Natural channel still accounts for bulk of Paleo product sales, but sales in conventional channels are growing faster, says SPINS

By Adi Menayang contact

- Last updated on GMT

According to SPINS data, jerky and meat snacks lead dollar sales of Paleo-poitioned products, with $21m.
According to SPINS data, jerky and meat snacks lead dollar sales of Paleo-poitioned products, with $21m.
The natural channel may have the largest share of Paleo-positioned products, with US retail sales up 123.4% to $76.8m in the year to May 21, but the conventional channel experienced the most growth, with sales up 218% to $55.8m over the same period, says SPINS.  Meanwhile, sales in the specialty gourmet channel were up 131.2% to $4.4m.

Total sales across all three channels were up 153.4% to $142.7m, says SPINS, which includes in its definition all packaged foods and beverages that feature the terms ‘paleo,’ ‘primal’, ‘caveman,’ or ‘ancestral diet-friendly’ on the packaging or website [whereas the IRI numbers we ran yesterday​ only cover products with Paleo in the brand name]. It also includes products that feature the Paleo Foundation Certification​.

This growth is seen as an indicator that Paleo-positioned products are not a fad, argued Jamie Phillips, SPINS director of scientific affairs. “Paleo positioned products are showing approximately 150% cross-channel growth rates including 400 new products in the last 52 ​weeks [ending May 21, 2017],”​ she told FoodNavigator-USA.

More Paleo protein, please!

Breaking down growth by category, the protein supplements and meal replacements category saw a whopping jump of 1244% in sales year over year, growing from $754,233 to $10m in the year to May 21.

In this same time period, multiple new protein supplements have been launched that cater to this niche. Significant growth in the category in all channels came from Ancient Nutrition​, which has a bone broth protein powder. For the specialty channel, a top player was Primal Kitchen​, which has powdered protein and collagen.

If protein supplements led in terms of dollar sales growth​, protein in the form of shelf-stable jerky and meat snacks took a clear lead in terms of overall dollar sales, which rose 81% $21.3m in the period, ahead of shelf stable wellness bars and gels (up 358% to $18m), frozen entrees (up 426% to $13.9m).

Crackers, crispbreads, cereals—also in on the Paleo bandwagon

Also on the rise were many snack categories, traditionally made of flour and other grains, which adherents of the paleo diet eschew. For example, sales of Paleo-positioned crackers and crispbreads increased by 420% to $6.6m, while chips, pretzels and snacks rose by 180% to $5.5m.

“Interesting is that some categories that are showing growth, like chips, pretzels and snacks and shelf-stable cold cereal seem like a potential disconnect with the Paleo model, yet the ingredients chosen are perceived as healthier (e.g., organic cane sugar vs granular sugar) therefore allowing consumers more options for permissible indulgence while following a paleo diet,”​ Phillips said.

There are also categories where Paleo-positioned products outpaced category growth overall, as is the case with Frozen Entrees (Paleo Positioned 426.21% vs Not Paleo Positioned 1.35%), Wellness Bars & Gels (Paleo Positioned 356.19% vs Not Paleo Positioned 7.59%), and Condiments & Dressing (Paleo Positioned 340.09% vs Not Paleo Positioned 0.06%).

“It is worth noting that not all categories are showing growth—Refrigerated Plant-Based Milk & Creamer, Water, Desserts & Desserts toppings, Salsas & Dips are categories showing a decline,”​ she added.

Getting rid of ‘Paleo’ in the brand name

While Phillips sees Paleo as beyond just a fad, other market analysts beg to differ. In a recent interview with FoodNavigator-USA​, Mintel’s director of innovation and insight Lynn Dornblaser said that “Paleo has a lot of appeal for a very small segment, and that very small segment talks about it all the time, so it feels like it’s way more important than it is.”

Dornblaser added that brands should even consider avoiding Paleo claims on pack in order to avoid alienating more mainstream consumers. Meanwhile, IRI executive president and practice leader Sally Lyons-Wyatt agreed with Phillips.

“What we have seen over the last ten years is that claims matter. If companies can either have Paleo in the title or something like ‘Paleo approved’ on pack, that’s a draw,” ​she said.

Speaking independently from a brand perspective, Brittany Chibe, founder of Paleo granola brand Paleo Scavenger, concurs to some extent with Dornblaser. Having doubled sales in the independent channel and landed a distribution deal with KeHE Distributors, Chibe agreed that more retailers are asking for Paleo-positioned products—but her company is going through a rebranding and renaming project this fall.

“We’ll still be Paleo certified and a Paleo product, but it’s very siloed and can be limiting in terms of conventional retailers,” ​she said. In the Chicago food and beverage brand community, Chibe said she has seen other smaller Paleo brands take the word out of their name.

But the message behind the movement still holds strong, and she’s keeping the Paleo Foundation certification on pack. “I think it’s more about being a better-for-you snack alternative,” ​she said.

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