The Evolving Organic Consumer
By Laurie Demeritt
Unless you’ve been out of the United States for a few years, nearly anyone involved in the production and sale of organic products knows that the organic marketplace continues to grow at double-digit rates. In fact, the Organic Trade Association (OTA) reported recently that U.S. organic food sales have grown 17 to 21 percent annually since 1997. Compare that to 2 to 4 percent growth for total U.S. food sales during the same period. While organic remains a strong category and sales continue to grow, every industry has periods of time when the growth may slow or shift in some way, and it is always wise to pay attention to these changes.
The Hartman Group’s latest report, The Many Faces of Organic 2008, shows that out of 2,161 U.S. adult consumers surveyed, the number of consumers who said they had bought organics in the “past few months” had actually dropped by four percentage points, from 73 percent in 2006 to 69 percent in 2008.
This is not to say that the organic market is expiring—far from it.
Even in these recessionary times, there are still cultural concerns for quality and health, (especially for children, personal and family welfare) and based on our consumer interviews we find that consumers resonate more strongly today than ever before to fresh organic categories offering the perceived benefits of being “free of” a wide variety of suspected negatives (e.g., hormones, pesticides, genetic modifications, etc.). These fresh organic categories include dairy, fruit, vegetables, prepared foods, meats, breads and juices. We find this to be especially true within the “Core” of the organic market, composed of consumers who are continuing to increase their purchase and use of organics across a wide variety of categories.
Participation in the World of Organics
Currently, over two-thirds (69 percent) of U.S. adult consumers are part of the “World of Organics,” or those who buy organic products at least occasionally. About 28 percent of organic consumers (or about 19 percent of the adult population) are regular (i.e., at least weekly) organic users. Still, it is important to remember that most organic users only buy organics on an occasional basis, and compared to data from 2006, some changes have taken place in organic food and beverage usage in the United States. Since 2006, the percentage of Americans using organics regularly (at least weekly) has shifted slightly (though not a statistically significant change) from 23 percent in 2006 to 19 percent in 2008 (Figure 2).
Based on ethnographic, linguistic analysis of consumer conversations surrounding organic usage, overall consumer interest in “organic” may be changing primarily because the term “organic” has come to mean so many things to consumers that it represents no one thing for everyone. Also combine the premium required for most organic food and the growing economic constraints on average Americans—including the rising cost of food in general—and it is entirely possible that heavy usage of organics is becoming too expensive for many Americans, especially in categories that they consider nonessential. In essence, over the 2007 to 2008 period, consumers were already starting to make tradeoffs in terms of organic categories that matter and those that don’t. The recent economic downturn has only intensified this trend.
Organic Consumer Lifestyle Segmentation
Of the U.S. consumers who use organics, the majority (65 percent) is made up of Mid-level organic consumers, with smaller segments at the two extremes: 21 percent are Core consumers and 14 percent are Periphery consumers (Figure 3).
Among these consumers within the World of Organic Food and Beverages, the intensity and meaning of “organics” varies depending upon which consumer segment is participating. Core consumers, for example, who have adopted organic foods, have done so with the expectations that the food has been grown with the intent to take care of the planet and the consumer’s health. In contrast, “organic” for the Periphery consumer may simply mean something “new” with only a vague understanding of any health or environmental benefits.
Changes in Organic Usage within Segments
As shown in the “Hartman Core to Periphery World Model” on page 15, organic consumers are broken down into three categories, Core, Mid-Level and Periphery. In the 2008 study, a “regular” user of organics is defined as someone who uses organic foods or beverages at least weekly, and the Core consumer is most likely to be a regular organic user (75 percent are), while occasional usage (monthly or “occasionally”) best describes the Mid-level and Periphery consumers.
This wasn’t the case in 2006, when just over half (54 percent) of Core organic consumers were regular users and the majority (60 percent) of regular users were in the Mid-level.
The findings of the Many Faces of Organic 2008 report clearly show that the Core organic consumers of today are more intensely involved in the World of Organics than were those of just a couple of years ago. The transitions in usage frequency over the past two years are:
• Core organic consumers are intensifying their usage, as the number of regular (at least weekly) users has increased from 54 percent in 2006 to 75 percent in 2008.
• Mid-level organic consumers have decreased from 37 percent to 26 percent. This could represent a cooling off, or it could mean that some of these consumers have moved up into the Core category and intensified their usage.
• Periphery organic consumers have grown from 16 percent in 2006 to 25 percent in 2008, reflecting a slight upswing in those using organics at least monthly.
Considering that there are fewer regular (at least weekly) users of organics now (19 percent of all consumers) than in 2006 (23 percent), there seems to be a widening chasm between today’s Core organic consumers and those in the Mid-level. This implies that while those remaining in, or recently entering, the Core of organics tend to be deeply entrenched in the organic lifestyle, many of today’s Mid-level consumers are having second thoughts about how “deep” they want to go into organics at this point in time. Aside from the most deeply involved organic consumers, many others purchasing organics are picking those categories that resonate most strongly to cues of freshness or health (such as fruits, vegetables or milk) and are no longer considering more frivolous purchases (such as organic cookies).
Many factors are currently at play to influence these changes in organic food sales. A renaissance within the culture of food itself has brought increasing cultural focus on formerly fringe food categories, notably local and artisan products, as well as categories that may link by dotted lines to organics, but can also stand on their own (such as fair trade, humane, cage-free or free-range). Another partial explanation comes from the qualitative interviews conducted for this study, which suggests that consumers are becoming overwhelmed by the many meanings of organic.
While “organic” is still an important cue to millions of consumers for products that contribute to healthy lifestyles (especially for households with children), conventional culture is now including organic as one of several distinctions of equal importance subsumed under the term “quality.” Related to cultural concepts of high-quality foods, the concept of “fresh products,” while linked intrinsically to organics, is also shown in this report to have moved to the forefront of importance for conventional consumers. As consumers continue to evolve, it is clear that the increasingly involved segment of Core organic shoppers will gain importance to marketers of organic brands, since their commitment to the category is only intensifying.
Laurie Demeritt is president and COO of The Hartman Group (www.hartman-group.com), a leading consulting and consumer insights 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.