Trendspotting: Valuable health-conscious consumers are in the produce industry wheelhouse

Produce is the ultimate health food — and health food consumers are an extremely attractive demographic. This according to a recent report from dunnhumby, which revealed the rising importance of health-focused consumers in the U.S. grocery market. The key finding of the Better for You (Customer), You (Brand), and You (Retailer) report is that health-conscious shoppers represent a $285 billion annual opportunity, comprising 33 percent of the population and driving significant market trends.

Natural Grocers, Amazon Fresh and The Fresh Market emerged in the report as the leading retailers for health-conscious consumers, with 60 percent of their customers focused on health, compared to just 32 percent for the average U.S. retailer.

The report also found that 64 percent of consumers rank physical health as the most important need for them, ahead of financial health (58 percent) and mental health (55 percent). More than half of customers expect a high level of support from retailers and brands with products, services and information for these three top needs.

Key findings from the study include:

• Health-focused customers are worth $285 billion to the grocery industry every year, around 20 percent percent of the $1.7 trillion industry, and representing 33 percent of the population. Retailers who over-index to this customer segment experience a long-term grocery sales growth (five-year compound annual growth) average of 7 percent.
• Health-focused customers tend to be younger (18-44), have more children, have higher incomes ($100,000-plus), and have larger monthly grocery budgets. They also exhibit more omnichannel and loyalty behaviors than their less health-focused counterparts.
• Health-focused customers care most about quality (63 percent versus 47 percent), digital (45 percent versus 30 percent), and values (55 percent versus 31 percent) and less about price (64 percent versus 71 percent) than their less health-focused counterparts.
• The future Gen Z customer is reshaping health behaviors. Sixty-one percent of Gen Z shoppers care most about mental health, 15 points higher than those 45-54, and double that of those 75 years old and over.

“With health and wellness predicted to be the most critical trend for decades, retailers and brands have unprecedented opportunities to meet emerging customer needs.” said Matt O’Grady, president of the Americas for dunnhumby. “This groundbreaking report provides a blueprint for meeting customers’ health needs now and into the future. As the grocery landscape continues to evolve, understanding and adapting to these health-centric consumer trends will be crucial for retailers and brands aiming to remain competitive in an increasingly wellness-oriented market.”