How transparency and technology ignited the organic revolution
Editor's note: Dan Wilkinson is the chief commercial officer of 1WorldSync. He works with leading brands to identify their pain points and successfully manage their product information, driving efficiency and revenue growth. He has more than 20 years of strategic business development and general management experience. He started his career at General Dynamics in 1986, and held senior positions at companies such as Nortel Networks and Juniper Networks.
For organic foods, both acceptance and availability have become mainstream and are having a deep impact on the food industry. No longer just for the uber health-conscious or elite, the organic food industry has recently undergone a complete democratization. The booming U.S. organic market posted new records in 2015, with total organic product sales hitting a benchmark of $43.3 billion, up a robust 11 percent from the previous year’s record level and far exceeding the overall food market’s growth rate of 3 percent, according to the Organic Trade Association’s 2016 Organic Industry Survey.
Organic products have shifted from being a lifestyle choice for a small share of consumers to being consumed at least occasionally by the majority of Americans. On a global scale, the market for organic, functional, allergen-free and better-for-you foods will reach a record $1 trillion in 2017, according to Euromonitor International.
How did the annual growth of organic food sales for the nation manage to exceed 10 percent, despite the so-so growth rate of the overall food market? Several factors — such as where they’re available, the rate of demand, pricing, and even technology — have played a role.
No longer relegated to health food markets, bottom shelves or tiny produce bins, organic foods — packaged or fresh — are shelved next to conventional items. According to the U.S. Department of Agriculture, organic products are now available in nearly 20,000 natural food stores and nearly three out of four conventional grocery stores. They are even found in convenience stores and in the institutional food sector, in places such as corporate cafeterias, hospitals and nursing homes.
"If it's available, I'll always buy organic over non-organic foods," Lisa Corso of New York said while shopping recently at Fairway Market. She regularly buys organic fruits, vegetables and dairy products. Her main concern is avoiding pesticides and added hormones. “I don’t go out of my way to buy it, but if I see it when I’m shopping, I’ll buy it and try it," said Corso.
Consumers like Lisa are getting more chances as the market continues to integrate more organic-friendly options.
Demand for organically produced goods has risen dramatically. Nearly 45 percent of Americans now actively seek organic products. Fueled by the desire for greater health and quality of life, consumers want to know exactly where their food is coming from.
As product information becomes more transparent and accessible, consumers are made aware of just how many ingredients, harmful or otherwise, make it onto their plates and they have collectively decided to choose organic or more natural products.
Consumers are also actively avoiding foods grown with pesticides, GMOs and other allergens. More than 170 foods are known to cause immunoglobulin E mediated food allergies. In the U.S. alone, eight of these foods or food groups account for 90 percent of serious allergic reactions: milk, eggs, fish, crustacean shellfish, wheat, soy, peanuts, and tree nuts. Consumers read food labels and seek products with high nutritional value and as few as possible synthetic or non-organic ingredients.
“My son is allergic to nuts, milk and strawberries,” said Leigh Devlin of Aliso Viejo, CA, “You bet I read labels.”
The barriers to purchase are disappearing as well, with prices for organic food becoming more consistent with their non-organic counterparts. A study last year of organic food prices conducted by Consumer Reports found that some organic products were the same price as their conventional counterparts, and in some instances, actually cheaper.
“It doesn’t seem so expensive anymore. And even with some products, I don’t mind so much,” said Kristen Agaman of Reno, NV. “I'd rather spend a little more now and be healthier later.”
The connected shopper
Technology brings resources, information and transparency. Consumers are more educated about nutrition, health and food quality than ever before. They have access to virtually any food product imaginable, along with all the information about each product with a simple click or tap. They are also generally accustomed to shopping when they want, how they want and where they want.
Innovative startups, such as Instacart and ShopHero, as well as top technology companies, now offer same-day grocery delivery in select markets, removing the barriers of inconvenience and time for many consumers. In addition, retail behemoths such as Walmart and Kroger are expanding their online grocery shopping avenues.
The organic industry has moved beyond being a niche market. Organic products occupy prime shelf space in big chain supermarkets and mainstream retailers, and are much more accessible and affordable.
Food giants like General Mills and Kellogg have also entered the organic game and many small organic food companies have grown into large businesses.
Today, according to the OTA, “It is the face of America. The demographics of the organic consumer are not any different than the demographics of America.”
The shift in consumer demand, industry awareness and technology will have a lasting impact on health and and happiness in the future.