Natural & organic industry ‘must create more space’ for BIPOC at leadership levels to expand consumer base

By Elizabeth Crawford

- Last updated on GMT

Source: Getty / monkeybusinessimages
Source: Getty / monkeybusinessimages

Related tags Spark Change BIPOC Organic

While sales of natural and organic products continue to grow in the high single- digits year-over-year, the industry’s lack of leadership diversity, including brands owned by people of color and women, is holding it back from its full market potential, according the New Hope Network and Whipstitch Capital.

Total natural and organic industry sales are expected to grow 9.5% to $252b in 2020, continuing a steady upwards trend of growth year-over-year since 2015, New Hope Network content team lead Carlotta Mast told attendees Aug. 26 during New Hope’s inaugural Spark Change – a digital initiative aimed at filling the void of trade show cancellations related to the ongoing coronavirus pandemic. Pointing to data from Nutrition Business Journal and SPINS, she added that this trajectory is expected to continue through 2023, when sales should reach $300b.

While good news for natural and organic products, Mast suggested the growth could be significantly higher if the industry expanded its appeal beyond its current primarily white consumer base.

Currently 27% of the natural and organic products market consumer base is made up by Black, Indigenous and people of color (BIPOC), and the rest are white, she noted, citing New Hope consumer segmentation research. This is reflective of the overall US population, according to Census projections for July 2019​. To shift the balance, the industry will need to over-index in some racial groups compared to the general population. 

“The consumers we target are very reflective of the overall demographic make-up of industry leadership, which is still predominantly made up of white men at both the company leadership and board leadership levels,”​ she said.

Pointing to research conducted by New Hope and the JEDI Collaborative in 2019, 81% of board members and 84% of leadership members are white and 68% of board members and 57% of leadership members are men.

Conversely, only 2% of industry board members are Black, 2% Indigenous, 2% Latinx and 7% East, Southeast or South Asian. Leadership teams don’t fare much better with 2% of members who are Black, 1% Indigenous, 6% Latinx and 9% East, Southeast or South Asian, according to the research.

“We, as an industry, must create more space for Black, Indigenous, Latinx, Asian and other people of color within all leadership levels and we must do more to support BIPOC-owned brands and within that we have to be really looking at how we are continuing to do everything we can to support women-owned brands and women as leaders in our industry,”​ Mast said.

“Without this kind of representation of leadership and company ownership, we will not be able to meet the needs of an increasingly diverse population,”​ which currently includes 40% BIPOC, she said.

By intentionally diversifying the natural and organic industry, Nick McCoy of Whipstitch Capital says stakeholders can tap into “a new dimension of innovation that is multicultural foods,”​ which already has strong traction among consumers.

Pointing to Technomic research, McCoy noted, 87% of consumers purchase food with ethnic flavors, and of those 32% are willing to pay a premium for authenticity and 36% like to explore regional varieties of mainstream cuisine.

In addition, Mast noted, consumers increasingly buy based on their values, and New Hope Network research found 74% of consumers believe prioritizing social equity and justice is more important today than in 2019 – creating another opportunity for growth.

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