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Price puts brake on organic sales

16-Oct-2003

One year after new rules on organic standards hit the American food industry one in ten Americans are eating more organic foods, reports a US trend tracker - but price is still a barrier to new converts.

Sales on snacks, ready-to-go and packaged goods have all risen the past year plus a 21 per cent growth rate across all product channels, reported the 2003 Whole Foods Market Organic Foods Trend Tracker.

 

The survey of 1,000 adults, commissioned by the supermarket chain Whole Foods Market, found that more than half of the population - 54 per cent - have tried organic foods, with nearly one third, 29 per cent, claiming to consume more organic foods and beverages than one year ago.

 

"The mainstreaming of organics has created a gateway for consumers to expand their horizons with organic food choices with an eye toward maintaining their budgets," commented Margaret Wittenberg, vice president of governmental and public affairs for Whole Foods Market.

 

National organic standards mandated by the US department of agriculture were brought in last year in a bid to provide the consumer with clearer labelling. According to the survey, one out of three Americans (29 per cent) believe the new logo and/or clearer labelling has had an impact on their decision to purchase organic foods. Nearly one-half (47 per cent) of those claiming to consume more organics than they did one year ago say 'that clear, credible organic labelling makes them more inclined to purchase organic foods', said the survey authors.

 

Certainly no surprise, even though one out of five Americans (19 per cent) is more inclined to purchase organic foods regardless of the price, how much to pay remains the biggest barrier for consumers who do not eat organic foods to try organic foods with nearly seven out of ten (69 per cent) who do not eat organic foods claiming price is a major factor in their decision.

 

"Organic, not conventional foods, are the bargain when all of their effects on human, animal and environmental health are factored in," defended Katherine DiMatteo, executive director, Organic Trade Association , that represents the €11 billion organic industry in North America. "Organic food prices represent the true cost of production. Conventional prices do not. They fail to incorporate $10 billion a year in externalities, the costs passed onto society at large," she added. An argument, however valid, that may fail to convince the holders of the purse-strings.

 

Produce continues its reign as the primary gateway to organics but the survey showed that consumers are purchasing more organic foods in expanding categories. The category with the most growth over the year is snacks with 18 per cent of infrequent users claiming to purchase organic snacks. The biggest gateway for infrequent users remains produce - 63 per cent - followed by bread or bakery products at 21 per cent, and just behind, non-dairy beverages beverages with 20 per cent.