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Industry Study on Why Millions of Americans Are Buying Organic Foods

Feedstuffs

March 29, 2004

Research roots out myths behind buying organic foods

By MICHAEL HOWIE

Feedstuffs Managing Editor WASHINGTON, D.C. -- Consumers are a fickle
bunch. When it comes to food, exercise and related health issues, they
often say one thing, tell their friends another yet do a third. In
addition, consumer surveys on attitudes and opinions of food don't always
match up to what's in the cupboard or refrigerator -- or the wrapper in the
trash.

"We find that people tend to answer surveys in the way they would like or
aspire to behave," said Laurie Demeritt, president and chief operating
officer of The Hartman Group, "but the reality is different."

In surveys, consumers may say one thing about genetically modified foods,
organic foods, low-carbohydrate diets and so on. What they are buying --
and who is doing that buying -- can be quite different and, in some cases,
be quite different than assumptions businesses may make. In a presentation
at the U.S. Department of Agriculture's Agriculture Outlook Forum in
Washington, Demeritt presented a paper on the myths and reality of who's
buying organic foods and why. The results indicate how assumptions of the
typical organic buyer are different than what some may believe and provide
a bit of insight into that ever-fickle consumer. To conduct the study, The
Hartman Group, a full-service consulting and market research firm based in
Bellevue, Wash., hired researchers, including anthropologists, to follow
consumers around -- everywhere from the grocery store to soccer practice
with the kids. Interviews and home inspections of cupboards and
refrigerators were also done.

The first myth Myth number one: Consumers buy organic foods because of
environmental concerns. Demeritt said yes, a segment of consumers does
include "environmental concerns" as a motivator to buy organic, but only
about 26% of them. Instead, she said, the number-one reason consumers buy
organic food is that they perceive it to be a better product, health wise,
than "regular" food. "Consumers believe it is a healthier product to give
to their family and friends," she said.

The second motivating factor is taste, which was cited as important by 38%
of consumers in the research. Food safety is third at 30%. The top two
reasons -- different from motivating factors -- consumers use organic
products is their concern over pesticides or other chemicals on the plant
side and antibiotics or growth hormones on the animal side, she said. The
main "triggers" for buying organic foods, she said, are having children, a
family member with a health condition (food allergy, cancer, etc.) and
social network influencers. Other triggers include what some believe is
common sense ("If pesticides aren't good for bugs, how can they be good for
us?") or assorted "urban myths" -- stories of potato farmers not eating
their own crops, for example.

The second myth The second myth: The only type of organic consumer is an
individual with a high education and high income who identifies himself or
herself as Caucasian. Demeritt said although people in that category do
indeed buy organic food, it is by far only a portion of organic buyers. She
said there is a high incidence of organic usage among African Americans and
Asian Americans as well as individuals of Hispanic decent. In fact, she
said, all three of those groups are more likely to buy organic than the
general population overall. (Those groups are also less deterred by price
and more motivated by family reasons.) In addition, she said, more than
half of "heavy" organic buyers have household incomes of less than $50,000.
(Heavy buyers purchase an average of nine organic products per month.)

Several factors play into the role of a more diverse organic buyer,
Demeritt said. Consumers feel they don't have any control over things in
the world, she said, and food choices are something they can control, and
buying organic makes them feel like they exercised a choice. Other factors
include media attention to organic foods, a transformative life experience
(severe illness), frustration with healthcare or an individual wellness
regime. In the world of organic consumer segments, Demeritt said, only 10%
of consumers in the U.S. would be considered "core" organic buyers. Some
people would consider this group to be "tree huggers," she said, which some
people tend to falsely associate as the main organic buyers. This group
buys mainly for "community benefits" -- buying from local producers -- and
"authenticity" -- knowing what you are buying. "Mid-level buyers," who buy
a majority of organic products, though, make up 53% of consumers, she said.
Mid-level buyers are made up of people who buy for the "experience,"
Demeritt said, but also rely on "expert" opinions when it comes to food
choices. Convenience and price are also important to this group.
"Periphery" buyers, who make up the rest of the population, buy based
mostly on price and convenience when they purchase organic goods. All
groups, she said, consider "internal benefits" (health benefits) to be
important.

The third myth The third myth: The main reason that non-organic consumers
are not purchasing organic is price. In reality, the number-one reason
consumers do not buy organic foods is that they "had never really
considered them before," Demeritt said. Price is second on the list, she
said, but price alone isn't that simple, as people are a bit more pragmatic
about it. For example, she said, a mother may not have a problem spending
an extra $1.50 on organic strawberries for the kids, but she won't spend an
extra dime on organic broccoli for her husband. Basically, she said, if
there is a higher price on some organic foods, it depends on which product
category that product is in and if the consumer equates a higher value to
that product. Availability -- or a lack of availability -- is third on the
list of why people don't purchase organic food. Demerrit said the
availability in a store remains a barrier for mid-level consumers. This
doesn't only mean actual availability, but "perceived availability" within
the store. She said consumers shop habitually and are not actively looking
for new organic products. Therefore, she said, organic products shouldn't
be hidden in a "special" section of the store or confined to a specific
aisle. Organic products need to be out on the shelf with all the other
products, she said. The fourth myth The fourth myth: Brand recognition is
high and consumers recognize different organic brands. This is a huge
myth, Demeritt said, as more than 60% of consumers (mostly mid-level and
periphery) could not name a single organic brand. Instead, she said,
"organic" is the brand. On the buying side, she said, consumers would much
rather try organic foods if they had the same brand name as the original.
Frito-Lay, for example, has a "naturals" line that includes organic
Tostitos, Cheetos and so on. That is more appealing to that important
mid-level buyer, she said. Campbell Soup Co. has also done this. General
Mills, however, chose not to do this with its well-known Cheerios brand.
Instead, it created the Cascadian Farm brand, which sells "Purely O's," the
organic version of Cheerios. Demerrit said General Mills didn't want to
give the appearance that regular Cheerios were somehow inferior to the
organic version. Repeat purchases of organic brands are based almost
exclusively on a taste experience, she said. The fifth myth The fifth
myth: The attribute of organic supercedes all other purchasing attributes
(once a consumer buys organic, he or she will stick to organic or buy all
organic foods). Demerrit said that is not true, as consumers view purchases
as a series of tradeoffs -- making decisions about whether to buy organic
on a product-by-product basis. Consumers are looking for balance, she said,
and are buying many conventional items along with organic items. Consumers
typically start with organic produce, she said, and then "try" other items
-- such as dairy products, non-dairy products (soy milk) and baby food.
Each of those categories, and others, such as meat or canned goods, have
their own drivers, she said, and probably their own myths, too.
Copyright Feedstuffs, Miller Publishing Company