Organic sales up 12.2% says SPINS; but be careful what you attach label to, says Hartman Group

However new research from the Hartman Group suggests consumers are not prepared to pay a premium for more processed organic foods, and view the entry of some mainstream packaged food brands into the organic market with suspicion.

The rise of processed organic junk food is weakening the link between healthy and organic​

In a webinar​ outlining the findings of new research with more than 1,600 consumers, Hartman Group said there is still some uncertainty about whether big brands can “do organics correctly​”, although many consumers believe the only way prices will come down is if larger players get into the market.

While organic "has solidified its place in the mainstream​" with 36% of Americans are now buying organic products at least once a month, big brands should be careful about how they approach the market, said Hartman Group’s senior ethnographic analyst Amy Sousa.

“The rise of processed organic junk food is weakening the link between healthy and organic​... Consumers are now less likely to assume a product is healthy simply because it carries an organic label…”​

The organic certification loses its appeal if it is on products full of sugar, corn syrup and unidentifiable ingredients…​

She added: “The organic certification loses its appeal if it is on products full of sugar, corn syrup and unidentifiable ingredients… Nor does it make sense to consumers to pay the organic premium for organic ‘junk foods’ because they are not healthy anyway.​

“Consumers would much rather spend their organic dollars on organic produce, meats, dairy and other inherently nutritious foods.”​

Organic meats are an area of particular consumer interest, she said. “However, price is a major obstacle.”​

Natural more meaningful than organic to some consumers - with caveats​

But how do consumers view 'natural' versus organic foods?

While the word ‘natural’ has no legal definition, it is “more meaningful to consumers today than it was in 2010​”, added Sousa.

“Consumers prefer a natural product with a simple and clean ingredient list over an organic product with a longer list of ingredients that appears to be more processed.”​

But this doesn’t mean that slapping an 'all-natural' label on any old product will drive sales, she said.

“Consumers are quick to distinguish truly natural foods from foods that are merely marketed as such.”​

More shoppers are buying organic to avoid GMOs​

As to why Americans are buying organic, reasons vary, but most shoppers are doing so because they want to avoid​ things (GMOs, pesticides, herbicides, growth hormones, antibiotics and artificial colors, flavors and preservatives), and not because they believe organics are necessarily more nutritious, said Sousa.

Her comments echo recent research from SPINS, which noted last month that "in addition to purchasing products touting the Non-GMO Verification seal, consumers are also turning to organics to avoid genetically modified ingredients."​

It added: “Though not a foolproof method of doing so as the USDA organic program does not require testing for GMOs, buying organic does ensure that those ingredients are not intentionally added to the products.”​

*The SPINS data covers the 52 weeks ended September 29, 2012, covering natural channel stores, specialty gourmet stores and Nielsen ScanTrack data covering FDMx (food, drug and mass merchandise stores excluding Walmart), Walmart, club stores, dollar stores and military stores.