Organic Food Producers Face Tough New Challenge

Added: (Thu Jun 14 2001)

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ORGANIC FOOD PRODUCERS FACE TOUGH NEW CHALLENGE
Britain’s organic food producers will have to face up to a brand new challenge if the high growth rates the market has experienced in recent years are to be maintained in the future…

That was the warning given by Graham Keating, managing director of Yeo Valley Organic, at the fourth ‘Going Organic’ conference, held in London on June 14.

“Current organic food producers have done an outstanding job in introducing consumers to natural, chemical free food,” he told the audience of growers, manufacturers and retailers, “but now they face the biggest challenge yet -- attracting and converting ‘dabblers’, younger shoppers who currently have little organic awareness and are wary of organic hype, to become committed consumers.

“This will need positive action by farmers, producers, retailers and the Soil Association,” he explained.

“Products will have to have strong and authentic organic credentials; retailers will have to merchandise organic foods in a way which appeals to both the committed and the new consumer; tangibles like taste and value for money will have to be obvious and everyone involved in organic food will have to be professional in raising awareness of the organic message.”

Yeo Valley Organic’s rise to become the country’s biggest organic dairy company and one of the grocery trade’s fastest growing food brands has been outstanding. A family owned business, it produced its first organic yogurt in 1993; established its current organic dairy in 1997 and today has a market share five times that of its nearest organic rival.

The company’s research shows that most of today’s organic demand comes from committed consumers who are most likely to be aged 45 and above. They are still extending their consumption, so buying a wider range or products and spending more each week on organic food. Their product repertoire grows as new organic offerings arrive in food stores, but longer established sectors are now starting to have slower growth as the market becomes saturated.

To extend the organic business, a new, younger shopper needs to be attracted advised Graham Keating, predicting:

“These will be people aged 25 – 44, with less money to spend and their purchasing is likely to be lighter and less frequent. They are the kind of people who will be principally motivated by a perception that organic food tastes better and they will expect organic products to be integrated with ordinary ‘conventional’ foods in-store, not located in an organic ghetto, which for some people might even create a perception that organic tastes less good than conventional products.

“Everyday low prices are not the route to the shopping trolleys of these new consumers. They will accept some price premium, provided it is realistic. Many regard 10% - 15% as a reassurance of organic quality. They are hungry for information and it is up to everyone in the food chain to help provide it.

“Most of all, organic foods will genuinely have to be better. Dabblers won’t just buy organic foods for ethical reasons, though food scares, such as media coverage about GM ingredients, do help encourage trial. Organic food producers will have to tell people why their products are better, the products themselves will have to deliver the promise and retailers will have to present them in ways guaranteed to encourage trial.”

14.06.2001


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