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Advertising & Marketing

Are retailers ready to meet consumer demand for organic goods?

The demand for organic produce is increasing rapidly, and recent figures from the Organic Trade Association show sales in the US alone have grown from $3.6 billion in 1997 to more than $39 billion in 2014.

This isn’t an isolated trend and growth in the organic market is seen also in Europe and Australia. In fact, today’s certified organic market is worth an estimated US$91billion globally.

THE REASONS FOR PURCHASING ORGANIC PRODUCE VARY

However, Epinion has found that simply defining a product as organic isn’t enough to ensure sales, as the motives for buying organic goods vary depending on product category and origin.

Epinion has made many analyses in the retail market for FMCG clients, working closely with food manufactures, industry associations and consumers. We found the following:

In the dairy and meat product categories, animal welfare is the primary purchase driver, with consumers believing animals raised ‘organically’ are generally treated better than those that aren’t.

In the flour, grains, fruit and vegetables product categories, choice is driven from the consumer’s own health worries, with the belief that reduced pesticide residues in food is beneficial to them.

Common to all product categories is an increasingly general concern for the environment.

Brands should therefore work more to promote messages relating to animal welfare and health advantages depending on what category the product falls in.

LOCAL IS MORE IMPORTANT THAN ORGANIC

Another interesting observation that studies of ours have shown is how consumers will choose non-organic food from their own country over organic products from others, even if they prefer organic produce as a concept.

In particular, one study we conducted outlined how the average Danish consumer actually prefers to buy organic apples, but only if they originate from Denmark.

This can partially be explained by distrust of foreign definitions and regulations relating to organic production, and partially in that there is generally greater consumer confidence in local products than foreign products. A common consumer perception is that the more local a product, the more natural and thus better it is.

Consumers are also very aware of the fact that importing food requires transportation which negatively affects the environment.

REDUCING THE BARRIERS TO PURCHASING ORGANIC FOOD 

Organic food manufacturers should apply this insight in order to reduce barriers to consumers. For example, foreign manufacturers must generate greater trust surrounding their products, whilst local manufactures must invest more in communicating their place of origin more clearly.

Brands should also be aware that there are numerous methods to get a deeper understanding of the consumer and thereby target them with more effect. To uncover shopper insights, Epinion uses industry standard market research methods.

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