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Organic growth freezes but will thaw, says Mintel

By Caroline Scott-Thomas , 23-Feb-2009

The number of consumers buying environmentally friendly products has slowed with the economy but is still expected to increase over the next five years, according to new research from Mintel.

The consumer survey showed that the number of consumers who habitually buy green products – including organic food – remains unchanged on last year at 36 percent, despite having tripled the year before, from just 12 percent in 2007.

Senior research analyst at Mintel Marcia Mogelonsky said: “People’s priorities have changed because of economic hardship. A substantial number of shoppers are now struggling just to provide the basics for their families, so green living is no longer top of mind for many Americans.”

Despite envisaging static sales in green products this year, Mintel said that it still foresees the overall category to grow by 19 percent to 2013. Organic food, which Mintel calls the most mature part of the green sector, is set to experience “slowing but steady growth” during that time, according to the market research organization.

Green prospects

Speculation has been rife over how well the environmentally friendly and organic sector will survive the recession. Earlier this month, UK-based marketing and information firm Organic Monitor said that falling demand for organic ingredients meant that prices were coming down, after a long period where demand outstripped supply. It said that this could help to keep customers buying organic food – and keep the sector growing – even as it faces competition from natural and local foods, as well as downward pressure from lower-priced private label organics.

Green appeal

However, Mintel’s research found that over half of those questioned would be willing to pay more for environmentally friendly products, but “only a little extra”. This echoes the results of an earlier Mintel survey, conducted in October, in which 78 percent of adults said they would buy more organic food if it were less expensive.

Mogelonsky said that consumers are looking for value, and that although cost is an important part of that, there is a range of factors that shoppers consider when making any purchasing decision.

She said: “True value includes health and safety benefits, quality, convenience, appeal and trust, all at a reasonable price. Companies who provide those benefits, as well as appease shoppers’ green sensibilities, will enjoy success despite the recession.”

Health and safety in particular are high on consumers’ shopping lists at present, in the wake of several high-profile food-borne illness outbreaks, including the current one, involving salmonella in peanut products.

It is possible that this could give a boost to the organic food sector, because of high levels of consumer trust in its clean, green image.

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