Hartman Group: Organic ‘is still meaningful, but … doesn’t symbolize everything’ consumers want
“Organic … is still meaningful, but we are starting to see consumers, as they become more knowledgeable about it, that it maybe doesn’t symbolize everything they care about” in a way that it once might have, said Laurie Demeritt, chief executive officer of the consumer research firm The Hartman Group.
Pointing to findings from the firm’s recently released Organic and Beyond 2020 report, which includes data from a nationally representative online survey of 2,289 adults as well as qualitative research, Demeritt said there are three main spaces where consumers are seeking more than what organic currently offers.
These include animal welfare, social welfare or workers’ rights, and soil health – all of which organic touches on and some of which organic leaders are aggressively trying to strengthen.
Animal and worker welfare
According to Demeritt, “A fully 78% of consumers believe there should be more stringent animal welfare requirements” for the USDA organic certification.
This likely is rooted in the increased importance to consumers of the human treatment of animals, which the Hartman Group report found increased 4 points from 2018 to 44%, and free range, which also increased 4 points from 2018 to 32%. In addition, the report found 41% of consumers value antibiotic-free and 41% value hormone-free when shopping.
“This is an issue where for many consumers they had a belief that organic was symbolizing certain aspects of animal welfare, but as they got more knowledgeable and savvy about organic, they felt it really wasn’t doing enough,” Demeritt said.
The organic industry has for years aggressively tried to strengthen animal welfare standards under the organic seal, and despite near unanimous support and the passage of legislation that would do so under the Obama administration, the final rule was overturned early in the Trump Administration.
For two and a half years, the Organic Trade Association has pushed back against the withdrawal of the Organic Livestock and Poultry Practices. A US District Court decision in March potentially brought it one step closer to winning the ongoing tug-of-war. That decision chastised USDA for its role in an “administrative process at its never-ending worse,” and gave the agency 180 days to reconsider its arguments and modeling for whether to remove or leave the rule.
A similar percentage of consumers – 76% -- believe the organic label should have more stringent standards around social welfare or workers’ rights, reports Demeritt.
Concern about soil health and the potential for regenerative agriculture to move beyond organic is emerging among some core organic users, but as Demeritt notes “it is not something that is slipping off the tongue of consumers.”
However, she predicted, regenerative agriculture could gain popularity quickly with the introduction of several new seals, including Regenerative Organic Certified, which builds on organic certification but adds more about soil health and land management, animal welfare and social fairness.
She explained that The Hartman Group believes regenerative agriculture “has legs compared to what we have seen in the past” because it is “based on science and things that people can check-box and understand. It has pretty concrete goals and a modular approach … that are much easier for consumers to understand than some of the things we have seen in the past.”
Similarly, she noted, the Soil Carbon Initiative, which is still in development, takes into account soil health and climate change, and can be applied by organizations that are not organic or that are conventional.
Research released in the past few years by the Organic Center supports the impact of organic practices on soil health and particularly carbon sequestration – so again this is an area that the organic industry is actively exploring and bolstering.
According to the Organic Trade Association (OTA), US sales of organic food rose 4.6% to $50.1bn in 2019, accounting for 5.8% of total US food sales compared with 3.4% in 2010.
Produce is the largest organic food category, with sales up 5% to $18bn in 2019, while sales of organic dairy products rose 2% to $6.6bn.
Sales of organic meat, poultry and fish rose almost 10% to $1.4bn.
Organic sales, perception of quality rise
Even as some organic users begin to look beyond the standard for additional assurances around soil health, workers rights and animal welfare, sales and penetration of organic continue to rise.
“The organic market place … has doubled in size over the past 10 years. Growth has continued to do well. Growth did peak for organic food sales around 2013 at about 12%. It was running earlier this year about 6% compared to 2% for conventional food categories. So, obviously smaller in volume than the conventional market place, but still growing at triple the rate,” Demeritt said.
She also noted that overall usage is up with fewer consumers reporting they have never used organic products and 82% saying they use organic at least occasionally.
A key driver of this growth is the plethora of products now available, with many private label organic options that have helped bring down the price so that the products are more accessible to more people, Demeritt said.
She added that in the past seven or eight years “organic has become a symbol of quality, which is interesting because when the organic marketplace started 40 years ago or so, people typically felt like they were having to give something up in terms of organic – maybe it wouldn’t taste as good or it would be misshapen. But today, what organic symbolizes is a sense of higher quality and that is in large part due to people believing that organic has more care and thought that has gone in to its growing process,” which gives finished products a halo of quality.
Looking forward, Demeritt said, the values people associate with organic, including health and wellness, likely will help it retain strong sales even during a weaker economy.