The natural food industry and consumers needs are evolving when it comes to natural. As this area of the food industry continues to grow, product developers need to anticipate—and effectively react to—changes and create products consumers crave while delivering on the expectations of “natural.”

What exactly does the term “natural” mean? While it would be great to have a clearly delineated message and definition for the term, so far the regulatory agencies have yet to fully define it. While no formal definition exists, in direct response to consumers’ request for a definition of what exactly constitutes the term “natural,” the FDA delivered a response in 2016. The FDA considers the term “natural” to mean that nothing artificial or synthetic (including all color additives regardless of source) has been included in, or has been added to, a food that would not normally be expected to be in that food.

The biggest unanswered questions from the FDA are around growing, processing, and production parameters, such as use of pesticides or specific food processing methods. These gray areas are left up to the manufacturers and end users to interpret and set individual standards.

The USDA also attempted to add some clarity to the term as it related to the products it governs, releasing a definition for natural, as it relates to meat poultry, and eggs. The USDA states that “natural” means that the product does not contain any artificial flavor or flavoring, coloring ingredient, or chemical preservative…or any other artificial or synthetic ingredient; and that the product and its ingredients are not more than minimally processed. It also further clarified what is considered to be minimally processed.

These definitions set forth by the FDA and USDA still leave quite a few questions unanswered, making it a challenge for both consumers and manufacturers to truly understand what is considered “natural.”

On the market

Compared to the organic and overall food markets, the natural market is estimated at $69.2 billion, with +6% 2-year CAGR^, according to research by Future Market Insights. By comparison, in spite of the looser definition and lesser restrictions, this is only around half the size of the organic market, which is expected to reach more than $176.5 billion this year, on an estimated CAGR of 12.1%. For perspective, data from SPINS places the overall food market at $996.4 billion on a CAGR of 3.4%. 

Explore Natural/Organic Insights

One of the biggest drivers of the burst of interest in natural foods is an increase in consumer preference for obtaining functional or health and wellness benefits from foods and beverages instead of pills and potions. Consumers are more educated in ingredients than ever before and so are becoming avid label readers. Moreover, the desire for food and beverage products that can deliver on health and wellness is not tied solely to a single generation or age group; natural foods and the health connotations associated with them span all generations.

Building natural

The best guidance in developing natural products is to understand the standards the buyers and end users have already set and defined. For example, Whole Foods, Trader Joe’s, Chipotle, and Panera Bread all have very clear lists of what they consider “unacceptable” ingredients not permitted in any products they make or sell. Consumers also are guiding what “natural” means.

Right or wrong, consumer perception of what is natural, clean label, or healthy can be varying and inconsistent. For example, consumers have tied the notion of “healthy” to the natural label, which can be an advantage when developing food products in this category. However, for product success such products must deliver something tangible on what is promised or implied by the labeling.

Natural colors and flavors are among the most common and the best defined ingredients when building a product with a “natural” designation. But they also can be the most challenging in formulation. Natural flavors and colors must be stable for the product pH, processing methods, and have a shelf life close to that of conventional products using artificial colors and flavors. Natural flavors and colors, and even texturants are more susceptible to change over the shelf life of a product.

Sometimes, the use of such ingredients can call for alternative processing methods, or need to include other ingredients such as flavor boosters or maskers. In some cases, different packaging can help alleviate the issues.

Fortunately, ingredient technologists have made impressive strides in recent years that reduce many of the differences between these ingredients and their conventional counterparts. Partnering with such ingredient specialists can be a great advantage for product developers and manufacturers.

Natural competitors

More organic products are hitting store shelves than ever before, and it is important to consider shifting consumer sentiment towards organic products. So far, the higher price point associated with organic products has been a price some consumers are willing to pay. Plus, as supplies of organic ingredients increase, prices decrease.

When formulating, natural products have less restrictions and regulations associated with the label natural, in comparison to the strict regulation of organic product labeling. Natural ingredients are also more readily available, and at a lower price point than the organic counterpoints.

While some consumers value the difference between conventional, natural, and organic products, many consumers have blurred the lines and do not differentiate between natural and organic terms. Add “clean label” and non-GMO identifiers into the mix, and those lines can get blurrier.

Consumers actively seeking both natural and products tend to be less sensitive to price than traditional product consumers. Product attributes that are most important to these consumers include flavor, quality, nutrition/health claims, and sustainability. While this could get strained in times of economic downturns and dramatic increase in food prices, consumers still consider the value equation balanced in flavor and added value of natural and organic products. But it also can be a boon specifically for the natural category, which often has a slightly lower price point.

If government agencies are not leading the way in defining the term “natural,” litigation will certainly form the cornerstones of what is and what is not allowed. Ascorbic acid, DL-malic acid, citric acid, and even per- and polyfluoroalkyl substances (PFAS) levels have been involved in lawsuits that are helping to further define what is allowable under the label “natural.”

A good example is the lawsuit against AriZona Beverages involving coloring, with the litigants targeting certain products in the line contain additional coloring from beta-carotene, fruit and vegetable juices, and annatto—all three readily derived from nature and not only not harmful but even beneficial to health.

Sweeteners also have come under fire, with stevia, monk fruit, and more recently, erythritol landing in the headlines. Many sweeteners have been marketed as “natural” sweeteners, as they can be found in nature, but the processing methods used in their manufacture can “cancel out” that aspect. (Note that synthetic is different from artificial. Artificial is defined as “not found in nature,” an important distinction.)

From the FDA’s perspective, depending on how they are derived, a natural sweetener may be “manufactured artificially.” This is one of those aspects of “natural” that leaves much room for interpretation. Consideration of the source and processing of the ingredient can impact how these ingredients are defined. These examples just reinforce the position that the term “natural” must be considered carefully before adding to a label.

Even with the vagueness surrounding the term “natural,” the channel is continuing to grow and evolve. Moreover, there remains great opportunity for new product growth, with the caveat that new products must speak to the consumers’ desire for—and more acute knowledge of—the ingredients in them. But developers can definitely create products that deliver on flavor and quality, while still fitting the yet-to-be fixed definitions of what is consider “natural.”

Allison Rittman holds a BS degree in biological sciences from the University of Iowa and an AOS degree from the Culinary Institute of America and has more than 25 years of experience as a research chef for foodservice and ingredient companies. Rittman is the owner and corporate research chef for Culinary Culture, a product development consulting company in Austin, Texas. She may be reached at arittman@culinary-culture.com.

Natural desires

The consumer desire for more healthful and beneficial foods and beverages cuts across all generations, but younger generations are becoming especially aware of the foods they eat. They are searching for functional benefits, cleaner labels, healthier options, and products that benefit the earth as well as the body. Older consumers are turning to foods as medicine, wanting to include in their diets natural products that can help boost immunity, sharpen mental focus, improve energy, and even help mitigate the negative effects of aging.

Courting clarity

With the term “natural” still not clearly and distinctly defined by the federal regulating agencies, manufacturers and retailers have to define it (at least in part) for themselves. Such self-made guidelines are being challenged by consumers, and there has been a rise in lawsuits against label claims that declare products “all natural” and “100% natural” specifically. In September, 2022, after years of litigation, a New York judge ruled in favor of Kind, LLC that prosecutors failed to show that a uniform, generally accepted term for the word “natural” that defines consumers’ expectations exists. The ruling stressed that the plaintiffs’ own evidence showed that consumers hold differing views on what the term “all natural” means. This was great news for manufacturers, but expect future lawsuits to further push what is defined as “natural.” Legislature over perceived misuse of the term, coupled with consumer demand for more defined regulations will likely drive regulatory agencies to finally take a stance. “Organic” evolved in this way and developed credibility with consumers by the strong guardrails and programs—and organic certification—set out by the USDA. It could be one lawsuit away, or it could be years, but it’s reasonable to expect “natural” as a labeling term will be legally defined into something that has clear meaning to consumers and the industry.