market characteristics0001

market characteristics0001 - Chapter 5 conventional food...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 5 C onsistent double-digit growth in the organic industry over the years drives continued interest from the larger conventional food industry, with regard to product development and manufacturing as well as acquisition strategies. With conventional food sales growth in low single digits, the organic segment's 20 percent growth overall is a powerful magnet. From an entrepreneurial perspective, new organic food and beverage businesses start-ups are likely to be inspired by environmental and social values as well as organic's fmancial promise. Though fmancial success is obviously more of a possibility today than it was in the early days of the organic movement, barriers to entry in the marketplace have also increased with consolidation and centralization, so nothing is guaranteed. At the same time, investors and banks are more likely to see value in an organic project than they were even just a few years ago. But without a doubt, the primary driver for the organic industry remains the organic consumer. Unwilling to be passive sheep for food industry marketers in the midst of an environmental revolution that brought the dangers of chemicals and pesticides in food and agriculture to light, shoppers had their say when the organic option was introduced. They were, and are, not only willing to seek out and support organic foods, but to pay more for them. Perhaps the surprise is that the "niche" market of organics continues to grow and grow. What many predicted would be a self-limiting category that would only thrive in college towns or liberal strongholds turned out to have much more mainstream power.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Market Perceptions If consumers, rather than the food industry, have driven this phenomenal market, why do they do so? Why do they pay significant price premiums to get organic food? According to the Organic Trends Study by The Hartman Group, based in Bellevue, Wash., consumers buy organic primarily because they think it's better for their health: Table 5-1 Reasons for Choosing Organic (Hartman Organic Trends Study) l. For my health 2. As a trial 3. No particular reason 4. Availability of organics 5. Safety of organics 6. Taste of organics 7. To support the growers 8. For the environment The responses in this particular survey are frustratingly vague (especially No.3!) but reflect other consumer data that suggests that many consumers are driven more by personal health concerns than more altruistic long-term environmental issues.
Background image of page 2
In the report "Shopping for Health 2003: Whole Health for the Whole Family," conducted by the Food Marketing Institute and Prevention magazine, 60 percent of shoppers said they felt that organic foods are healthier than conventional foods (though only 39 percent said they buy organic). Twenty-three percent of consumers said that long-term health benefits are the primary reason for buying organic foods. This trend toward
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/07/2009 for the course JOUR 3403 taught by Professor Cheval,mel during the Fall '07 term at Colorado.

Page1 / 28

market characteristics0001 - Chapter 5 conventional food...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online