In the late 1990s, The Hartman Group, in a groundbreaking report, said that the organic category represented one of the most significant success stories of the food and agricultural products industries in recent years. At the time, organic had yet to realize its potential and was still little understood. In these early years, actual demand fell short of matching inherent desire for organic products because of limited availability, uninspiring quality, poor awareness and high pricing.
By 2006, the big headlines of the day reflected a much different picture of the organic proposition when Walmart announced it was integrating organic products into a wide variety of category offerings in food, drug and apparel. From our perspective and understanding of consumers’ perceptions, it was never a matter of if a giant retailer would one day take organic products into the mainstream but when and how.
We’ve been reading the organic tea leaves for quite some time now. Because of The Hartman Group’s cultural approach to research, we’re often been ahead of trends. Therefore, we could predict that organic would go mainstream years before others realized it since the key to understanding the factors driving growth of organic products is to first understand the organic consumer.
Our research has revealed that as consumer involvement with organics has grown, we encounter an ever-expanding body of interpretations, understanding and practice around the notion of “organic.” Even as few as five or six years ago, Hartman Group CEO, Laurie Demeritt recalls explaining to companies that consumers see organic as more about health than the environment. “They’d put pictures of the earth on products,” she said. “They assumed people wanted to save the world, but we saw the issue as moms wanting to feed their families better food.”
Organic remains a resonant symbol of food quality (a sort of shorthand for higher-quality food) particularly as it pertains to food being grown naturally. Today, organic products still signal “better” to even the most skeptical consumers. The heart of the meaning of organic lies in more natural growing methods, which consumers broadly understand to be legally regulated (unlike many other claims). However, organic products also retain halo of being foods made with more care and in greater alignment with their values.
While the absence of pesticides and other farm-based “chemicals” is the primary motivator for organic purchase in store, the package of organic meanings has allowed consumers to use organic as a simple heuristic for “better food.” They believe they can feel good about their organic purchases from a nutritional and ethical perspective.
Bucking Headwinds of the Past
While motivations for purchasing organic food and beverage products are firmly rooted in a pursuit for higher quality with strong ties to health and wellbeing, many of the barriers to purchase of the past continue as present-day barriers. For one, the purity of organic’s meaning is under threat. This stems consumers’ perceptions on organic that relate to three key ideas:
Unfortunately, the crispness surrounding organic production values are being compromised by the ubiquity of organic products themselves, including the presence in “less healthy” categories. Consumers are also finding alternatives to organics at a more palatable price point within natural foods. Thus, the ability of organic products to differentiate and justify a price premium may be threatened.
All is not gloomy, there is an upside for the organic market. Younger consumers, particularly Millennials, are more likely to be organic buyers underscoring ongoing relevance and growth in the years ahead. Another bright spot lies in the democratization of organics at retail. Consumers appreciate mainstream retailers democratizing organic, demonstrated by their increased purchasing of organic food and beverage products at traditional grocery and their growing purchase of organic private brands.
Looking ahead, consumer culture sees nature, rather than science, as the route to a better world, particularly in food. Consumers will support companies and buy products that see the world the same way as they do. While organic will remain a complex topic for consumers to navigate, common sense and trust serve as important guiding lights in understanding, adoption pathways, purchase decisions, and channel selection.
As leaders in the study of American food culture, The Hartman Group has been tracking how Americans shop for food since the 1990s. From one-stop shopping to multichannel shopping to online markets and click-and-collect, we continue to track consumers’ evolving perceptions, needs, habits and relationships with food retailers. New to the 2017 report is a special section on the expansion of the discount grocery channel, the emerging fresh-format channel and smaller-footprint retail formats.