“We [the organic industry] have become much better about both identifying
and communicating what consumers want and need to know about organic. We
at Earthbound Farm know, for example, that some consumers are more interested in the technical side of organic than others, so we work hard to ensure that
different levels of information are available to them. That way, we not only satisfy
the needs and desires of consumers interested in the basics, but also those who
want to know more.”
Thus, more work is needed to create
industry-wide messages that are appealing
to and well understood by consumers.
Threats: Competing Labels, Opposing Voices Opportunities: Consumer Education, Emerging Science
Trends Database, the “Evolution of
Personal Care Study”, “HealthBeat
Interactive” and NMI’s Product
Attribute Trend Identifier (PATI),
“Consumers do not easily understand terms
such as ‘certification’ and ‘accreditation,’ and often fail to
connect with these terms on an emotional level.”
Lack of Regulation in Emerging Categories
Another reason for this confusion may be the lack of well-defined standards
within newer categories of organic. Although standards for organic foods are rela-
tively well defined, those for such sectors
as personal care products, aquaculture
and pet food are still under development, with much debate on how to
shape such standards. The Global Organic Textile Standards (GOTS) for textiles and NSF and Oasis personal care
standards are making headway, but are
still voluntary and many companies in
these emerging categories are using the word “organic” without any sort of official
Uncertainty and debate are natural parts of the evolution of the organic industry and, therefore, should not necessarily be seen as weaknesses, according to
Katherine DiMatteo, senior associate at
Wolf, DiMatteo + Associates and newly
elected IFOAM World Board president.
On the contrary, she sees the deliberative
nature of standards development as one
of the organic industry’s strengths.
“It took many years of discussion and
debate before OFPA went into effect, so
it only makes sense that the process of
devising standards for other sectors of the organic industry is an intense and
time-consuming one as well,” she said. “Organic is a thoroughly scrutinized industry, involving a large number of stakeholders. This means that decisions
sometimes take longer to make, but it also means that the decisions that are
made have been carefully thought through.” Still, she acknowledged, the absence of standards in emerging sectors may create frustration for those producing, buying and selling these types of organic products.
Strengths: Consumer Demand • Opportunities: Consumer Education
Yet another obstacle is the price of organic goods. According to studies conducted by the Natural Marketing Institute, including the Health and Wellness
Trends Database, the LOHAS (Lifestyles Of Health And Sustainability) Consumer
along with qualitative insights from
NMI in-depth interviews, nearly three
quarters of consumers feel that organic foods are too costly.
Often the prices for organic products are somewhat higher than for
non-organic counterparts. Most of us
in the industry know that there are a
variety of reasons for this. For example, organic farming faces stricter regulations than do conventional
practices, and thus such farming tends
to be more labor and management intensive. Because organic tends to be
done on a smaller scale than conventional farming, organic farmers often
pay more per acre to produce and to
distribute many of their products.
Moreover, historically organic farmers have not had access to the same government subsidies as their non-organic
counterparts, which has meant price
tags on organic products reflect real,
rather than subsidized, production
costs. Additionally, increased demand
for biofuels, rising fuel and freight
costs, shifts in the stock market from
funds to agricultural commodities and
a decline in the purchasing power of
the dollar are driving up prices for organic and conventional foods alike.
The challenge is to educate consumers about the true costs and values
associated with organic products.
Thus, many see the need to address
the price issue and better communicate to consumers the value proposition for organic goods.
Strengths: Consumer Demand • Threats: Domestic
Supply, Global Trade Barriers • Opportunities: Price
Gap Closing, Consumer Education