Consumer Awareness and Understanding of the USDA Organic Seal
By Laurie Demeritt
It has been almost four years since the U.S. Department of Agriculture (USDA) standardized the national organic labeling system on products so that consumers, in the words of former U.S. Agriculture Secretary Anne Veneman, “will know that the products labeled organic will be consistent across the country.”
One would have thought that by now, given the profusion of media exposure surrounding the seal at the time and the ongoing debate over standards since, that consumer awareness and understanding of the seal would be as prevalent as organic product usage itself. While awareness is certainly increasing, understanding is not quite as advanced.
Few would argue that the labeling of products as “organic” has played a vital role in establishing organics in the marketplace. With the presence of the USDA Certified Organic label, consumers now have a visual cue to help discern what it means for products to be “organic” and it provides a recognizable “seal of approval” to weigh purchase decisions.
In fact, the seal is becoming increasingly recognized and sought out at the shelf by consumers. Additionally, the seal is helping consumers differentiate between natural and organic products. The advent of the USDA seal has given legitimacy to organic that consumers do not ascribe to “natural” products.
The main difference between the product categories centers on the perceived lack of regulation and lack of certification of natural; therefore, in most food and beverages categories, organic is preferable to natural because it “means more” to consumers. Increasingly, natural is seen as “simply a marketing term” by consumers.
Today, 56 percent of all consumers are aware that the use of “organic” labeling on foods and beverages is regulated by the government. Unsurprisingly, core consumers (those most involved in organic foods) are most aware of the standards, while non-users are least aware (Figure 1).
Figure 1. “Were you aware that there are governmental standards regulating the use of the ‘Organic’ label on foods and beverages?” (All respondents; by organic consumer segment)
What Does the Label Mean?
Awareness does not necessarily translate into understanding. While more and more consumers are becoming aware of the organic label, many people remain unsure of what exactly the governmental standards are behind the label.
The Hartman Group conducts consumer analysis from what we term a “world perspective.” The individuals in the core of the world are those most active in a given sphere of activity, in this case the “organic world,” while those at the periphery are maintaining only minimal, infrequent and less intense involvement with that world.
A clear majority (62%) of core consumers who are aware of organic governmental standards report having a clear, or at least an increasingly clear, understanding of organic standards. By comparison, minorities of their mid-level (45%) and periphery (41%) counterparts make the same claim (Figure 2).
Figure 2. “How has your understanding of these governmental standards regulating organics changed over the past few years? (By organic consumer segment and organic users aware of organic governmental standards)
Consider also that when we include those consumers who are unaware that such standards existed, even fewer mid-level (28%) and periphery (21%) consumers report a clear (or clearer) understanding of organic standards, compared to 42 percent of core consumers.
Most people do not clearly understand what the USDA Certified Organic Seal means when they encounter it on a product’s label. In fact, among all consumers responding to our recent Organics 2006 survey, just 10 percent know the official definition of the “USDA Organic” label—namely, that it signifies a product that is at least 95 percent organic. While 27 percent thought the label guarantees that the product is purely organic, this is not technically the correct answer because to select “100% organic” meant you were excluding products that are 95% organic. Close to half of the respondents (43%) admitted they didn’t know its meaning (Figure 3).
Figure 3. “What does the USDA Organic Seal indicate when placed on a product?” (All respondents; by organic consumer segment)
Even among core organic consumers, only 24 percent know the correct meaning of the “USDA Organic” label. Non-users of organics were more likely than periphery consumers to know the correct meaning behind the USDA Organic seal. Among mid-level, periphery and non-users, the findings are largely as expected: the sub-groups of consumers most likely to know the correct meaning of the USDA Organic label are those reporting a clear, or increasingly clear, understanding of organic standards.
Does Awareness and Understanding Influence Purchases?
In our contemporary marketplace, an ever-increasing number of consumers are seeking healthier foods. Therefore, it is not surprising to find that consumer beliefs about organics vary across consumers, even among organic users. While an overwhelming majority (85%) agree that organics are more expensive than conventional products, most also feel that organics are healthier (70%), more nutritious (52%) and fresher (51%). Fewer
consumers believe that organics are better for avoiding disease (47%) and for protecting the food supply (45%), as well as being better-tasting (43%).
Consumers primarily look for the word “organic” on product packaging to make determinations about whether or not a product is truly organic. Despite confusion about what the USDA Organic seal means, however, it does serve as confirmation and a marker of authenticity (e.g., “the real deal”) for consumers, especially those in the core. About 42 percent of mid-level consumers are also more likely to look specifically for the USDA seal. Thus, the USDA seal does reinforce decisions that consumers are making at the shelf and provides a layer of comfort as they continue seeking new organic products to introduce into their households (Figure 4).
Figure 4. “How does/would the difference between a ‘USDA Organic’ label and a more general ‘organic’ label affect your purchasing decisions? (By organic consumer segment)
Creating a Brand Narrative to Get Consumer Connection
The USDA Organic seal is increasingly sought out by consumers who see it as symbolizing authenticity and a product that is distinctly different from “natural.” Therefore, if possible, most manufacturers should ensure that their products qualify for the seal in order to attract consumer attention at shelf. However, it is important to emphasize that simply putting the seal on your product isn’t enough. Although the seal is a “marker” that distinguishes your product from non-organic items, it still needs differentiation from the host of other organic options. Simply put, although the seal helps to get you into the consumer’s consideration set, you need to create a brand narrative to connect on a long-term emotional basis with the consumer.
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. Laurie can be reached at firstname.lastname@example.org.