News

KEEPING IT REAL

By Rebecca L. Weber

Back in the 1980s and 90s, organic foods - grown and packed without any chemical herbicides or pesticides - were available mostly in the odd farmers' market or hippie health food store. The customer was generally the fringe buyer who wanted to "get back to nature."

But there's been a radical change in those who weren't even radical to begin with. Everyday consumers with an increasing environment, social and health awareness (combined with savvy marketing on the part of green retailers) have revolutionized the enviro-friendly marketplace.

Total dollar sales of organic foods have consistently grown each year for the past decade, sometimes by more than 20 percent. Datamonitor predicts that the US organic market will reach more than US$30 billion by 2007. The upscale Whole Foods Market is the largest natural foods chain, with more than 160 locations in North America and the UK. And the mass retailers such as Safeway, Target and Wal-Mart are greening their shelves with organic foods.

NATURAL SELECTION
Chipotle, a Mexican fast-food joint owned by McDonald's, recently added organic carnitas (barbecued pork) to its menu. "We did a comparison tasting and the organic product is more flavorful, juicier and full-bodied," Chipotle exec Joe Stupp told Restaurants & Institutions magazine. And although they passed the increased costs (of almost US$1) onto customers, the better taste makes them "feel the jump [in price} is worth it." (www.chipotle.com)

Organic For Life
Organic foods are a component of a long-term lifestyles. Its primary customers are looking for all kinds of sustainable products, from personal care (such as lotions made from organic herbs) to home décor and fashion, such as clothing and linens produced from organic cotton. In March, Organic Style cracked Mediaweek's hot 10 under 50 list of magazines. Increased sophistication across many categories has particular manifestations when it comes to organic foods, says Adam Hanft, a columnist for Inc. Magazine. "There's more source consciousness, more interest in product biography, more educated consumers who understand the differences between natural and organic," says Hanft. "There's more interest in small [companies] and a rejection of large agribusinesses."

Old methods of cutting up customers by demographics are not as successful with value-driven markets, which require more demanding research to understand how these customers spend their whole day, adds Hanft. It's not just significant that customers g to Whole Foods Market, but what kind of car they drive to get there. "Organic is its own brand," says Andrew R. Greenberg, CEO of Greenberg Brand Strategy. "Even though all lettuce comes from the ground, it's a perceptual game. The promise of organic as a brand is very wide and really includes sustainable farming and saving the earth. It comes back to some form of authenticity. Look at Trader Joe's, which is listening to its customers through market research, and is including organic produce and products. People can pinpoint specific times in their shopping experience where there's a human element, warm and caring, not corporate. It's family run, and you can tell."

Less Is More
In 2004, organic food and beverage sales were up 18 percent, according to the Natural Marketing Institute's (NMI) 2005 Organic Consumer Trends Report. However the total number of consumers was actually down to about 30 percent, or 62 million households, from a peak of 40 percent in 2003.

"This apparent paradox may indicate increased usage among a dedicated user base which translates into higher sales," says Maryellen Molyneaux, president of NMI. About 70 percent of Americans don't buy organic at all. For the price-conscious, it may not matter what the label says.

"There's no question that [organic foods are] more expensive, some say elitist," says Hanft. "The working class may say it's difficult to pay $8 a pound for organic mangoes."

While companies are using market research to stay in tune with consumers, it's not necessarily the driving force, says Greenberg. "Organic has a life of its own."

SECRET INGREDIENTS
The long-term health risks of genetically modified (GM) foods are still to be determined, yet almost all corn grown in the United States today is genetically modified. Corn syrup is present in many processed foods, such as soda and fast food hamburgers. Companies aren't required to label foods as GM, but certified organic foods never contain GM.