Consumer Culture and the Future of Organic Usage
By Laurie Demeritt
One of the significant challenges my research colleagues and I still encounter is that many in the organic world hold very narrow, restrictive views of the organic proposition—views shaped by the industry but which have little in common with actual consumer perceptions.
Often this narrow view of the organic proposition goes something like the following: The term organic is applied to distinguish foods grown without use of conventional chemical-based pesticides or fertilizers. This process is more costly and time consuming than conventional farming methods, often resulting in higher prices—and associated price premiums—for these products. For a small, but growing, body of consumers aware of the supposed health and environmental risks associated with consuming and/or deploying chemical based fertilizers and pesticides, the organic distinction is important enough to justify associated price premiums.
Unfortunately, for many in the industry this particular view has little in common with the increasingly disparate views held by actual consumers.
In fact, our most recent research reveals that as consumer involvement with organics has grown, we encounter an ever-expanding body of interpretations, understanding and practice all focusing around the notion of “organic.” Currently we’re finding that many consumers rely on organic as shorthand for a variety of attributes, including “better tasting,” “healthier,” “more real,” “less processed,” “fresh” or “local.” Others rely on organic products as a means of addressing a multitude of food allergies and fears, rational or otherwise. Still others equate organic with notions such as “sustainable.” And somewhere in the mix lies a small body of consumers who happen to share the traditional industry perspective.
The point is that the phrase “organic” no longer denotes an obscure lifestyle practiced by a homogenous group of like-minded consumers. Instead, it serves a multifaceted symbol representing everything from quality to health to ideology—and everything in between. Put simply, organic now means many, many things to many different people.
Not a Passing Fad
The October 2006 AdAge article, “Organics Fail to Yield Cash Crop for Food Giants: $14 Billion Category’s High Prices Turn Off Consumers,” compares the future of organic to that of the low-carb craze. However, making this apples-to-oranges comparison is more than a bit naive and lacks true understanding of consumer motivations.
Low-carb was sold on the benefits of the here-and-now. It was 100 percent about consumers seeking immediate, tangible, visible results: weight loss. By 2004, after researching the low-carb phenomenon with consumers, we found that lack of cultural legitimacy, and disappointment in low-carb maintenance and performance was the primary motivation behind consumers abandoning the category.
Contrary to this, organic is almost 100 percent about consumers seeking long-term, intangible, invisible results: prevention of cancer 20 years down the road, mitigation of the risk of children developing too quickly, etc. Consumers can’t point to specific results they have achieved from organic but they have a faith-based belief in its benefits. So, unlike low-carb, they don’t expect to see results, and therefore cannot be disappointed with the “performance” of organic.
Center Store Conundrum
In a world in which fresh options abound and consumers explore a wider variety of differing retail channels and shop more frequently, traditional packaged products increasingly appear like second-class citizens. Consumers are still opting for packaged or processed products for the sake of convenience but even when choosing these products in the store, researchers almost always observe a consistent, palpable feeling that the consumer is settling for the inferior, mediocre option. Organic packaged goods, which many consumers perceive to be tastier, fresher and simply better, are a way of injecting quality into what is becoming a graveyard for many retailers.
Based on research from our latest report, “Organic 2006: Consumer Attitudes & Behavior, Five Years Later & Into the Future,” we believe that conventional brands that introduce organic options and organic foods in general, will not have the typical “packaged foods curse.” Why? Because consumers buying organic products relate to the narratives and perceived positive benefits about these brands.
This is not to say that all categories or even products will resonate with consumers. Simply slapping the word “organic” on a conventional product’s label does not guarantee success. Within processed foods, it is important to look at the value of organic on a category-by-category level. For example, to some consumers processed, mass-manufactured pasta sauce may not be seen as having a lot of “value” as it relates to organic. It may be difficult for the consumer to connect a commercially produced product in a jar with something actually grown in a field (especially a well-established brand name consumers have more familiarity with as a conventional product). Or, for example, they may not use pasta sauce very often, and since the usage frequency is low, they don’t worry about toxicity building up from this product. They do eat cereal every morning, however, so because of the high frequency of use they buy organic in the cereal category. Ultimately, looking at the organic category in aggregate loses sight of what matters to consumers on a SKU-by-SKU level.
We also know there is a clear adoption pathway into organic. The mainstream organic market is still relatively new and many consumers haven’t “moved up” to new organic categories (i.e., from produce to cereal). This doesn’t mean that they won’t be adopting more categories over the next months and years; it just takes a while for this evolution to take place.
Organic Synonymous with Premium
Many of the most recognized organic brands in consumers’ minds, in fact, are not thought of as organic, but simply a premium product. This can be directly attributed to the compelling, authentic messages these companies deliver and the values that consumers expect and associate with organic. Thus, conventional brands thinking about making the transition would be well-advised to offer additional narratives/attributes on top of organic. For example, many “foodie” consumers like specially sourced ingredients or a unique taste profile.
As retailers such as Target and Costco have already demonstrated, there is a widescale demand for “goods of distinction” among U.S. consumers. Be they rich or poor, educated or not, all consumers seem to want quality stuff. Perhaps not every day or on every occasion, but most of the time we all seem willing to accept minor inconveniences (multiple trips to specialty stores, price premiums, etc.) for quality products.
A Word on Mass Markets
Wal-Mart and Safeway—which have the added attractions of both larger availability as well as lower prices—are already well ahead of the curve with their decisions to go organic. Wal-Mart is making organic more price competitive, thus reducing or eliminating one of the primary barriers for consumers trial and adoption of organic products.
While many continue to fret over whether or not Wal-Mart will enhance or dilute not just organic standards, but the spirit and symbolism of organics, research continues to show that the market is not static but fluid—ever-changing and constantly evolving. Consumers ultimately define and shape the market.
The Future of Organic
Contrary to what many naysayers would have us believe, organic will never really go away. It may slow down and something else may surface but it will continue to have importance at some level among consumers. Because of the clear adoption pathways, we can even go so far as to predict future growth as more and more consumers become more involved with organic. What we are viewing today through the lens of organic is actually the evolution of food quality. Organic on many levels is part of a much larger construct: a major shift in our food culture toward quality. Organic is not going to die like some fad; it will simply become even more of an integral part of the food culture landscape.
Laurie Demeritt is President and COO of The Hartman Group, a leading consulting and market research firm. The Hartman Group specializes in the analysis and interpretation of consumer lifestyles and how these lifestyles affect the purchase and use of health and wellness products and services. Their client base includes a number of Fortune 500 consumer packaged goods companies, pharmaceutical firms, and mass and natural food retailers. She can be reached at firstname.lastname@example.org.