Last September, Suzanne wrote a blog post called“Organic” needs a re-brand. In it, she highlighted a sampling of quotes from our Pulse Focus Groups:
“I think everything’s organic — isn’t the definition of organic that it grows?”
“Once you add plastic to a product you’re taking away some of the organic.”
“Aren’t all bananas organic anyway? They all come off trees.”
“A cereal box can say it’s certified organic, but read the ingredients and you’ll see it still has just as much sugar and all the added preservatives of the non-organic cereal … and it’s way more expensive.”
These quotes exemplified the consumer confusion surrounding the term “organic” with their absolute confidence that they knew “exactly what they were talking about” being the kicker. It’s almost a year later, and while we’re seeing continued interest in organics, we’re not seeing an uptick in organics purchase behavior.
In our soon-to-be-published Eco Pulse™ 2012 study, 54% of Americans chose either “100% organic” or “USDA–certified organic” as one of the best descriptions to read on a food product label – while 42% said that they are seriously searching for “greener” food products. Only 19%, however, said that they most often buy organic produce or beef (compared to 22% in 2011). So what’s the disconnect?
Price.
We frequently hear this complaint in consumer focus groups, so we took a trip to our local Kroger this week to investigate. There, we found these price premiums for organic foods:
BABY FOOD – 54% Premium
Gerber regular 7 oz./2 pack: $1.09 (sale price)
Gerber organic 7 oz./2 pack: $1.63
MILK – 33% Premium
Mayfield 2% gallon: $4.49
Simple Truth 2% organic, gallon: $5.99
YOGURT – 20% Premium
Dannon Light and Fit Vanilla yogurt, 32 oz, tub: $2.49
Simple Truth organic vanilla yogurt, 32 oz. tub: $2.99
Next page: Elite or egalitarian?
Some clues can be found in
Some clues can be found in the example of the UK organic milk market, which provides a fascinating case study (see: http://sustainabilityneedsmarketing.com/2012/02/20/consumers-dont-buy-br...)
Between 2001 and 2006, with an annual spend of £150k, OMSCo (the Organic Milk Suppliers Cooperative) achieved annual organic milk market increases of between 21%-44%, with liquid milk increasing 30%–65% p.a. Organic milk went from 1% of the liquid milk market in 2001 to 4% in 2006 (5% by value). Household penetration of organic liquid milk went from 8% in 2002 to 24% in 2006. All of this was achieved when the price premium was 50% in 2001, dropping to a minimum of 23%, and rising again to 40% in 2006.
The reason for this spectacular growth? Isolating the message of most importance to consumers - health, careful targeting and use of appropriate media - PR and online activity. Unfortunately the UK organic market has forgotten the lesson and now uses a poorly targeted, confused scattergun approach using inappropriate media to try and build sales. It has failed utterly - the market has declined every year for four years now.
Yes, "Organic" needs a
Yes, "Organic" needs a re-brand -- a different term. I would suggest that customers do not want USDA Organic. Yes, there are some true believers in the Organic Farming religion, but what most people want is food grown without pesticides, without hormones, and without sub-therapeutic use of antibiotics.
But, USDA Organic is much more than that. To me it appears to be an example of regulatory capture where the government agency reduces competition by fiat. The complex and arcane rules for USDA Organic were written by the existing Organic farming industry -- the true believers. This created what Economics calls a barrier to entry. A farmer that wishes to grow organic will have a lot of bureaucratic regulations that will require a considerable investment to comply with. And, as any economist knows, a barrier to entry to an industry means higher prices for consumers.
First you have to give the
First you have to give the *real* definition of "organic" and come up with another word for safe food.
Then you have to stop believing that the USDA organic label has an equivalency to California organic or Oregon organic.
It doesn't.
The provisions in what constitutes "USDA Organic" has been gutted with both inclusions and exclusions.
The so-called "natural flavors" can be derived from natural sources using toxic chemicals. The "artificial flavors" in ingredients list are almost exclusively chemicals that if we knew what they really were, we'd throw the container in the garbage can unopened.
None of us want to consume food that is dangerously filled with chemicals that are injurious to our health.
But Monsanto has made sure we don't have the right to know what is in our food.
Why is it that one company can drown out over a million American's desire to at least just KNOW WHAT IS IN THEIR FOOD?
If we do not stop them, there will be *NO* organic food left in the world.