Table of Contents
Scope and Themes
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- What you need to know
- Definition
- Data sources
- Sales data
- Consumer survey data
- Abbreviations and terms
- Abbreviations
- Terms
Executive Summary
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- Organic food grows 142% during 2003-08, growth predicted to slow
- Natural, local, and private label pose challenges to organics
- Organic prepared and packaged food lead produce for top spot
- FDM channels account for 60% of sales
- Organic food market is driven by younger and higher-income shoppers
- Dean Foods leads all other manufacturers in organic food and beverages
- Organic ingredients appearing in a wide range of products
- The organic food consumer
- Supermarkets top shopping venues, but alternative options on the rise
- Fresh fruit and vegetables top organic purchases
- Importance of organic guarantee, relative unimportance of brand
- Reasons for organic consumption
- Thoughts about organics
Insights and Opportunities
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- Key points
- In challenging economic times, price matters even more
- To keep customers, keep emphasis on quality
- Are organic products really more healthful than non-organic products?
- And are they “better” than other options?
Fast Forward Trends
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- Trend 1: Universal Uncertainty
- What’s it about?
- Tomatoes (or jalapeños) and spinach = Salmonella and E. coli
- Chinese melamine crisis: uncertainty about the world’s milk supply
- What about Chinese organics?
- Trend 2: Learning through Play
- What’s it about?
- Organic products are healthful and can still be playful
- Play with your food; it’s good for you
Market Size and Forecast
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- Key points
- A number of factors impede growth of organic food market
- The rising price of food
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- Figure 1: Food price changes, by food category, July 2007-July 2008
- Stretching the dollar
- Market sales and forecast
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- Figure 2: Total U.S. sales and forecast of organic food at current prices, 2003-13
- Figure 3: Total U.S. sales and forecast of organic food at inflation adjusted prices, 2003-13
Competitive Context
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- Key points
- Two external competitors
- Natural food
- Locally grown food
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- Figure 4: Number of operating farmers markets, 1994-2008
- And one internal challenger: private label organics
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- Figure 5: New product launches, organic private label products, 2003-08
Segment Performance
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- Key points
- Fruits and vegetables, prepared food, share top billing
- Segment sales and forecast
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- Figure 6: U.S. sales and forecast organic food at current prices, by segment, 2003-13
- Figure 7: U.S. sales of organic food, by segment, 2006 and 2008
Segment Performance—Organic Prepared and Packaged Food
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- Key points
- A wide range of convenient products
- Organic prepared and packaged food sales and forecast
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- Figure 8: U.S. sales and forecast of organic prepared and packaged food, 2003-13
Segment Performance—Organic Fruits and Vegetables
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- Key points
- Fresh organic produce faces some obstacles
- Organic fruits and vegetables sales and forecast
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- Figure 9: U.S. sales and forecast of organic fruit and vegetables, 2003-13
Segment Performance—Organic Snacks
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- Key points
- Energy bars and salty snacks move market
- Organic snacks sales and forecast
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- Figure 10: U.S. sales and forecast of organic snacks, 2003-13
Segment Performance—Organic Grain Products
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- Key points
- High cost of grain products slows the market
- Responding to the needs of the gluten-free consumer
- Organic grain products sales and forecast
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- Figure 11: U.S. sales and forecast of organic grain products, 2003-13
Segment Performance—Organic Dairy Products
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- Key points
- A segment with many challenges
- Organic dairy products sales and forecast
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- Figure 12: U.S. sales and forecast of organic dairy products, 2003-13
Segment Performance—Organic Meat
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- Key points
- Organic meat challenged by a lack of pastureland, products
- Organic meat sales and forecast
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- Figure 13: U.S. sales and forecast of organic meat, 2003-13
Segment Performance—Other Organic Food
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- Key points
- A broad category
- Other organic food sales and forecast
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- Figure 14: U.S. sales and forecast of other organic food, 2003-13
Retail Channels
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- Key points
- Sales through FDM channels continue to be strong
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- Figure 15: U.S. sales of organic food, by retail channel, 2006 and 2008
Retail Channels—Food, Drug and Mass Merchandisers
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- Key points
- FDM channels dominate organic food sales
- Biggest competitors are natural products and private label lines
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- Figure 16: Television ad: Wild Harvest Organic and Natural Food, 2008
- Sales of organic food at FDM channels
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- Figure 17: U.S. sales of organic food at FDM channels, 2003-08
Retail Channels—Natural Supermarkets
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- Key points
- Natural supermarkets continue to grow, despite price challenges
- Sales of organic food at natural channels
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- Figure 18: U.S. sales of organic food at natural supermarkets, 2003-08
Market Drivers
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- Key points
- Persuading older consumers to “go organic”
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- Figure 19: Population by age, 2003-13
- Higher income household means higher organic usage
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- Figure 20: Household income distribution, 2007
Leading Companies
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- Key points
- Competition between mainstream and natural manufacturers
- Sales of leading organic food companies
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- Figure 21: Organic food and beverage sales of leading companies, 2006 and 2008
Brand Share—Organic Prepared and Packaged Food
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- Key points
- Amy’s Kitchen controls a third of sales
- Brand sales of organic prepared and packaged food
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- Figure 22: Brand sales of organic prepared and packaged food, 2006 and 2008
Brand Share—Organic Fruits and Vegetables
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- Key points
- Bagged salad and berries lead
- Tomato scare has little impact on organics
- Segment includes a range of products
- Brand sales of organic fruits and vegetables
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- Figure 23: Brand sales of organic fruit and vegetables, 2006 and 2008
Brand Share—Organic Snacks
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- Key points
- Clif and Newman’s Own Organics lead in the segment
- Brand sales of organic snacks
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- Figure 24: Brand sales of organic snacks, 2006 and 2008
Brand Share—Organic Grain Products
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- Key points
- Cereal manufacturers vie for top spot
- Brand sales of organic grain products
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- Figure 25: Brand sales of organic grain products, 2006 and 2008
Brand Share—Organic Dairy Products
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- Key points
- Stonyfield Farms controls half the market
- Brand sales of organic dairy products
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- Figure 26: Brand sales of organic dairy products, 2006 and 2008
Brand Share—Other Organic Products
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- Key points
- A broad collection of brands and few standouts
- Brand sales of other organic food
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- Figure 27: Brand sales of other organic products, 2006 and 2008
Brand Qualities
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- Key points
- Paul Newman (1925-2008) and his influence on the organic market
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- Figure 28: Launches of Newman’s Own organic products, by product segment, 1998-2008 (total)
- Newman gave organics a new image
- And Paul Newman’s own image did a lot to carry the brand…and the message
- Lessons for other organic manufacturers
Innovation and Innovators
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- Key points
- Organic ingredients in everything from baby food to candy
- Vegetables
- Snack/cereal/energy bars
- Baby food
- Number of organic food launches
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- Figure 29: New product/variant launches, organic food, by sector, 2003-08
- Organic food claims
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- Figure 30: Top 10 claims, new product/variant launches of organic food, 2006-08
- As the market matures, what claims will continue to grow?
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- Figure 31: Positioning new organic food products, 2006-08
Organic Food and Drink Buying
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- Key point
- Usage of organic food and beverages
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- Figure 32: Purchase of organic food and beverage products in past year, by gender, age, household income, race/Hispanic origin and region, July 2008
Frequency of Purchase
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- Key point
- Young respondents, those from higher-income HH, key to organic market
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- Figure 33: Frequency of purchase of organic food and drink, by age, July 2008
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- Figure 34: Frequency of purchase of organic food and drink, by household income, July 2008
- Purchase frequency up, especially among younger consumers
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- Figure 35: Purchase of organic food compared to previous year, July 2008
Purchase Venues for Organic Products
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- Key points
- Natural food stores losing ground, farmers markets see boost
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- Figure 36: Purchase venues for organic food and beverages in past year, 2006-08
- Purchase locations driven by cost
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- Figure 37: Purchase venues for organic food and beverages in past year, by age, July 2008
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- Figure 38: Purchase venues for organic food and beverages in past year, by household income, July 2008
Types of Organic Food Purchased
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- Key points
- Organic food purchases on par with past year
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- Figure 39: Types of organic food purchased in the past year, July 2007 and July 2008
- Fresh fruits and vegetables top organic food purchases
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- Figure 40: Types of organic food purchased in the past year, by gender, July 2008
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- Figure 41: Types of organic food purchased in the past year, by age, July 2008
What Purchasers Look for in Organic Food
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- Key points
- 100% organic remains on top, lack of artificial ingredients or preservatives declines
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- Figure 42: Criteria for purchasing organic food, July 2007 and July 2008
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- Figure 43: Criteria for purchasing organic food, by age, July 2008
Name Brands vs. Private Label
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- Key points
- Preference for name brands varies by gender, age
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- Figure 44: Branded and store-branded organic beverages purchased, by gender and age, July 2008
Reasons for Eating Organic Products
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- Key points
- Personal health tops reasons, but many factors in play
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- Figure 45: Reasons for eating organic food and beverages, July 2008
Distinguishing between Natural and Organic
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- Less than half distinguish between natural and organic food
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- Figure 46: Distinguishing between natural and organic food/beverages, by gender, age, household income and race/Hispanic origin, July 2008
Opinions about Organic Food and Beverages
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- Key points
- Trends in organic opinions
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- Figure 47: Opinions about organic food and drink, 2006-08
- Older consumers most resistant to organic products
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- Figure 48: Opinions about organic food and drink, by age, July 2008
Reasons for Not Purchasing Organic Food and Beverages
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- Key points
- Highest-income non-users demonstrate most resistance
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- Figure 49: Reasons for not purchasing organic food and beverages, by household income, July 2008
Cluster Analysis—Infrequent Skeptics, Fresh Seekers, Frequent Varietals
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- Infrequent Skeptics
- Fresh Seekers
- Frequent Varietals
- Cluster characteristics
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- Figure 50: Organic food purchaser clusters, July 2008
- Figure 51: Organic beverage purchase, by organic food-buying cluster, July 2008
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- Figure 52: Frequency of organic food and/or beverage purchase, by cluster, July 2008
- Figure 53: Organic food and/or beverage purchase location, by cluster, July 2008
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- Figure 54: Type of organic food purchased, by cluster, July 2008
- Figure 55: Characteristics look for in organic food, by cluster, July 2008
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- Figure 56: Purchase of organic name brand vs. store brand, by cluster, July 2008
- Figure 57: Reason for organic consumption, by cluster, July 2008
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- Figure 58: Organic food purchase habits, by cluster, July 2008
- Figure 59: Food concern and differentiation between natural and organic, by cluster, July 2008
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- Figure 60: Attitudes towards organic food and beverages, by cluster, July 2008
- Cluster demographics
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- Figure 61: Organic food purchaser clusters by gender, July 2008
- Figure 62: Organic food purchaser clusters by age group, July 2008
- Figure 63: Organic food purchaser clusters by income group, July 2008
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- Figure 64: Organic food purchaser clusters by race/Hispanic origin, July 2008
- Methodology
Custom Consumer Groups—Dads vs. Moms; Young Men vs. Young Women
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- Figure 65: Purchase of organic food and beverage products and reason for purchase, by dads, moms, young men, and young women, July 2008
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- Figure 66: Type of organic food purchased, by dads, moms, young men, and young women, July 2008
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Appendix: Other Useful Consumer Tables
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- Reasons for eating/drinking organic food and beverages
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- Figure 67: Reasons for eating organic food and beverages, by age, July 2008
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- Figure 68: Reasons for eating organic food and beverages, by race/Hispanic origin, July 2008
- Concern with genetic modification of food steady over time
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- Figure 69: Concern about genetic modification of food, by age, 2006-08
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- Figure 70: Concern about genetic modification of food, by gender, age, household income and race/Hispanic origin, July 2008
Appendix: Trade Associations
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