The Overlooked Demand Opportunity in Organic

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In the last Organic Insider, we wrote about the supply side of the organic food industry and discussed a key requirement for reversing the decline in U.S. organic farmland.

This week, we are focusing on the demand side of the equation — and it has tremendous relevance for every organic food company looking to grow revenue.

Thanks to FMI’s recently released The Power of Health and Well-being in the Food Industry report, we can now attach a datapoint to something that is generally quite amorphous — brand and product storytelling.

Leveraging previous FMI reports and surveys, the chart below shows the key factors when shoppers are making a purchasing decision.

KEY OBSERVATIONS

* Not surprisingly, price is at the very near top of the list at 84%, and that is unlikely to change. Price will remain extremely important for the foreseeable future.

* Product claims such as “organic” sit at 54%, and what this points to, as we have discussed repeatedly over the years, is that most consumers do not adequately understand the value proposition of organic. As a result, they seek out inferior claims, such as “natural” and “preservative free,” ahead of organic.

Sadly, in the absence of a national branding and advertising campaign for organic, that dynamic is unlikely to change. Additionally, it is far too onerous and expensive to expect any single organic brand to take this on.

* “How the product was manufactured or grown” sits at 57% — and therein lies the opportunity for organic brands.

It is also precisely the reason that the Regenerative Organic Alliance partnered last year with nutrient density testing platform Edacious.

“This brings us one step closer to proving what farmers have long understood: that how we grow our food matters,” said Christopher Gergen, CEO of the Regenerative Organic Alliance. “By generating measurable data around nutrient density and toxicity, we can better demonstrate the true value of Regenerative Organic Certified® farming and products for human and planetary health.”

That being said, not all storytelling depends on such nutrient density data. Furthermore, taste and smell, two of the strongest indicators of nutrition — which is directly impacted by how a product is grown — simply cannot be quantified in any meaningful way.

The big takeaway from the FMI report is that when marketing an organic product to consumers and trying to impact purchasing decisions, telling the story of how it is grown or produced represents real and untapped revenue potential.

Farmers understand that how food is grown matters, and it is to our collective benefit to ensure that consumers know this as well.

With gratitude, Max Goldberg, Founder