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From The Fall 2004 Issue of Natural Grocery Buyer
Statshots
 Where Farmers Market Their Organic Products
Respondents to a survey by the Organic Farming Research Foundation said they predominantly sold their vegetable products locally; 79 percent of vegetable products were sold within 100 miles of the farm.
Point/timing of price determination
Eighty-six percent of vegetable products were priced at delivery (on the “spot” market) with no forward contract, while 14 percent of product was sold under forward contracts.
Organic price trends
Twenty-six percent of respondents indicated that their prices went up in 2001.
Fifteen percent indicated that their prices went down.
The largest number of respondents, 52 percent, indicated that their prices held steady for the year.
Sales of organics into conventional markets
Thirty-seven percent of respondents indicated that some amount of their organically grown food was sold into the conventional market.
Of those who said that they sold organically grown food into the conventional market, 51 percent indicated that they did so because an organic market was unavailable.
Thirty-two percent said they did so because the conventional price was good or high.
Source: OFRF’s 2004 “Fourth National Organic Farmers’ Survey”
The Wall Street Line
- On average, dollar sales for more than 135 tracked food categories were flat in the four-week period ending July 11 versus last year’s four-week period, with a 2 percent volume decline more than offset by a 2 percent increase in prices.
- Higher commodity prices began to push retail shelf prices up, especially in dairy- and meat-related commodities.
- While there have been several reports claiming that interest in low-carb diets is waning, the latest Information Resources Inc. numbers nevertheless continue to show that low-carb diets are having an impact. Categories such as snack nuts posted robust growth, while carb-heavy products such as cold cereal and biscuits showed diminished growth.
- Refrigerated pizza, soymilk and flavored rice categories posted strong growth and were highlighted as “emerging” trend categories that are benefiting from consumers’ interest in health, convenience and ethnic foods.
Source: IRI, Merrill Lynch The Food Industry update for the 4-week period ending July 11 versus last year’s 4-week period
Categories To Integrate
Periphery and mid-level consumers ultimately prefer organic products to be integrated within the conventional product category at mainstream grocery stores, particularly with regard to the following products:
Dairy (milk, yogurt, butter)
Produce
Baby Food
Snacks (chips, nuts, pretzels)
Juice (refrigerated and shelf stable)
Frozen foods (vegetables, entrees)
Periphery and mid-level consumers are still comparing brands, prices and ingredients before making purchase decisions on most products. These consumers are also buying a combination of conventional and organic products from their primary grocery retailer and appreciate the ease of finding conventional and organic products in the same area.
Source: The Hartman Group Inc.,
“Organic Food & Beverage Trends 2004” report
Remember the Dannon ad in the ’70s that featured a 100-plus father and his 90-something son? Long considered a healthy food, yogurt’s share of the dairy case is growing. Its nutritional benefits and beneficial bacteria (probiotics) pair well with its portability. Mintel looked at the market and found:
- Seventy-one percent of consumers eat yogurt for lunch while 64 percent eat it for breakfast.
- More than two-thirds of all Americans eat yogurt.
- Almost three-quarters of American women eat yogurt compared to slightly more than half of men.
- Total yogurt sales in the United States topped $2.7 billion in 2003.
- Yogurt sales are predicted to reach $4.1 billion by 2008.
Source: Mintel
Organic Brands Resonate With Consumers
People love stories—movies, books, campfire tales and … their cereal? Yes, consumers want to connect with their favorite brand and the brand’s “tale” is an important part of that dialogue. The following are some brands whose stories hit home and why.
High Resonance Brands
Amy’s Kitchen
- Relevant narrative focused on “taking care of the family”
- “Home-cooked” foods with natural, organic or vegetarian twist
Horizon Organic Dairy
- Distribution in 65 percent of U.S. grocery stores, little national competition
- Innovative delivery form and packaging appeal (happy cow) for children
Kashi
(Although most of its products are natural, consumers perceive them to be organic.)
- Consumer social networking around product’s weight-loss benefit
- Built a community through product names (Good Friends) and online success stories
Newman’s Own Organics
- Leveraging awareness of the mainstream brand
- Family heritage and narrative of company origin
Stonyfield Farm
- Storytelling around the company’s founding and community support
- Emotional connection to the brand (consumers attend “summits” for personal well-being)
Medium Resonance
Cascadian Farm
- Consumer visualization of a specific place where food is grown
Frito-Lay Naturals
- Consumers appreciate the ability to experiment with organic and natural, while still enjoying their trusted brands
Muir Glen
- Unique ingredients and special preparations give gourmet appeal
Odwalla
- Unique distribution through specialty coolers; appealing flavor profile
Silk
- Halo health benefit of soy attribute and good taste driving consumer acceptance
Source: The Hartman Group Inc. ,“Organic Food & Beverage Trends 2004” report
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