Organic marketing
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Transcript of Organic marketing
Traditionally, the organic market has been
composed mostly of small-scale producers
who sold their products directly to
consumers or through small, specialized
local health food stores and coops.
Since the implementation of the
NOP, marketing outlets for organic
products have expanded widely.
The majority of organic food is now
sold through large supermarkets.
Organic food sales have increased
an average of 20% per year and are
expected to make up 5% of food
sales by next year.
Nationally, large farms tend to rely
on advance contracts and high
volume retail sales. The largest fresh
produce farms are vertically
integrated as packer-shippers,
paralleling the conventional
channels for distribution.
Paraphrased from
Exports
Exports are an increasing market for
organic food.
For example, “Canada is a major
destination for exported US organic
product with organic food sales
approaching $1 billion.”
Quote from
Major Market Channels for
Organic Produce
Wholesale-national scale
Wholesale-statewide/regional
Direct sales to mid-sized markets-
stores, schools and food service
Direct sales to consumers-tailgate
markets, roadside stands
CSAs
National Organic
Program
The NOP was developed “to assure
consumers that agricultural products
marketed as organic meet consistent,
uniform standards.”
NOP includes detailed instructions on how
retailers must store, label, and display
organic.
Use of the Organic Seal
This seal may
be used only for
raw or
processed
agricultural
products as
described in the
NOP
regulations.
Import and Export Rules
The NOP determines how
imported and exported
organic products must be
defined, regulated and
labeled.
The USDA regulates
equivalency with other
national programs.
www.sarep.ucdavis.edu/organic/complianc
eguide/
Great section on marketing.
The Organic Consumer
The ‘typical’ organic consumer defies easy
characterization.
Most consumers who buy organic products
still purchase more non-organic products.
Most consumers know about organic food
and buy it on occasion.
The number of consumers who buy mostly
organic food is small and who buy organic
food exclusively is even smaller.
“Income is a factor—below a certain income, consumers have a diminished ability to pay a premium for organic food even if they are aware of and desire the benefits.”
“Education is more strongly correlated than income, with college educated individuals more likely to purchase organic food than those whose education was completed at the high school level.”
“Women are also more likely to buy organic food than men.”
Who Buys Organic Food?
Sales Growth and Where
“Sales have been growing in the double-digits
over the past decade.”
“Despite the small market share, the United
States is now the largest market for organic
food in the world eclipsing Germany, the
previous leader.”
“California is the state that both produces and
consumes the greatest amount of organic
food of any state in the US.”
Market Segments
“Fresh fruits and vegetables are consistently the most often purchased organic products.”
“Consumers are willing to pay a much greater premium for food primarily consumed by infants and young children.”
“Milk, meat, and cereal products are experiencing rapid growth.”
www.localharvest.org/
www.carolinafarmstewards.org
www.asapconnections.org
Local/Organic Food Locators
Coops
Potatoes:
Rose Finn Apple Fingerlings, 10 lb, $30, Watauga River Farm
Russian Banana Fingerlings, 10 lb, $30, Zydeco Moon
Yukon Gold, 25 lb, $32.50 Watauga River 50 lb, $50
Winter Squash:
Acorn, 18 lb, $20.00, Rose Mt & Zydeco Moon
35 lb, $38.00, Rose Mt & Zydeco Moon
Butternut, 18 lb, $20.00, Watauga River & Rose Mt
35 lb, $38.00, Watauga River & Rose Mt
Sweet Dumpling, 18 lb, $20.00 Rocking S Farm
35 lb, $38.00 Rocking S Farm
Pie Pumpkins, 18 lb, $20.00 Rocking S Farm
35 lb, $38.00 Rocking S Farm
Local Stores
Whole Foods
Earthfare
Greenlife
All the natural food coops
Fresh Market
Why not more of the large supermarket
chains?
Major Processors
Amy’s Organics
Hain Celestials
Lindey Mills
Braswell Foods
Wizard’s Cauldron
Gerber
Earth’s Best
Acknowledgements
This presentation address general organic production practices. It is to be
to use in planning and conducting organic horticulture trainings. The
presentation is part of project funded by a Southern SARE PDP titled
“Building Organic Agriculture Extension Training Capacity in the
Southeast”
Project Collaborators
• Elena Garcia, University of Arkansas CES
Heather Friedrich, University of Arkansas
Obadiah Njue, University of Arkansas at Pine Bluff
Jeanine Davis, North Carolina State University
Geoff Zehnder, Clemson University
Charles Mitchell, Auburn University
Rufina Ward, Alabama A&M University
Ken Ward, Alabama A&M University
Karen Wynne, Alabama Sustainable Agriculture Network