interview in Strategy Magazine, Arjan Stephens, President of leading organic food manufacturer Nature’s Path, shared that AI helps the company deal with inflation and competition by creating more targeted messaging in a quicker timeframe.
“The aim is to educate consumers on our commitment to fueling healthy communities as well as the inherent value of supporting and investing in a triple bottom line business like ours. A.I. has been a huge part of driving efficiencies in getting more strategic content to market more quickly. It not only enables us to swiftly create and distribute content, but to also respond more efficiently to consumer feedback and shopping behavior changes. This will continue to be critical to competing in a market that is oversaturated in greenwashing and misinformation,” Stephens said.
Distribution
Distributors, in particular, are looking to AI – and even AI-powered robots – to optimize supply chain and transportation logistics. Leading natural foods distributor UNFI in June 2023 announced a partnership with Finnish firm RELEX Solutions. Driven by AI and machine learning, RELEX will work with UNFI to consolidate and replace multiple UNFI buying systems into “one enhanced process, combining a more robust analysis of demand with a more granular approach to procurement,” UNFI said in a statement.
UNFI’s new AI platform is expected to become operational over the next 12 to 18 months. “As part of UNFI’s multi-faceted transformation agenda, we’re continuing to implement cutting-edge technology to improve the customer and supplier experience, while increasing operating efficiency,” said Erin Horvath, Chief Operating Officer at UNFI. In March 2023, UNFI announced that it would utilize robots powered by artificial intelligence and software automation and new scanning technology at its distribution center in Centralia, Washington.
Grocery wholesale cooperative Associated Food Stores (AFS) also plans to deploy robotics and AI-powered automation technology at is distribution center in Farr West, Utah, according to a May 9th, 2023, report in Winsight Grocery Business. Working with technology company Symbotic, AFS’s end-to-end automation system will include robotic case-pick capabilities “to enhance a range of retail-facing experiences,” including supply, expanded assortment and product delivery to stores.
Seeking to disrupt the traditional natural products distribution sector, Pod Foods claims it offers the first truly “infinite” warehouse for food procurement in the industry while providing retailers with data-driven, relevant access. The engine is powered by the company’s “Pod Bytes” data platform, which synthesizes data from its B2B marketplace, economic indicators, and other grocery-adjacent and third-party sources, the company said. The built-for-grocery models provide retailers with personalized, AI-enabled insights across all areas of discovery, including product placement, procurement, inventory optimization and market opportunity. The result is access to an endless yet personalized assortment of products, targeted to each retailer based on consumer purchasing behavior, desired retail margins, local trends, and more, the company says. Pod Foods in April 2023 appointed former VP executive and CPG veteran Michael Schall as President.
Retail
At The Fresh Market, which operates 160 stores in 22 states, longtime marketing partner Firework is implementing a patent-pending artificial intelligence platform to enhance The Fresh Market’s video content for consumers. The technology will allow shoppers to ask questions and receive sophisticated, real-time answers in The Fresh Market’s in-video chat feature. Viewers will be able to ask such questions as, “What is the recipe for the salad being made in this video?” and the AI chatbot will list the ingredients.
“The new AI engine makes use of a large language model (LLM), can understand and respond in a wide range of languages, and can be customized to reflect each brand’s unique voice,” The Fresh Market said in a statement. The new technology will be available on The Fresh Market’s website and its shoppable video live commerce retail media network. “Our customers are looking to engage with our brand in real time, both online and in store. With Firework’s generative AI technology, we can be certain that customers will receive prompt, friendly and personalized support whenever they choose to engage with our video commerce content,” said Kevin Miller, CMO at The Fresh Market.
Shoppers at Sprouts Farmers Market can now use an AI-based shopping assistant called Quin. The phone-based app from New York-based developer Verneek can answer spoken or typed questions about items sold in the stores and provide information about recipes, keto-friendly options, nutritional value and more. “As technology continues to evolve, Sprouts is always exploring new and innovative ways to improve our customer experience while providing joy in healthy living,” Sprouts said in a statement. Nasrin Mostafazadeh, Cofounder of Quin, said in ArcaMarx Magazine in April 2023 that the timing was right to launch Quin in grocery stores. However, he noted, Quin is not intended to replace grocery workers but to supplement them, giving them more time to focus on their job responsibilities, such as stocking shelves, doing inventory or checking out customers.
On THRIVE Market’s blog, the online retailer helps customers evaluate the best AI recipe generators. “There are now lots of websites that use AI machine learning to populate recipes based on ingredients, dietary restrictions, and even cooking skill level,” wrote THRIVE blogger Amy Roberts. “Some create a recipe based on ingredients you have on hand, while others churn out a recipe based on a query, like ‘Make a gluten-free chicken parmesan.’” Roberts reviewed ChatGPT for a vegan cheesecake recipe, Let’s Foodie for a red cabbage slaw, and PlantJammer for lasagna. “Did it work?” Roberts asked. “Surprisingly yes! The cheesecakes were a hit!” Though, Roberts admits she continues to refer to Pinterest for her own recipe ideas.
Using an organic food store as an example, AI platform Business Name Generator cites the following case study: “Consider the case of a budding entrepreneur, John, who planned to start an organic food store. He wanted a name that conveyed freshness, health, and sustainability. After struggling with brainstorming sessions, he turned to an online business name generator. He entered keywords such as ‘organic,’ ‘fresh,’ ‘healthy’ and ‘green.’ In seconds, the tool provided him with a list of potential names like ‘Freshly Organic,’ ‘Green Harvest,’ “Healthful Bounty’ and ‘SustainaBite.’ John was able to choose a unique and meaningful name for his store.”
Agriculture
For regenerative and organic farmers, AI technologies including machine learning and data analytics are being used to develop sophisticated monitoring systems that can provide farmers with real-time information about factors that affect soil health, including nutrient deficiencies and moisture levels. Combined with the use of sensors, drones and satellite imagery, AI algorithms are being used to analyze massive amounts of data to determine the optimal amount of water needed for each crop, reducing water waste, and ensuring that plants receive necessary nutrients for healthy growth. This not only conserves water resources but also helps to prevent soil degradation caused by overwatering, reported Marcin Frackiewicz in TS2 in May 2023.
At the University of California Davis, the AI Institute for Next Generation Food Systems (AIFS), funded in part by USDA, was launched in 2020 with a mission of meeting growing demand in the food supply by increasing efficiencies using AI and “bioinformatics” spanning the entire system from seed to shelf. Bringing more than 40 researchers together, AIFS says it aims to “bring artificial intelligence technology to the entire food system from crop breeding and farming to food production and nutrition. The institute will combine the development of the latest breakthroughs in artificial intelligence with preparing the food and agriculture industries to rapidly adopt them and ready the workforce.”
In addition, leading technology companies including IBM, Microsoft, Intel and others are focusing on developing artificial intelligence for use in agriculture and food production. Microsoft’s Project FarmVibes seeks to foster sustainable agriculture by collecting and analyzing data in from drones, sensors and other equipment to help farmers make real-time decisions about their crops. Intel and the National Science Foundation in 2022 invested $220 million in a number of AI ventures, including research in AI-Driven Innovation in Agriculture and Food Systems. Focusing on regenerative agriculture, IBM in 2022 launched IBM Regenerative Agriculture, which uses AI, data analytics, cloud technology and predictive insights to interpret agricultural and weather data and help farmers make decisions about crops.
“The food chain is a complex ecosystem that touches our everyday lives, and this is where AI has an advantage – by navigating the complex web of information, from farming to food distribution,” said Bryton Shang, CEO of Aquabyte in Forbes in July 2023. “It can help ensure higher-quality decision-making every step of the way.”
* Written and researched by a real human, with 40+ years’ experience in natural and organic foods and sustainable agriculture.
Steven Hoffman is Managing Director of Compass Natural, providing public relations, brand marketing, social media, and strategic business development services to natural, organic, sustainable and hemp/CBD products businesses. Compass Natural serves in PR and programming for NoCo Hemp Expo and Southern Hemp Expo, and Hoffman serves as Editor of the weekly Let’s Talk Hemp Newsletter, published by We are for Better Alternatives. Contact steve@compassnaturalmarketing.com.
Naturally Network Mid-Year Update: Natural Products Outpacing Growth of the Overall Marketplace
This article first appeared in Presence Marketing’s July 2023 newsletter.
By Steven Hoffman
There are “some key areas where natural continues to be really important and shoppers are continuing to engage despite inflation where they're saying, ‘Natural's important to me and I will continue to spend a little bit of extra money despite price.’” – Jessica Maniscalco, SPINS
Addressing the ongoing theme of inflation, Jessica Maniscalco, Senior Retail Insights Manager of market intelligence firm SPINS, said, “While the impact is still present in natural and specialty accounts, it’s being felt at a lesser rate than in conventional channels.”
Speaking at a recently held mid-year industry trends update webinar hosted by Naturally Network, Maniscalco shared that the drug, convenience and natural channels have seen lower price increases, “which lowers the growth rate compared to the conventional channel,” where price increases have been higher.
Source: SPINS
According to multi-year data tracking by SPINS, Maniscalco said that over time, “overall dollars have continued to grow across all positioning groups while units have been negatively impacted, especially with conventional products, which holds the lion’s share of sales.” Thus, while inflation is impacting overall unit growth everywhere, conventional products are being the most impacted.
“We all know what was going on with eggs most recently and how high the prices have gotten in terms of base price over the past year. So things like eggs, cereal, and bars were among the highest to increase their price. But what you'll notice that during this same time period is that natural and organic products within these same categories have held their prices at a much lower rate than the overall total category during the same time,” Maniscalco said.
Top Natural Categories Show Resilience
Maniscalco noted the top fastest growing categories for natural products, including infant formulas, creamers, salsa and dips, jerky and meat snacks, refrigerated entrees and a few others, are experiencing “exponential growth” versus overall category performance. She also pointed out that there are “…some key areas where natural continues to be really important and shoppers are continuing to engage despite inflation where they're saying, ‘Natural's important to me and I will continue to spend a little bit of extra money despite price.’”
In analyzing the composition of conventional, specialty wellness and natural products sales in brick & mortar retail over the past year, Maniscalco reported that specialty wellness products comprised about 15% of overall product sales. “But when it comes to dollar sales growth, it's lagging while contributing to only 10% of that overall bump. So, this is saying that specialty wellness sales are going up or the dollars are going up, but the price is holding at a lower rate than the conventional and natural products in these channels, so contributing less to the overall growth.”
Maniscalco also reported that, outside of grocery, pet care products and alcoholic beverages also continue to experience significant growth in the natural channel, and advised retailers to be aware of such attributes as “organic,” whose prices have held steadier over time compared to their conventional counterparts.
Source: SPINS
The Rise of the Values Oriented Shopper
In addition, Maniscalco shared data regarding the impact of the values-oriented shopper. “Value oriented has to do with people that are associating certain values or keeping those top of mind when they they're shopping at a store and engaging with products. And almost 50% of shoppers are considered value oriented and they shop differently. Almost 90% of them shop at least once a week, which is 1.2 times a more than the average shopper. So, they're a very valuable customer. When asked what was most important to them when they are going about their everyday shopping or look for new products, is they were really prioritizing ‘good for the planet’ attributes very highly” Maniscalco said.
With such a focus on sustainability, “shoppers are looking more and more now at not only what's good for you health-wise, but how the impact can really go further and whether it's good for the planet, good for animals, etc.,” she noted.
“The other thing that value oriented shoppers are looking for more and more now is functionality, and functional ingredients have been on the rise for several years now. But, it's great to see that it's no longer limited to just the vitamin section or beverages or bars, but really across all aisles we're seeing some type of integration with availability, and shoppers are really looking to get more bang for their buck now,” Maniscalco added. “We know that adaptogens in the form of mushrooms have been seeing huge gains in acceptance, especially since COVID, and they are being integrated in many ways across the store.”
The values oriented shopper “is a very valuable customer. When asked what was most important to them when they are going about their everyday shopping or to look for new products is they were really prioritizing good-for-the-planet attributes very highly. The key takeaway here is how important this shopper is,” Maniscalco emphasized.
SPINS will be releasing a full report later this summer.
Source: SPINS
Steven Hoffman is Managing Director of Compass Natural, providing public relations, brand marketing, social media and strategic business development services to natural, organic, sustainable and hemp/CBD products businesses. Compass Natural serves in PR and programming for NoCo Hemp Expo and Southern Hemp Expo, and Hoffman serves as Editor of the weekly Let’s Talk Hemp Newsletter, published by We Are for Better Alternatives. Contact steve@compassnaturalmarketing.com.
Natural & Organic Industry Set to Surpass $300 Billion in Sales in 2023, Despite Slower Growth, Inflation
This article first appeared in Presence Marketing’s May 2023 newsletter.
By Steven Hoffman
The U.S. natural and organic products industry is on pace to surpass $300 billion in total industry sales in 2023, despite slower growth and inflation, according to early estimates by Nutrition Business Journal.
Presenting the data at Natural Products Expo West in March, New Hope Network SVP and Market Leader Carlotta Mast said, “This would represent a doubling of industry sales over the last decade. That’s huge. We are a sizeable, impactful, meaningful industry. We’re not a fad anymore. We’re not this niche industry.”
Photo: Unsplash
U.S. consumer sales of natural and organic products reached $278 billion in 2022, with growth slowing from 7% in 2021 to 5.4% in 2022, according to preliminary research by Nutrition Business Journal, based on data provided by market research firm SPINS. This follows an unprecedented spike of 10% growth in 2020, as a result of the pandemic. Sales growth is expected to recover somewhat going forward, according to Mast, and is projected to reach 6% in 2024 and 2025.
The bulk of the growth in 2022 was driven by natural, organic and functional food and beverage sales, led by carbonated drinks, dairy alternatives, “better-for-you” sweeteners, baby products and canned and dried soups. These categories outperformed the overall natural and organic products industry, Mast noted. In functional foods and beverages, sports and energy drinks, soft drinks, frozen desserts and snack chips that include functional ingredients such as mushrooms, adaptogens, electrolytes, prebiotics and healthy fats helped drive sales in the category.
Hitting a milestone in 2022, as well, were sales of organic food and beverage products, with sales estimated at more than $50 billion. According to Mast, this figure represents a doubling in organic food and beverage sales since 2014. Product categories that performed strongly in the organic sector last year included organic baby formula, candy, dips, soft drinks and yogurt, according to New Hope and SPINS data.
However, after seeing record growth in 2020, most impacted by inflationary pressures was the dietary supplements category, which rose only 1.7% in 2022 to $60.9 billion in sales, based on the data presented at Expo West and reported on by Food Navigator-USA.
Kathryn Peters, Chief of Staff at SPINS, shared with attendees at Expo West that natural and organic foods are continuing to expand into the mainstream, with sales of natural products in conventional grocery and convenience outpacing growth in traditional natural food stores. Growth in sales of natural products in 2022 increased 9.2% in convenience, followed by a 7.4% increase in “conventional multi-outlet,” and a 4.1% increase in regional grocery, compared to 2.5% growth in the natural channel, based on SPINS data and reported by Food Navigator-USA.
While shoppers continue to look for deals and best prices across multiple channels including supermarkets, mass retailers, club stores and online to help reduce the impact of higher food prices, according to The Hartman Group and FMI — The Food Industry Association, 32% of shoppers concerned about rising food prices reported buying fewer items as a strategy to save money in February 2023. That’s down from 41% of shoppers who reported buying fewer items to save on food costs in October 2022.
“Our national survey reveals persistent consumer concern about food and beverage prices, as the weekly spend for groceries increased in late 2022 and early in 2023,” Leslie G. Sarasin, president and CEO of FMI, said in a statement. “To address higher prices, shoppers are visiting more stores and seeking deals to stretch their dollars but are now less likely to cut back on the number of items purchased compared to six months or a year ago. This is an opportunity for our industry to continue connecting with shoppers on food-inflation-mitigating solutions.”
According to FMI and The Hartman Group’s findings, food price concerns cut across shopper demographics, however, “Boomers are more worried about rising food prices than any other group, with 80% showing concern in February 2023 versus 69% in October 2022. Millennials polled close behind with 76% saying they are concerned, 5% more than one year ago. Such concerns about food costs coincide with an increase in spending in this inflationary environment. In February, on average, consumers spent $164 per week on groceries, up from $148 in both October and February of 2022,” FMI said.
Natural and organic food shoppers, in particular, may be less sensitive to price than traditional shoppers, but they still want quality, taste, nutrition, value … and sustainability. Younger consumers are driving demand toward brands that reduce waste and minimize carbon footprint and environmental impact. “The values-oriented shopper is a really important and valuable shopper,” Peters of SPINS noted, and according to Nutrition Business Journal, organic products are one of the last places consumers say they are willing to trade down to fight food inflation.
In a Chicago Tribune feature article published on April 3, 2023, Tonya Lofgren, Marketing Manager of Ciranda, a leading organic ingredient supplier based in Hudson, WI, said, “What’s cool about the natural and organic shopper is that if they value that, they’ll prioritize it over other ways to adjust spending because they realize how important it is.” Ciranda CEO Doug Audette added, “We are seeing consumers rationalizing their spending decisions. Overall, that has tempered the growth in organic. But we see no letting up in the long-term growth of organic, sustainable and fair-trade ingredients.”
In a March 2023 organic market report, USDA reported that, after a surge in pantry stocking pushed sales to record heights in 2020, organic food sales declined for the first time in decades in 2021 on an inflation-adjusted basis. However, “more than 15 million new customers entered the organic and natural foods market between early March and mid-April 2020,” USDA said. Time will tell if these consumers stick with organic.
According to USDA’s market report, organic consumers are diverse in terms of race, ethnicity, education, and income, though millennials purchase organic food at larger rates than other generations. Households with children are also more likely to purchase organic food than households without children, USDA noted.
Yet, challenging new and dedicated organic consumers alike is the fact that organic foods are seeing some of the steepest price hikes amid stubbornly high food inflation. Prices for organic fruit and vegetables rose 13.1% over the past year, compared with just under 10% for conventional produce, according to a February 2023 analysis of USDA retail pricing data by Lending Tree.
Among all the food groups included in Lending Tree’s analysis, organic chicken prices increased the most, at 19.5%. “That's more than three times the price jump for conventionally raised chicken, which rose 5.9% over the last year, the report shows. For households already struggling with the nation's worst bout of inflation in 40 years, such spikes could force many consumers to opt for nonorganic options instead,” CBS News reported.
Sales data for 2022 show organic fruits and vegetables growing in revenue but declining in sale volume, according to the Organic Produce Network. However, that’s a common theme across the food industry as consumers pay more for less in the face of heavy inflation, the Chicago Tribune noted.
According to the Tribune, a quarter of consumers surveyed by Nutrition Business Journal over the past year said they’re unlikely to stop buying organic produce, packaged food and meat to save money on groceries. Fewer than half of respondents said they are likely to cut those products out.
Steven Hoffman is Managing Director of Compass Natural, providing public relations, brand marketing, social media, and strategic business development services to natural, organic, sustainable and hemp/CBD products businesses. Compass Natural serves in PR and programming for NoCo Hemp Expo and Southern Hemp Expo, and Hoffman serves as Editor of the weekly Let’s Talk Hemp Newsletter, published by We Are for Better Alternatives. Contact steve@compassnaturalmarketing.com.
U.S. Hemp Leaders Unite on Plan of Action as 2023 Farm Bill Deliberations Approach
FOR IMMEDIATE RELEASE
Key industry stakeholders convened at the NoCo9 Hemp Expo in March to finalize a policy document that 31 nonprofits have now signed.
WASHINGTON, D.C. (April 24, 2023) – As the 2023 Farm Bill deliberations approach, U.S. hemp leaders are united behind a plan of action. And this unprecedented alliance among 31 nonprofit hemp organizations portends promise for congressional enactment of the industry’s agenda.
This winter, three of the nation’s leading hemp organizations – Hemp Industries Association (HIA), National Industrial Hemp Council (NIHC) and U.S. Hemp Roundtable (USHR) – joined in collaboration for the very first time to develop a series of policy priorities for enactment in the 2023 Farm Bill. The three groups then asked industry leader Morris Beegle to convene a meeting of more than 75 key hemp stakeholders at the leading national hemp gathering that he produces, the NoCo Hemp Expo. After an intense discussion, and follow-up breakout groups to expound on the deliberations, a priority policy document was finalized. Since then, 31 state, regional and national nonprofit organizations have signed on in support.
The document, attached hereto, lists nine key policy priorities for consideration by Congress. These include requiring FDA to regulate hemp extracts such as CBD; easing the regulatory burden on hemp farmers; repealing the hemp felon ban from the 2018 Farm Bill; and addressing THC limits for hemp. This document is being shared with key members of Congress and will serve as the foundation for drafting legislative language to be included in the Farm Bill.
NIHC President and CEO Patrick Atagi praised the work of the hemp industry for broadly coming together to endorse hemp priorities and hemp-specific Farm Bill priorities. “’Working Together Works’ are true words taught to me by my mentor, former USDA Undersecretary William ‘Bill’ Hawks,” Atagi said. “I am glad to see the hemp industry come together; it is a sign of great things to come.”
“This is an historic moment for hemp,” stated Jonathan Miller, USHR’s General Counsel. “The five years since legalization have been challenging, and the 2023 Farm Bill is our next and best opportunity to take this industry a step forward. The unity within the industry is remarkable and telling: Our shared voice will resonate with Congress and help us turn this opportunity into meaningful progress for hemp farmers and product consumers.”
Said Morris Beegle, co-founder and president of We Are For Better Alternatives, or WAFBA: “The last five years have taught us a lot, and more than anything, that we as stakeholders need to align our interests and our voices going into the 2023 Farm Bill so that we correct the regulatory deficiencies that have plagued the growth and development of this nascent industry. I’m optimistic and encouraged by so many organizations coming together at this time to collaborate and work in unison to improve the future of the hemp industry.”
Contact
Morris Beegle, WAFBA, info@nocohempexpo.com
Steven Hoffman, Compass Natural, steve@compassnaturalmarketing.com, tel 303.807.1042
WAFBA Announces a Pause for 2023 Southern Hemp Expo in Nashville
SHE became dominated by Delta-8 and other intoxicating hemp-derived cannabinoids popular in areas where adult-use cannabis is not legal.
LOVELAND, Colo. (April 18, 2023) -- WAFBA -- We Are For Better Alternatives, the umbrella organization that hosts and produces NoCo Hemp Expo, Southern Hemp Expo, Hawaii Hemp Conference, Winter Hemp Summit and other hemp-centric conferences, trade shows and events -- is going to pause the 2023 Southern Hemp Expo. The Southern Hemp Expo, aka SHE, launched in 2018 in Nashville as the sister show to NoCo Hemp Expo, the most comprehensive hemp exposition and trade show on the planet.
SHE was a highly successful event in both 2018 and 2019 but was canceled in 2020 due to the Covid pandemic. SHE moved to Raleigh, North Carolina, in 2021 and back to Nashville in 2022. Both shows struggled to regain the momentum that the hemp industry had prior to the pandemic and both shows ended up being dominated by the rise in the intoxicating hemp-derived cannabinoid category, including Delta-8, HHC and other derivatives that have come to be popular with the consumer market in areas of the United States where adult-use cannabis is not yet legal.
Hemp for Health and Wellness
Both NoCo Hemp Expo and Southern Hemp Expo were founded on the decades-long mission and mantra that hemp is for health and wellness for humans and animals and an environmental benefactor for the planet in being able to produce eco-friendly, carbon-neutral to carbon-negative materials for a variety of industrial applications. These include commercial and residential construction products, textiles, automotive components, paper and packaging, bioplastics and biocomposites, animal bedding, biochar and more.
Another long-standing mantra for the hemp industry has been “hemp does not get you high,” which was the case until the domestic oversupply of CBD biomass increased significantly in 2019 and 2020. Additionally, the FDA continued to skirt its regulatory responsibilities given to the agency by Congress in the 2018 Farm Bill to regulate the burgeoning and popular CBD market. The lack of regulatory oversight kept major retailers and major consumer brands on the sidelines as well as investment money out of the industry. This in turn was a factor in the increased oversupply and the eventual development of the synthesized, hemp-derived cannabinoid market that is proliferating today. This market has opened up a variety of concerns, from consumer safety issues to state product bans as well as state legislation approving of these products, and other various regulatory murkiness around the country. To put it simply, it's a mess and extremely complicated to navigate in this new category of the hemp industry. To be clear, WAFBA, Southern Hemp Expo and its management are not in favor of "banning" or making "illegal" this new category of hemp-derived products. This category of products needs federal regulation, which we hope will occur in the upcoming 2023 Farm Bill.
Focus on Flagship Event
With the above-mentioned confusion, complexity and the state of intoxicating hemp-derived cannabinoids, WAFBA has made the decision to focus its trade show and event energy on its flagship event, NoCo Hemp Expo, and to do everything we can to build this event as the international hub and gathering spot of hemp-based heath, wellness, nutrition, environmental, and socially impactful opportunities that can benefit humanity and the planet.
For additional information and to keep abreast of future activities and events, we encourage the industry and interested parties to subscribe to our newsletter and visit our media platform at www.letstalkhemp.com.
Contact
Morris Beegle, WAFBA, info@nocohempexpo.com
Steven Hoffman, Compass Natural, steve@compassnaturalmarketing.com, tel 303.807.1042
NoCo9 Hemp Pitch and WAFBA Award Winners Exemplify Innovation, Dedication in the Hemp Industry
FOR IMMEDIATE RELEASE
The ninth annual NoCo Hemp Expo, held March 29-31 in Colorado Springs, featured an awards ceremony and pitch slam.
LOVELAND, CO (April 11, 2023) – This year’s WAFBA Awards of Excellence were presented during a lively welcome reception to kick off the NoCo9 Hemp Expo at The Broadmoor Resort in Colorado Springs. Winners were announced to cheers and applause as industry participants gathered to celebrate the growth of the industry and its dedicated pioneers.
“I’m so glad to see everyone gathered again in the spirit of optimism and growth,” said Morris Beegle, producer of NoCo9 Hemp Expo and president of WAFBA, who presented many of the awards. “It’s great to see so many advances in the industry since last year.”
WAFBA Awards 2023:
Elevation Award (Advancing the Industry Through Impeccable Leadership)
Melissa Nelson
Someone who drives the industry forward by breaking down barriers, thus paving the way for others. They are an advocate who focuses on developing others while being committed to their own personal development. Their impact goes beyond the industry. Their values led them to influence positive change for marginalized, medically challenged or under-resourced individuals, communities and nonprofits.
2022 recipient: Carla Boyd
Community Economic Impact Award
IND Hemp
Someone who has demonstrated extraordinary stewardship by positively impacting their community through job creation and opportunity, contributing to clean-up, strengthening financial stability, inclusivity and leading by example. Dedicated to educating their community and developing bonds that will further their social impact.
2022 recipient: Melissa Nelson
Mother Earth Award (Lady of Agriculture)
Anndrea Hermann
A woman whose entrepreneurial spirit has ushered a new era of business leaders through her skills and execution in agriculture. She is a visionary who has cultivated relationships through education, inclusivity and collaboration. Her determination and dedication support our farmers and contribute immensely to building the supply chain, making her a trailblazer and an inspiration to others.
2022 recipient: Winona LaDuke
Best New Tech Award/Tech Innovation
Global Fiber Processing -- Structural Hemp Block
Bast Fibre Tech -- Sero Natural Hemp Fibre
A person or group whose work is at the forefront of the industry with their game-changing technical tools for improvement and impact to further the hemp industry. Their brand has grown exponentially over the last year, whose product or services filled a gap in the market or both.
2022 recipient: Corbett Hefner and Formation Ag
Carbon Solution Award
Patrick Brown -- Hempfinity/Brown Family Farms
Acting as a change agent through their processes and efforts by creating ways to reduce carbon emissions with their own practices and/or through the products they produce. They lead the way in lowering their carbon footprint while providing direction for others to do the same in the joint effort against the carbon crisis.
2022 recipient: Sergiy “Doctor Hemphouse” Kovalenkov
Legacy Award
Chris Boucher
This award is to honor a remarkable person whose legacy has and will continue to embolden others. They are well-respected and their efforts have not gone unrecognized. Their passion for hemp has not wavered. Their perseverance remained steady through challenges they may have faced over time.
2022 recipient: Tim Shaughnessy
The Das Award/aka The Service Award
Alex White Plume
Service is what life is all about. Service doesn’t have to be big and grandiose to be meaningful and make a difference. Goodness is the only investment that never fails. As we serve others, we are working on ourselves; every act, every word, every gesture of genuine compassion naturally nourishes our own hearts as well. Our rewards in life will always be in direct ratio to our service. Small acts, when multiplied by millions of people, can transform the world.
2022 recipient: Agua Das Ellis
Hemp Pitch Winners 2023
This year’s NoCo Hemp Expo also featured the second annual NoCo Hemp Pitch, where six finalist companies vied for prizes, including legal fees and other services.
Sponsored by Michael Best, a leading law firm serving the hemp and cannabis markets, the NoCo Hemp Pitch competition gave the finalists six minutes each to pitch their brand or idea to a live audience and to judges, who included hemp industry start-up consultants, attorneys and investors.
This year’s winners:
1st place: Bee Delightful, led by Skyler Johnstone and master beekeeper Daniel Weaver, produces wildflower honey from rescue bees in Central Texas and infuses the raw honey with a carefully extracted, naturally occurring cannabidiol (CBD) from organic hemp farms in Colorado, Oregon and Kentucky.
2nd place: Pure BioPlastics, led by Ed Lehrburger out of Colorado, creates hemp fiber produced by PureHemp, which has been manufactured and sold into various markets to make first-generation hemp plastics. During the past five years, the company has developed a new technology to convert hemp stalks into 100% bioplastics (second-generation hemp plastics).
Tree Free Hemp Charity Golf Challenge
The team from Sawyer Labs/Trusted Harvest won the first annual Tree Free Hemp Charity Golf Challenge, to benefit the Realm of Caring Foundation.
2024 Hemp Expo Announced
The 10th NoCo Hemp Expo will take place next year at The Broadmoor Resort in Colorado Springs, from March 20-22, 2024. To exhibit or sponsor, click here.
First Citizens Bank, EarthX, Patagonia Led Distinguished Group of Sponsors
NoCo Hemp Expo is pleased to recognize our Sponsors, including Presenting Sponsor First Citizens Bank. “Having a leading, agriculture-focused financial institution such as First Citizens Bank, with its 100-plus-year history of serving farmers and ag-related businesses, step up and serve as Presenting Sponsor of this year’s NoCo Hemp Expo is a huge statement, providing vital credibility and legitimization for the industry at a time when it’s needed most,” said Beegle. “We’re also thrilled to welcome EarthX as our Environmental NGO partner and Patagonia as Sustainable Apparel Sponsor. Additional lead sponsors include Global Fiber Processing, Michael Best, CannaConsortium, Advanced Bio-Materials Technologies, Divita Hemp Block & Weaving Vibes. We are very excited about these categories that bring focus to areas where hemp can make a difference in sustainability and improving the environment.”
About NoCo Hemp Expo
For a decade, NoCo Hemp Expo — the world’s most comprehensive industrial hemp exposition and conference — has brought together international business and government leaders, academics, nonprofits, media and the public to collaborate on important initiatives, opportunities and solutions for the future of a crop and an industry that can have significant positive impact on human, animal and planetary health.
NoCo is produced by We Are For Better Alternatives (WAFBA), a leading organization dedicated to the advancement and advocacy of hemp farming, processing, production, innovation, education and legalization. WAFBA also is the publisher of Let’s Talk Hemp, the industry’s leading news source. Learn more about the hemp and cannabis industry and subscribe to the latest news at www.letstalkhemp.com.
Contact
Morris Beegle, WAFBA, info@nocohempexpo.com
Steven Hoffman, Compass Natural, steve@compassnaturalmarketing.com, tel 303.807.1042