Study: Health-conscious consumers generate $285 billion annually

Dunnhumby has released a special report revealing the rising importance of health-focused consumers in the U.S. grocery market. 

The key finding of the Better for You (Customer), You (Brand), and You (Retailer) report is that health-conscious shoppers represent a $285 billion annual opportunity, comprising 33% of the population and driving significant market trends.

Natural Grocers, Amazon Fresh and The Fresh Market emerged in the report as the leading retailers for health-conscious consumers, with 60% of their customers focused on health, compared to just 32% for the average U.S. retailer.

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The report also found that 64% of U.S customers rank physical health as the most important need for them, ahead of financial health (58%) and mental health (55%). More than half of customers expect a high level of support from retailers and brands with products, services and information for these three top needs.

Key findings from the study include:

• Health-focused customers are worth $285 billion to the grocery industry every year, around 20% of the 1.7 trillion-dollar industry, and representing 33% of the population. Retailers who over-index to this customer segment experience a long-term grocery sales growth (5-year compound annual growth) average of 7%.
• Health-focused customers tend to be younger (18-44), have more children, have higher incomes ($100,000+) and have larger monthly grocery budgets. They also exhibit more omnichannel and loyalty behaviors than their less-health-focused counterparts.
• Health-focused customers care most about quality (63% versus 47%), digital (45% versus 30%), and values (55% versus 31%) and less about price (64% versus 71%) than their less health-focused counterparts.
• The future GenZ customer is reshaping health behaviors. Sixty-one percent of GenZ shoppers care most about mental health, 15 points higher than those between 45-54, and double that of those 75 years old and over. Similarly, GenZ and Millennials exhibit and invest more in values than their older counterparts.

"With health and wellness predicted to be the most critical trend for decades, retailers and brands have unprecedented opportunities to meet emerging customer needs." said Matt O’Grady, president of the Americas for dunnhumby. “This groundbreaking report provides a blueprint for meeting customers’ health needs now and into the future. As the grocery landscape continues to evolve, understanding and adapting to these health-centric consumer trends will be crucial for retailers and brands aiming to remain competitive in an increasingly wellness-oriented market.”

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Brands and retailers can improve their standing with health-focused customers by getting a better understanding of the nine dimensions of health that reflect a more holistic understanding of consumer priorities, ranging from physical and mental health to environmental and financial wellness.

Better for You (Customer), You (Brand), and You (Retailer) is available for download and includes the top performing retailers for the future, alongside actionable strategies for retailers and brands to invest in health dimensions that matter most to consumers.

For the report, dunnhumby included the largest 73 U.S. retailers in the industry that sell everyday food and non-food household items. To identify the dimensions of health that matter most to customers, the behaviors that define Better-for-You shoppers, the elements (or needs) of the customer value proposition that matter most to them, and the best positioned retailers with these same shoppers, the company relied on two key resources: dunnhumby’s Consumer Trends Tracker and dunnhumby’s Grocery Retailer Preference Index.