Consumer-Driven Evolution


Consumer-Driven Evolution

What was once considered a fringe industry has now become a mega money-maker – no surprise to alive readers. Drop into any drugstore or supermarket and you\’ll find energy drinks and organics where you once found cigarettes.

What was once considered a fringe industry has now become a mega money-maker—no surprise to alive readers. Drop into any drugstore or supermarket and you’ll find energy drinks and organics where you once found cigarettes.

What more evidence do we need than Wal-Mart’s determination to become a leading seller in Canada’s $1-billion organic industry? At the time this article was written, the discount heavyweight was scouting for suppliers to fill its 272 Canadian stores and the seven planned Ontario superstores that will sell groceries, including fresh produce and perishables.

Canadians spend $2.5 billion a year on natural health products. A recent study cosponsored by the Canadian Health Food Association found that this sector employs 25,000 people in about 2,700 health food retailers, 650 stores with traditional Chinese medicines, and 7,600 pharmacies. Then there’s the Internet, a virtual mall teeming with health companies selling thousands of wares and services.

This is a $30-billion industry in North America and we have access to over 42,000 products.

But it doesn’t have to be overwhelming, says Judy Hamilton, a health food store manager in Grande Prairie, Alberta. “That’s what we’re here for,” she says, hitting on just one consumer issue in this ever-evolving industry.

New and Familiar Faces

Judy has managed the Health Hut since 1987 and owned a health food store for 15 years before that. That’s 35 years of watching faces and needs change. “The main things we sold back then were wheat germ, apple cider vinegar, and molasses. Adelle Davis was pretty much our only reference book,” she recalls. “Now natural health information is mainstream. It’s in magazines and on TV. Vitamin companies advertise everywhere. And the percentage of people visiting an alternative health care person in addition to their doctor is huge. In 1972 half of one percent of people used supplements.”

By 2001 the percentage of Canadians using natural health products had swollen to 75 percent. Plus, Statistics Canada notes that more than five million of us visit alternative practitioners such as chiropractors, massage therapists, and acupuncturists.

The most recent Baseline Natural Health Products Survey Among Consumers, released by Health Canada in March 2005, confirms that complementary medicine and its accoutrements are here to stay.

Thirty-eight percent of us use natural products daily, 37 percent use them seasonally, and 11 percent use them weekly. Our main reasons are “personal health concerns and the desire to promote personal health.”

Vitamins, herbal remedies (especially echinacea), algae, and antifungal products top the official most popular list. Back at the Health Hut in Prairie Mall, weight loss, energy, and immune enhancement products are also hot sellers.

Let’s not forget old faithfuls like vitamin B-complex, vitamin C, and the multi. “Most families realize everybody needs a vitamin supplement because food isn’t what it used to be,” says Judy.

“I enjoy being able to help people with their health issues,” she adds. “It never gets boring because there are always new products and remedies coming out.”

The Informed Message

More choice is good news for consumers, agrees Deane Parkes, health food retail consultant and president of Preferred Nutrition, a vitamin distribution company. “Back in the 70s, there were no soy milks, no rice milks,” he recalls. “Body care was, like, one shampoo. Natural chips were limited. Now you could have a 40-foot section of chips alone.”

After reading a book on yoga, Deane embarked on a health food lifestyle in 1972, bought a store in 1975, and has since worked in virtually every aspect of the industry.

One recent challenge, he notes, is conflicting media messages. “One day, you hear XYZ is good for you; the next day, it’s not. You hear organic food isn’t better than conventional. The consumer at the other end of the messages is going, ‘Is this true?’ Still, consumers nowadays are mostly in their fifties and their BS meters are pretty good. We’ve been around a while. A good majority have the education to take the responsibility to look at things.”

It’s not just consumers who’ve become–or have had to become–more discerning. It’s staff, too. “When you ask what differentiates a health food store from a mass market store, education comes up,” Deane says. “If health food stores are going to have a unique place in a community, they have to be a wellness resource centre. They have to be on the cutting edge of education.”

The Health Hut is one store where this tenet is taken seriously. “We encourage new staff to take a nutrition course. We have two iridologists, a herbalist, a digestive aid counsellor, and others are getting more training,” says Judy. “We try to keep on top of [new]. Companies send out reps, and some give workshops and online conferences.”

Savvier Sellers

Another change, says Parkes, is better business savvy. “Consumers are looking for convenience,” he explains. “They don’t want to come in and waste their time. The old-fashioned, cluttered health food store model is out. They want a clean store, well merchandized, well spaced with knowledgeable staff. If they have a product to return, they don’t want hassles. When it comes down to it, what they want are good business practices and fair prices.”

Country Sun Natural Foods in White Rock, BC, is an example of this winning formula. They boast a bulk food section, supplements, herbs, vitamins, and more–not to mention a strong staff that has helped keep them rolling since 1976.

“I’ve always had a passion to know more about the body and how it works. That’s why I got into this industry,” says Rayana McRae, iridologist, herbalist, nutritionist, and reflexologist, who started work there in the late 70s.

“I think the integrity of the old pioneers has faded out,” she admits. “In the beginning, there were only a few brands, but they brought quality. Today, we have more choice, but you need to read the fine print. Read the labels.”

Product labels are indeed a big concern, notes Health Canada’s 1995 consumer survey. Two-thirds of Canadians (67 percent) who use natural health products read labels, but 52 percent believe that they don’t contain enough information. Seven in 10 respondents (69 percent) said labels need more information.

Labels are one matter governed by the federal Natural Health Product Regulations that went into effect January 2004 and are still being phased in. Approved products carry a drug identification number that proves the product has undergone and passed a review of its formulation, labelling, and instructions for use.

In the meantime at Country Sun, staff also take a very hands-on approach to selection. Rayana and her coworkers are not afraid to experiment and try things on themselves before recommending new products.

Fading Founders’ Energy?

But is the health food industry’s founding energy, if you will, fading as Rayana suggests? Deane also believes some motivations have changed, and not for the better. At some point during expansion, he comments, “the industry became an investment.”

Not a week goes by that we don’t hear news of a small health company or independent retailer bought out by a bigger one. According to Deane, some of these profit-driven players may not have what he calls the heart of the original pioneers. That’s why his company shows their support by distributing products only to traditional health food stores and specialty pharmacies.

“The way I see it, when you go to a health food store, the people are into the lifestyle or some cause or another. [In] there’s no emotion in mass market,” he says.

About why she prefers smaller stores, Rayan says, “Perhaps you’re not making as much money, but you’re helping people.”

Obviously, the industry has come a long way, but have we peaked? Deane doesn’t think so. “Interest is relative to the aging population. It’s only after age 50 that most health concerns kick in. I see the industry growing and growing. The pharma-model is not interested in a cure or in helping people live healthier lifestyles.”

Judy at the Health Hut agrees. “People are finding out through experience that drugs and surgery aren’t the only answer for everything.”

It’s also obvious in researching this article that while change is inevitable, dedication and genuine passion for health are still out there.

“It’s an industry of individual freedom and choice,” Rayana at Country Sun sums up. “I’ve seen so many lives change because people are healthier. And if they’re healthier, they’re happier. The two go together.”


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