Organic Food and Beverage Shoppers - US - March 2015
“Considering the typically higher cost of organic foods and beverages, consumers are increasingly hard pressed to justify the added expense. As such, sales have hit something of a plateau, where they likely will remain until consumers have a clear reason to turn to organics.”
– William Roberts, Jr., Senior Food and Drink Analyst
This report looks at the following areas:
- Manufacturers have not communicated organic benefits
- Organics should embrace non-Millennials as well
- Organic products must justify their added expense
The biggest selling point for organics is the perception that the products are healthier, much more so than any environmental or ethical reason. However, consumers appear confused about the benefits of organics versus products labeled as natural, suggesting manufacturers have failed to communicate organic benefits to potential (for that matter, to current) consumers. Organic brands will need to address consumers in a more open and transparent way to maintain credibility in this confusing market.
If organic prices decline, there could be opportunity in expanding organic awareness beyond more-affluent consumers; roughly half of consumers with a household income of less than $50K purchase no organic foods. With more mass merchandisers getting into organic food, the price points should drop. Walmart, for example, will reboot the Wild Oats brand, formerly associated with Whole Foods, as its organic option, an option the chain intends to sell at the same prices it sells nonorganic food, largely removing price as a barrier to consumers trying organics.
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