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Organic Food Trends 2011 - Growing

The Benefits of Organic Food - a Lifestyle Choice

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Organic Food Trends 2011 - Growing

TABS Group Organic Survey Average Number of Organic Categories Claimed to Purchase by Age Group

TABS Group

Organic Food Trends 2011 - Growing

According to the annual TABS Group Organic Product Survey, more consumers bought organic food in 2011 then anytime since 2008 and total sales are up 15 to 20 percent over last year. This huge growth is being driven by greater preference for organic staples like milk, meat and egg as well as consumer buying a larger variety of organic products. Organic sales overall rose from 39.8% in January 2011 to 41/8% in January 2012 - 5% increase

  • Organic beef increased by 48%
  • Organic ice cream increased by 44%
  • Organic hair care products increased by 28%
  • Organic vegetables increased by 26%
  • Organic milk increased by 25%
  • Organic eggs increased by 21%

Current Food Trends in Natural and Organic Foods

I spoke with Dr. Kurt Jetta of the TABS Group to discuss the TABS Group Annual Organic Survey. The TABS Group are experts in consumer analytics, which really means they mine mountains of point of sale data and household panel data to help explain consumer behavior. They are experts in consumables (CPG) and how people are shopping.

Kurt said "We are a different company and are skeptical of conventional wisdom and the hype. We are innovative in how data is utilized with metrics and tools to predict the future."

For example Kurt discussed an industry annual vitamin study that claimed a category size of $27 Billion category. They were skeptical of the data and found out that the category was only $12 billion. Channels of distribution actually were skewed to general channels of distribution vs. specialized channels. (the Vitamin Shops of the world)

We all know the extent to which the Baby Boom generation impacts the economy and new product development. An interesting food trend is consumers earning less than $30,000/year and people with children purchased more organic products than higher earners and those without children. This is a reversal of parents and organic trends from 2010.

How Do They Predict Organic Food Trends?

"In our research, TABS infers consumer sentiment from average number of product types purchased and this data suggests Organic consumers are more involved. So the big story is not JUST more users but it is more users in the category that are MORE committed to Organic" according to Kurt. This removes the phenomenon of consumers telling you what they think you want to hear.

So for the last 4 years the hype was Organic is growing and how do food & beverage brands know if that hype is correct? Retail buyers are telling TABS that in the past, the "Organic" sections were not moving but now Organic is finally turning around. Kurt says "the one area that answers why Organic is moving up is the price gap is narrowing". I notice that the price gap shrinks measurably when Organic is on sale and that is a strong motivator or reason to buy for the consumer. Expect to see this gap narrow as Walmart rolls out their Front of Package Labeling effort in healthier food options and Walmart is the supply chain expert in bringing prices to an affordable level.

Benefits of Organic Food - a Lifestyle Choice

I tell clients and my students that consumers buy for reasons beyond features and benefits. Yes Organic is still more expensive but the driver here is not just income… of course there is a threshold affordability issue here. However just because a consumer has significant income does not mean they will be eating healthier. Healthy eating is a lifestyle choice first and then an economic issue. Just look at the parking lot of your local Whole Foods and you will see a wide range of vehicles that are not just limited to expensive cars… there are plenty of Chevies and Fords!

How to Benefit from Current Food Trends - Takeaways

Look more closely at testing the price gap theory in your brand. Move to get the gap smaller on your organic brands. Pricing is something you can change quickly and can be tested through limited in-store price promotions.

Consumers who see the benefits of organic foods are more likely to buy across categories, so can you take advantage of this? If you are a grocery retailer, consider a dedicated organic aisle. If you are a consumer brand, get inspiration for innovation from brands like Neutrogena and Aveno who have successfully marketed both skin and hair care items (different categories) under their brand umbrellas. Also look to Sunkist… their model is licensing all things orange.

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  5. Organic food trends 2011 from the TABS Group Annual Organic Product Study shows more lower income groups see the benefits of organic food and one variable is the narrowing price gap between organic and non organic foods.

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