Organic consumers yet to be shaken by troubled economy
Food prices may be rising but 70 percent of consumers are continuing to buy the same amount of natural and/or organic foods as they always have, the online survey, carried out on behalf of Whole Foods Market, showed.
The results also showed that 79 percent said they do not want to compromise on the quality of the food they buy.
Christopher Shanahan, research analyst, chemicals, materials and food, for Frost & Sullivan, said that in the short term, the survey results ring true.
However, he added: “In the long run I don’t think that is going to be necessarily true. I think consumers are going to start to switch away if prices become a larger factor.
“Trading away to more affordable goods would be a reasonable option.”
Food prices are predicted to rise between five and six percent this year, which would be the largest annual increase since 1990.
Shanahan said it has already been a gloomy year for organic foods, compared to food production in general.
But he added: “There are a lot of consumers who are very insensitive and only want to buy organic or buy products that are deemed natural.
“That won’t go away and that has always grown but there might be a substantial slow down away from that.
“Sourcing organic food may become increasingly harder as well because the margins on organic isn’t the same as other food. The incentive for farmers is diminishing.”
The once niche organic trend has become more mainstream over the years as major food companies have developed organic product lines, but there are signs that it is becoming an increasingly difficult market.
The Organic Trade Association (OTA) reports that US organic food sales have grown between 17 and 21 percent annually since 1997. That compares to between two and four percent growth for total US food sales during the same time period.
However, a recent report from The Hartman Group indicated that the organic trend has reached a plateau as consumer interest is waning and attention turns to other food categories such as fresh, local and fair trade.
Shelley Balanko, of The Hartman Group, told FoodNavigator-USA.com at the time that it is no longer the case that if food manufacturers make a product organic, consumers will buy it for that reason alone.
The report said manufacturers and retailers would have to develop specific understandings of the “organic categories that consumers find relevant and those that they find uninteresting and even frivolous”. Anexample of this is organic truffles.
The Food and the Economy survey, conducted by Harris Interactive, found 67 percent prefer to buy natural and/or organic foods to conventional foods if prices are comparable, and 66 percent would like to find ways to be able to buy these foods within their budget.
It also found that 43 percent of adults are now preparing more meals at home and 37 percent are going out of their way to look for lower-cost items as a result of higher food costs.
The online poll took place between August 6 and August 8, 2008 among 2,209 adults aged over 18. Data were weighted to be representative of the US adult population.