By Jacqueline Beckley and Leslie Herzog of the Understanding and Insight Group
Natural Products Expo West has mirrored the transitions in the U.S. food industry over the past four decades since it opened in 1981.
That first year, there were just 3,000 attendees. A whopping 85,540 attended the show in 2018, the most ever. After a dip because of Covid, attendance has popped back up to approximately 65,000 the past two years. This year -- the show was held March 13-16 -- there were more than 3,300 exhibitors, approximately 840 first timers.
The expo has always been held in Anaheim, Calif., with the convention center undergoing at least one addition resulting from a request by the organizers of the show to accommodate the ever-increasing numbers.
The complexion of those who exhibit has changed. In the early days, it was predominantly smaller companies -- some referred to the exhibitors (and maybe the attendees as well) as “crunchy granola types” shaped by cultural influences like the Whole Earth movement, Adelle Davis/Jack LaLanne personalities and the first edition of “A Diet for a Small Planet” by Frances Moore Lappe.
Since those early years, there has always been a mix of food, supplements and health & beauty aids. As NPEW progressed, changes were occurring around definitions of “health food” and wellness. NPEW came onto the radar of both large and small CPGs in the 1990s as “fads” from the show began to be sustainable trends with year over year sales growth.
The 2000s began with an interest in health, innovation and entrepreneurship, and investment companies were looking for opportunities in food. Multiple channels of merchandising (still specialty but now more mainstream) became more common. But there was still some of the crunchy granola community at the show in the early days of the new millennium.
As the Great Recession hit (2007-2008) and investment money became cheaper, it was trendy for incubators and venture capital interests to become prevalent in this health space and at the annual NPEW event. Small start-ups were being pulled into large food companies. Mass marketers desired to be a part of the mix to satisfy both their customers and their investors.
While this led to huge excitement at NPEW, it was changing the character of the show and the community. Smaller manufacturers looking for customers (whether it be independents or large chains) found themselves elbow-to-elbow at the show with big CPG companies with large booths (including Chobani, Bolthouse, General Mills, Unilever/Ben & Jerry’s). This was just before one heard people say “you can find our products on Amazon.”
Post-pandemic, smaller manufacturers may be in the majority again; it seemed fewer big companies were exhibiting this year. And fewer attendees came from independent “health food stores,” as this category collapsed during Covid.
One venture capitalist (who has been attending the show for more than a decade) commented after this year’s show that he spent most of his time sitting in meeting rooms as opposed to wandering the floor and “seeing what’s up and coming.” He also commented that, now more than ever, before VC firms buy a stake in companies, they want to see that the company has achieved profitability, not just has a path to profitability.
Some refer to this show as the best predictor of what will be “hot” or what will be the latest innovations in the food industry, all under one roof. What we know is that NPEW has succeeded in making its point of view, natural products, mainstream. So the trends are becoming more subtle. Regenerative and organic farming have become Regenerative Organic Certified. Sustainability and mycology are huge trends. And the marketplace is omnichannel, because consumers like “one stop shopping.” And the need to go to the quirky natural food store is now a stop on Amazon or even Walmart or Target.
Jacqueline Beckley is founder and owner of The Understanding & Insight Group LLC (www.uandicollaboration.com), a strategy and business development company; Leslie Herzog is vice president of operations & research services for The Understanding & Insight Group and a longtime member of Food Processing’s Editorial Advisory Board.
