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South emerging as strong market for organics, report

By Lorraine Heller , 23-Oct-2007

Manufacturers and marketers of organic foods and beverages should keep their eye on the southern region of the US, according to a new market report, which suggests that consumers in the south are catching up with the organic-friendly west.

Published this month by Scarborough Research, the report found that more than one quarter of the markets where organic products are most frequently consumed are in the Southern census region.



The research organization last month measured 79 local markets for organic consumption, and narrowed down its survey to 23 'organic markets', or markets found to have an above-average percentage of organic consumers.



Unsurprisingly, the region revealing highest organic consumption was the west of the country, where more than half (13) of the 'organic markets' identified were situated. Six cities were in the south, three in the Northeast and one in the Midwest.



The top markets for organic foods and beverages were found to be San Francisco, where 35 percent of consumers reported shopping for organic products within the past month, Seattle (32 percent), Portland, Oregon (27 percent), Washington DC and Denver (26 percent each), and San Diego (24 percent).



"The top five markets for organics consumers have youth, higher than average annual household incomes, and a fitness mentality in common," said Alisa Joseph, vice president, advertiser agency services, Scarborough Research.



"Cities such as San Francisco and Seattle have long been known for active, healthful lifestyles, and therefore it makes sense that these are the top markets for organics users. However, the industry should keep an eye on the Southern region of the US, as many markets there have a significant presence of organics consumers as well."



On average, organics consumers nationwide were found to spend 10 percent more on their weekly grocery bill, bringing this up to $217. Annual income was around $86,000, or 22 percent higher than the national average.



Organics consumers tend to be young and have families - they are 19 percent more likely than the national average to be ages 18-34 and 13 percent more likely to have two or more children at home, said Scarborough, which is a joint venture between Arbitron and The Nielsen Company.



Wal-Mart was cited as the top grocery store by people who buy organic products, followed by Whole Foods, which is often viewed as having a "special appeal". Other grocery stores that have a higher than average concentration of organics consumers are Trader Joe's, Safeway, Costco, and SuperTarget.



US sales of organic food and beverages have grown from $1bn in 1990 to nearly $17bn in 2006. Organic food sales are projected to reach $23.8bn for 2010.



The organic industry is viewed as the fastest growing sector of agriculture, currently representing nearly 3 percent of overall food and beverage sales.



Since 1990, organic retail sales have historically demonstrated a growth rate between 20 to 24 percent each year, including a 22 percent increase in 2006.

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