By Len Monheit
As I examine recent news releases, one can’t help but get an inkling of the looming importance of organic for us all as it makes its mainstream move. The development of the National Organic Program in the US and the establishment of standards around the world have been and will be pivotal as that sector seeks legitimacy, credibility, and the preservation of the ideals at its core. I’ve spoken in the past about the challenges and pressures of moving mainstream, so won’t do that again here. Instead, I’d like to examine what the trend and movement will mean as it collides (or dovetails) with forces directing the growth of functional products. The promotion of organic ingredients has not paralleled those of finished products-not by a long shot. Does that mean they have no importance and limited relevance?
To start off with, if you examine the recent organic news on NPIcenter ( http://www.npicenter.com/news/newsOrgArticle.aspx), one of the curious things that strikes me is the lack of the ‘usual’ NPIcenter players making organic news – at least not on what we’re picking up. Sure, there’s a lot of current activity in Organic Personal Care, a dynamic and outspoken category/community not currently enveloped by the NOP, but the absence of organic ingredient news is a bit interesting, if not conspicuous. Of course, there may be several explanations for the lack, including completeness of coverage, but one would still expect, I think to at least see some news items relating to ingredient companies promoting organic alternatives.
According to most pundits, almost every aspect of the organic sector is growing significantly. According to the NMI release last week (http://www.npicenter.com/anm/templates/newsATemp.aspx?articleid=20749&zoneid=2) , the number of ‘DEVOTED’s’ is increasing, up to about 18 percent, and one would expect this category and the ‘TEMPERATES’(22 percent) to be two main groups buying supplements and functional products, and so presumably driving demand for organic ingredients in these products. So either this is not occurring (ie. there is limited to no demand), or the ad and marketing spend to promote the ingredients is not materializing – or both.
So is this an emerging opportunity? Is the convergence point between organics and functional ingredients being staked out as an emerging opportunity? Can a company combine the messages of ‘natural’, ‘organic’, ‘sustainable’, ‘fair trade’ and ‘functional’ to market advantage? Is the combination overwhelming and the selling and value proposition overly complex?
How significant the opportunity is remains to be seen although I suspect most will agree there is potential. Sunopta (http://www.sunopta.com/) has certainly established a key position in this area, and their focus and pitch thus far appears to be totally on the natural/organic rather than functional side with limited targeting of supplements and ‘functional’ foods and beverages in their messaging. One would suspect that the K.I.S.S. rule has something to do with market positioning in general so far, but I would certainly expect ad spend and marketing focus to increase as companies try to leverage and take advantage of the evolving consumer switch to organic.