Use of organic foods has leveled out, report finds

For fruit and vegetable growers, shifting from conventional to organic production methods would take time, expense and education and require major changes in the way they grow produce. So the obvious question for them is whether organics is a passing fad they can ignore or an enduring feature of the future, something they need to adopt.

While consumption of organically produced foods has been increasing by 17 percent to 21 percent a year since 1997, organic food sales account for only 2.8 percent of total food sales, according to the Organic Trade Association. Total organic food sales grew from $5 billion to $16.7 billion in 2006, but that’s still a small part of the $600 billion total U.S. market for food.

Will the growth continue?

According to a new study from the Hartman Group released in July, there is evidence of a plateau in overall organic food sales from 2006 to 2008. The Hartman Group, located in Bellevue, Wash., has been tracking the organic food movement since 1998, when it did a benchmark study.

“Since our last study on organics (in 2006), the use of organic foods and beverages in the United States has leveled out,” the study says.

The number of consumers using organics increased from 55 percent to 73 percent between 2000 and 2006, but there has been no notable change between 2006 and today, according to the report.

The new study, the Many Faces of Organic 2008, is aptly named. Laurie Demeritt, president of the Hartman Group, said the study showed a leveling of “aggregate use of organic products across all categories,” and in the number of people using organic products somewhat regularly. But there is “still a lot of growth in some categories” – and one of those is fruits and vegetables.

The most significant motivators for organic usage are all related to consumer health. Consumers choose organic products to avoid pesticides, growth hormones, antibiotics and genetically modified products, Demeritt said.

But they also find less value in packaged and processed foods that are labeled organic. So demand is strong for organic perishable products – fresh fruits, vegetables, meat, dairy products, breads, juices and prepared foods – but not for boxed rice.

“Having an organic analog is not important for all products,” she said.

“In general, while prior to 2008 it was sufficient to assume that analogues of ‘conventional’ food and beverage products would sell if they were organic, the future for organics dictates a different picture,” the report says. “Manufacturers and retailers will have to develop specific understandings of those organic categories that consumers find relevant and those that they find uninteresting and even frivolous (e.g., organic truffles).”

Rising food prices over the last two years has also impacted organic food sales, Demeritt said. Since organic food generally costs more, consumers have made choices about when organics really matters to them. Price remains a “stated barrier” to more purchases of organic products.

Assessing the performance of organic products is made more difficult by the need to draw lines. Virtually nobody buys all organic products. A consumer can be defined as a “core organic consumer” by buying some organic products at least once a week.

The study showed, however, that core users are continually increasing their commitment to organic food, while those defined as in the middle or on the periphery were the ones whose purchases of organics declined over the last two years.

These are the customers who “are focusing their purchases on only the organic categories they care about,” the study says.

In part, a shift has been caused by a splintering of the word “organic.”

“Another partial explanation to flattening growth,” the study says, “suggests that consumer interest is waning as ‘organic’ comes to mean so many things to consumers that it represents no one thing for everyone.”

Some things are “connected to organics with dotted lines,” but can stand on their own: fair trade, humane, cage-free, free range. In that event, a person buying McDonald’s burgers feels “organic” because McDonald’s has a standard for humane slaughter of cattle. Buying locally provides an agreeable sense of “organicness” to many consumers.

The term organic, the study says, is “beginning to serve as a complex, multifaceted symbol representing everything from quality to health to ideology to everything in between.”

The study found that the “triggers” for entering the world of organics have remained the same for the last seven years.

There are three basic triggers: You or someone close to you being diagnosed with a health condition; having children or having a child transitioning to solid food; and social influence.

Becoming pregnant can trigger a shift to organics, as can choosing a baby food. Food allergies, diabetes, digestive problems, joint health and cancer can jolt a person toward organic food. Fears of food contamination play a role, especially as people share “scary stories” within their social networks.

“Entering college is also a common gateway,” according to the study.

Organic products enjoy a favorable reputation. Organic consumers associate organics with health, lack of pesticides, lack of growth hormones, absence of antibiotics, freedom from genetic modification, freshness, taste, localness, social responsibility, animal welfare, sustainable production and having a government-backed label of origin and certification.

“Despite confusion about what the USDA organic seal means, it does serve as confirmation – a marker of authenticity, trust and a ‘seal of approval’ for those consumers who are skeptical or uncertain about a product’s legitimacy and organic status,” according to the study.

The study was conducted from an online survey of 2,161 adult U.S. consumers in February and March.