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Abstract
Sales of "natural" foods are rising much more rapidly than any other segment of the food market.
Evidence of this leading edge of growth comes from a variety of indicators - the exponential
rise in farmers' markets, the expansion in natural foods grocery stores, consistently strong
stock market showings, and investment by venture capitalists.
Many mainstream supermarkets have joined the trend, offering an array of organic and other
natural foods. Although natural products now comprise about two percent of total food sales, the
rapid growth rate, if sustained, will quintuple its influence on the farming, processing, distributing,
and retailing food stream over the next decade.
Despite impressive growth through the 1990s, achieving the full potential of the natural foods
market is not assured. This immature market requires careful policy actions to fulfill its capacity to
help satisfy private and public objectives. While the growth in natural food sales holds obvious
rewards for the business sector, contributions to public policy objectives should not be overlooked.
Scientists and practitioners of sustainable agriculture know that economic viability is key to farming
and food systems that leave a lighter environmental footprint across the country. The spread of
such systems could contribute to important national environmental objectives; for example,
reduced water pollution. However, adoption of these alternative systems of food production has
been slow. The strong growth in consumer demand for natural foods offers an economically viable
opportunity for wider adoption.
In 771e Natural Foods Market: A National Survey of Strategies for Growth, Nessa Richman identifies
the obstacles to achieving the hill potential of this market development, and presents private and
public strategies to reduce key barriers. Prominent on the list of obstacles is the uncertainty over
standards for natural foods products, which would guide the actions of all market participants, from
farmers to consumers. Both industry and government agencies have roles in alleviating that
uncertainty.
The report's comprehensive analysis combines and interprets a diverse array of private and public
information, to help experts and novices understand this developing market. It uses the latest
information to chronicle the growth and diversity of the sector. The identification of obstacles
draws upon the findings of a new national survey of farmers, food processors, distributors, and
retailers. The responses of those already involved in natural foods are contrasted with those who
are not already involved, ill order to assess the obstacles perceived by each group. Private and public
strategies to foster durable market growth are built from the survey findings and from the
insights gained from interviews with food industry leaders.
The Henry A. Wallace Institute for Alternative Agriculture offers this report to encourage effective
actions in the private and public sectors, which will lower obstacles to growth in the natural foods
market. With the report, the Institute's Policy Studies Program undertakes a new initiative centered
on analysis of the marketing of sustainable agriculture products. We hope that this report and following
publications stimulate a dialogue within and among private and public circles, which moves
society toward a sustainable food system.