In your busy, hectic produce departments, how many of you have noticed the increase in the number of people buying organics? I know I've seen more families shopping for organic foods when I'm in stores around the country, and I've heard store managers say the same. But the latest survey in The Packer's Fresh Trends 2003 Guide found that it's not just a perception. Many consumers, in fact, prefer to buy organics in their local supermarket.
Retailers should take note: It's one of the few categories that offers growth. According to Nutrition Business Journal, 40 percent of organic food products were purchased at mass-market retailers in 2002, up from 34 percent in 2000 and 31 percent in 1998. Meanwhile, the rest of the grocery industry is busy gobbling itself up through consolidation, trying to compete with the likes of Wal-Mart.
Total organic sales reached $8.5 billion in 2002, with fresh produce sales contributing 42 percent of that total figure, or $3.6 billion. That's a whopping 25 percent increase for fresh produce sales alone! If that weren't enough motivation, consider this: NBJ predicts organic food sales will almost double again to $16 billion by 2006, by which time mass-market retail will also surpass natural retailers in organic food sales.
Competition for the organic consumer dollar is only going to increase, and knowing who your organic customers are and how to attract them is key to maintaining or growing your market share.
Bellevue, Wash.-based The Hartman Group broke the organics-buying constituency into three groups, which were briefly described in the June NFM Market Overview. Knowing what's important to each segment can give you the marketing edge to succeed.
- Periphery. These folks like the organic image and are beginning to buy organic products, but they lack knowledge. They may think "natural" equals "organic." They prize price and convenience over health and nutrition concerns. Friends influence them more than environmental issues do, and they shop in fewer channels.
- Mid-level. These customers have more awareness and knowledge about organics, are focused on health and environmental concerns, and may purchase from grassroots companies. However, price and convenience are still primary factors. This group has the highest growth potential as its members' knowledge about organics increases. They make most of their purchases in the grocery store channel.
- Core. This group has a greater commitment to the organic lifestyle. Its members are highly motivated by health and nutrition; price is a secondary concern. They seek stores with knowledgeable salespeople. They might shop multiple channels to find the products they want.
Armed with this knowledge, you can target your marketing more effectively and maintain your status as your community's resource for organic food. Ask yourself the following questions:
- Do the people working the stand know how to prepare the produce they sell?
- Do they know what's in season?
- Can they answer questions about how the organic produce they sell is grown?
- Can they explain the difference between conventional and organic produce?
- Do they understand why someone would pay more for organic produce?
If not, now is the time to start educating them so consumers will build loyalty to your store. You won't accomplish this overnight, so set goals and take steps to get to the next level of knowledge.
Re-evaluate your product mix. Perhaps the baby bok choy or hot peppers that didn't sell last year are worth looking at again. Consider advertising to let organic customers know the diversity of your product mix.
Finally, remember that organic customers are seeking a lifestyle. This is not achieved in a single shopping trip, but through a set of experiences leading to a commitment.
Mark Mulcahy runs an organic education and produce consulting firm. He can be reached at 707.939.8355, or by e-mail at [email protected].
Natural Foods Merchandiser volume XXIV/number 7/p. 27