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Pure Growth from Natural Products
Article

Pure Growth from Natural Products

Elfrun von Koeller, Jimmy Royston, Blaise Cote, Seth Marcus, Anubhav Goel, Andrew Henkel and Michelle Fox
Boston Consulting Group, 2019
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Editorial Rating

8

Qualities

  • Analytical
  • Applicable
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Recommendation

The Boston Consulting Group paired with SPINS, a company that analyzes consumer data, to zoom in on an emerging performer in the consumer packaged goods (CPG) industry: “natural products.” The result will be of interest to investors, manufacturers and CPG companies because consumer demand is up and shows no signs of slowing. There’s an added benefit: If your products really are as natural as consumers hope, you could help save the world while making a profit.

Summary

“Natural products” represent only 7% of sales in the consumer packaged goods (CPG) industry, but recent numbers show they’re responsible for more than 50% of growth.

From 2015 to 2019, revenue from so-called natural products increased from $51 billion to $64 billion, and between mid-2018 and mid-2019, sales growth for natural products far outperformed those of conventional products. Thanks to consumer demand, the trend shows no signs of slowing. But what is a natural product? Although no legal definition exists, SPINS, a computer data analysis company that contributed to the research, defines natural products as those that “meet SPINS’s set of proprietary criteria for ingredient quality, certifications and claims, among other factors” and those that are “marketed as, or perceived by consumers and retailers to be natural.”

Indicators suggest continued burgeoning for natural products because recent revenue growth emerges not from a new set of products or a change in prices, but from a pure swell in the number of units sold...

About the Authors

Elfrun von Koeller is managing director and partner in the Boston Consulting Group’s Denver office. Jimmy Royston and Blaise Cote work in BCG’s New York Office and Seth Marcus is a BCG Senior Knowledge Analyst in Chicago.

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