Progressive Grocer - October 2009 - (Page 58)

Shopper Culture How lifestyles are changing the rules Evolving Organics This changing market is driven by a wide range of influences. By Laurie Demeritt n 1997, The Hartman Group published its first strategic analysis of the rapidly changing organic market with the aptly titled report “The Evolving Organic Marketplace.” As it turned out, we accurately predicted not only a fast-changing corporate game board within a vibrant subset of consumer packaged goods (where large conglomerates would begin to dominate a fragmented market through acquisition of small, pioneering brands), but also correctly envisioned the explosive growth of the organic category. At the time, organics accounted for just under 1 percent of the $500 billion food market, but we believed the category was capable of growing several times beyond that size. Fast-forward to 2008, and we found that such predictions were indeed true: the Organic Trade Association (OTA) reported U.S. organic food sales have grown 17 percent to 21 percent annually since 1997. That compares to 2 percent to 4 percent growth for total U.S. food sales during the same time period. Examining its most recent trade data, the OTA reported in 2007 that organic foods accounted for roughly 2.8 percent of food sales in 2006, reaching $16.7 billion and making up over 95 percent of all organic product sales. Yet, today, beneath all the hyperbole about the dramatic growth of• Progressive Grocer • October 2009 I tively less likely to be organic users (Figure 1). It’s important, however, to keep in mind that 52 percent of all organic users have a household income of less than $50,000. Many factors are currently at play to influence what may be a plateau the organic market, rumblings of slowdowns in certain organic categories — or at least a suspected plateauing of overall organic sales — have surfaced. Our 2008 report, “The Many Faces of Organic,” revealed this peak in organic sales as evidenced by the aggregate consumer use of organics dropping four percentage points, from 73 percent of the population buying organics in 2006 to 69 percent in 2008. Looking back to 2000, we see that overall organic usage has leveled off. Household income has implica- tions for organic usage. Consumers with household incomes of $70,000 or higher are more likely than other consumers to be organic users. Conversely, consumers with household incomes under $30,000 are rela- for organic food sales, especially in certain categories. A renaissance within the culture of food itself has brought increasing cultural focus on formerly fringe food categories, notably local and artisan www.progressivegrocer.com A H E A D O F W H AT ’ S N E X T http://www.progressivegrocer.com

Table of Contents for the Digital Edition of Progressive Grocer - October 2009

Progressive Grocer - October 2009