Organic Consumers Association

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Cook Organic not the Planet Campaign

Organic Sector Still Growing Despite Economic Recession

Twice a month at Madison's Whole Foods store, marketing director Amanda Jahnke Bauer leads a tour of the grocery, pointing out ways shoppers can economize. Buy from the bulk aisles, purchase store-brand items, use coupons, she advises.

"We've been shifting a lot of our focus to value purchases because of the economy," Jahnke Bauer explains. "We know that people in general don't have the money to buy the luxury items they have in the past."

Call it the new reality of organic shopping. After a dozen or so years of double-digit growth, elements in the organic industry are feeling the pressure of rising food prices and a softening economy. National publications like Newsweek and USA Today see a trend.

Whole Foods, the largest U.S. retailer of natural and organic foods, has felt the downdraft. Financial analysts say its overly ambitious expansion policy has hurt the chain's bottom line, which was probably a factor in its decision last week to terminate plans to build a larger store at Hilldale.

To be sure, the old joke about "Whole Paycheck" is vexing for a company confronting consumers looking twice at price tags. Hence, Jahnke Bauer points to the new monthly newsletter, "The Whole Deal," highlighting money-saving tips for Whole Foods shoppers.

"People still want to buy organic, but they're shopping for value," says Eric Newman, vice president for sales at the Organic Valley farmers co-op in LaFarge. As evidence, he points to softening sales in the Organic Valley milk brand, but a spike in sales for organic milk the co-op markets to stores to sell under their own budget labels.

Business remains strong at the Williamson Street Grocery Co-op, but the store is seeing evidence of penny-pinching among customers, says communications director Brendon Smith. More coupons are being redeemed, and sales for grocery "specials" have doubled, he says.

"Some customers say our prices are expensive," says general manager Anya Firszt. "Well, it's not like we're gouging. It's the fact that more of the farmers' costs are being passed on to us."

Firszt makes a good point. The problem, as much as one exists, begins at the supply side of the organic equation. The worldwide demand for corn and soybeans has driven up feed costs for dairy and beef farmers, while higher fuel costs have added to their woes.

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