Organic Consumers Want Stories, Not Stats

By Laurie Demeritt


In 2003, 66 percent of U.S. residents reported being users of organic products. More than 40 percent of those (or 27 percent of the total population) reported being regular (i.e., weekly) organic users. When considering reports on the increasing purchase of organic foods and goods, it is important to remember that many organic users only buy organic on an occasional basis, which helps explain why organic food and beverage represents only three to five percent of overall food and beverage retail sales (Figure 1).

Figure 1. Organic food and beverage represents only 3-5% of overall food and beverage retail sales.

The number of daily, weekly and monthly users has steadily increased since 2000. New consumers are entering the organic category and experimenting with a variety of products, while consumers who were using organics only occasionally in 2000 are increasing their frequency of purchase. This decreases the number of organic consumers formally classified as periphery users and adds them to the mid-level consumer group.

In the world of organic food and beverage, the intensity and meaning of organic varies depending upon which consumer segment (core, mid-level or periphery) is participating. For example, core consumers who have adopted organic foods have done so with the expectations that the food has been grown and cared for with intent to take care of the land and the recipient’s health. For the periphery, organic may simply mean something “new” with only vague health benefits.

Of the 66 percent of U.S. consumers who say they use organic products at least occasionally, the breakdown by segment is as follows: the core represents 21 percent of organic users, the mid-level represents 66 percent of organic users, and the periphery represents 13 percent of organic users. Looking at the segments of core, mid-level and periphery, we find that periphery users tend to purchase organic products occasionally and limit their purchases to just one or two product categories (usually produce, meat or dairy). Those choices are usually of particular importance to their personal or familial health.

Mid-level consumers are responsible for the largest organic growth in the market as they account for the increase in frequency of consumption (moving from occasional usage into monthly and weekly usage) from 2000 to 2003. Specifically, they are buying more of the gateway product categories, including produce, dairy, baby food and meat. They are also moving into new processed foods categories, such as juice, single serve beverages, cold cereal and snacks. This evolution from using just a few product categories, to experimentation with an expanding variety of categories is usually done in a very predictable manner by mid-level consumers.

Finally, core consumers account for the majority of daily usage. These consumers have tried to make “all things organic” in their lives and the consumption of organic food and beverage is part of their everyday ritual.

Organic Category Adoption Pathways
Based upon years of research, evidence shows that consumers adopt organic products in an evolutionary manner. They do not jump in with both feet but rather experiment with a small number of organic items before buying widely across a number of product categories. This evolution can be identified using specific areas of adoption. The four organic category adoption areas, or pathways–gateway products, low-risk decisions, convenience foods and “all things organic”–are listed in Table 1, along with the types of organic products typically adopted by consumers along this progressive pathway.

Table 1. Organic category adoption pathways in order of progression.

The first level of organic adoption is largely based on notions of avoiding hormones, antibiotics and pesticides. We find that children heavily influence this first area of adoption as parents attempt to protect their children, especially in the early years (deemed most critical) as the child is developing mentally and physically. These are also categories for which consumers are most able to make a link between the concept of “organic” and food. In many consumers’ minds, organic means “fresh.” The further away from “fresh” or “perishable” a food and/or beverage is, the less likely the early adopters are to make a significant connection to the organic process.

The second area of adoption focuses on products that are perceived to be a relatively low-risk purchase decision, such as single-serve beverages and pretzels, chips and other snacks, or that are child-focused products, such as juice and cold cereal. The snack category is an area where consumers still want to indulge, but want to do so in a way that makes them feel just a little bit better about the product, so they buy organic. In this second area of adoption, consumers start to move toward center store items rather than just fresh items located in the perimeter of a store.

The third area of adoption is more specific to high mid-level and core organic consumers. These consumers have made significant changes in their food habits and are becoming more experimental. Convenience foods play a key role in this phase of adoption as consumers attempt to make many of their meals using at least some organic ingredients.

The fourth area of adoption indicates full adoption of an organic lifestyle. These core consumers have made a complete transition in an effort to make all things organic. They seek organic products in the processed and packaged goods section of the store even when some categories only have limited, and often expensive, organic offerings.

As detailed, the closer a product is to “fresh” in a consumer’s mind, the earlier they are likely to adopt it into their normal routine and purchase it more frequently. “Fresh” does not always have to be objectively fresh, but can be signaled using attributes such as see-through packaging, location near the refrigerated section of the grocery store and location near the perimeter of the grocery store. Cross-merchandising also can help manufacturers leverage fresh attributes. For example, a snack manufacturer should try to merchandise next to the fresh salsas or guacamoles or even near the cheese section. Fresh category and product adjacencies are among the easiest ways to influence the consumers’ perception of fresh.

Segment Marketing: Focus on the Middle
While core consumers are not typically the primary target for most companies, due to the small number of consumers in the segment and the intensity with which they are involved in the lifestyle, companies should have a clear understanding of who they are, relying on them as key figures and drivers of broader organic “food culture.” Core consumers’ interests, tastes and preferences will eventually trickle down to shape the preferences of the mid-level and periphery organic consumers.

Given the ever-expanding consumer interest in food culture, evidenced by cited readings of Fast Food Nation by Eric Schlosser, increased subscriptions to food and cooking magazines, and devotees of retailers such as Trader Joe’s and Whole Foods Market, we see the mid-level consumer segment as the largest potential conduit for a rapidly expanding consumer base.

There are a number of reasons why the mid-level consumer offers the largest opportunity for manufacturers and retailers:
• Mid-level consumers are just beginning their organic journey. Their enthusiasm for new products translates to an experimental and active consumer.
• Mid-level consumers are searching for simple and convenient nutritional solutions for themselves and their families. These consumers increasingly believe that organics are more nutritious.
• Mid-level consumers consider prevention and treatment solutions, and are looking towards organic as a means for both.
• Mid-level consumers are becoming more patient. They are willing to take the time to learn about food and believe in long-term strategies towards addressing health and wellness.
• Mid-level consumers are willing to spend a bit more on products that provide clear benefits and/or peace of mind.
• Mid-level consumers trust larger companies to do adequate research and distribute high-quality products.
• Mid-level consumers are the largest segment in terms of quantity of consumers and are rapidly increasing the frequency with which they use organic food and beverages.

Periphery organic consumers exhibit similar lifestyle characteristics and values as the mid-level but are simply less involved with activities related to health, wellness and food interests. These consumers will require a significant trigger (e.g., health trigger or access to an organic “guru” in their social network) in order to increase their level of activity in the world of organics. Core consumers also exhibit similar lifestyle characteristics to mid-level consumers but are more intensely involved with activities related to health, wellness and food interests. Core consumers are also more interested in values associated with community, environment and issues related to social sustainability.

Therefore, most organic product manufacturers and retailers should focus on appealing to the mid-level consumer. The key here is not to attempt to educate the consumer. Mid-level consumers do not want to be told about the technical or certification processes around organic. In fact, in many cases, they do not care much about the true meaning of organic. Rather, what they want is a story or narrative about the product: Where was it made? Who made it? Why was the company started? What types of other consumers use the product? This narrative is what provides the true emotional connection to the consumer.

Once the mid-level consumer has made a connection with a narrative, their allegiance to the brand strengthens considerably and they tend to spread positive information about the product throughout their social network of friends, family and colleagues. Identifying the narrative most appropriate for your brand is key to capturing the mid-level consumer.

Laurie Demeritt is President and COO of The Hartman Group, a leading consulting and market research firm specializing in the analysis and interpretation of consumer lifestyles. Demeritt can be reached at laurie@hartman-group.com.