Are Rising Prices Causing Consumers to Cut Back on Organics?


Amid unprecedented costs for commodities and fuel, organic food prices spiked as much as 25 percent on the retail shelves between April 2007 and April 2008, reflecting a supply crunch that is hitting companies in nearly every food category and at every point in the distribution chain. “It is, without a doubt, the most dynamic and volatile period I’ve seen in my 25 years in the business,” Gary Hirshberg, CEO of Stonyfield Farm, the world’s leading organic yogurt producer, told Nutrition Business Journal in a recent interview. “There has been nothing even close to this in comparison, and I don’t see it ameliorating any time soon.”

A weakening dollar has compounded the problem, making it harder for some companies to import goods. And many fear that the recently passed Farm Bill (and its large subsidies for growing corn for ethanol) will sway more conventional farmers to stay put, rather than convert to organic. Some farmers have already begun to jump the organic ship, worsening the supply crunch as they switch to a conventional farming industry that is looking more lucrative than it has in years.

So how are consumers responding to rising organic food prices? NBJ uses interviews with Stonyfield Farms, United Natural Foods Inc., the Hain Celestial Group, Vitamin CottageNatural Grocers and numerous other organizations invested in the U.S. organic industry and an analysis of the latest SPINS data to explore this issue in its annual Nutrition Industry Overview issue. To order your copy of the issue (which will publish in July) or to subscribe to NBJ, go to www.nutritionbusinessjournal.com.

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