Through a special arrangement, what follows is an excerpt of a current article from Private Label Buyer, presented here for discussion.
A new report from The Hartman Group Inc., "The Many Faces of Organic 2008," says signs point to "rumblings of slowdowns in certain categories within the organic market and a plateauing of overall organic sales."
Many factors are wielding an influence in the leveling off of organic consumption, the report says, including a "renaissance within the culture of food," which has increased cultural focus on local, artisan and other formerly fringe food categories; as well as categories close to organic such as fair trade, humane and cage-free. Also of note is the likelihood that "conventional culture now is including organic as one of several symbolic distinctions of equal importance subsumed under the moniker of 'quality,'" the report adds.
Speaking to Private Label Buyer, Laurie Demeritt, president and COO of The Hartman Group, said figures from its 2008 are exactly the same as 2006, when the research group released its last major organic report.
"What's actually happening is some organic categories still have a lot of consumer interest, a lot of relevancy, a lot of room for growth," said Ms. Demeritt. "And for other categories, consumers are just kind of saying, 'I don't really see the value of organic in those categories, and I'm really not interested anymore.'"
"If we start talking about things like produce, dairy, meat, products for kids, fresh prepared foods - those all still have a lot of enthusiasm, interest and willingness to pay more among consumers. When you start talking about center-store categories that are packaged, processed, not for kids in most cases - those are categories where consumers are really saying, 'I'm not that interested.'"
Regarding the potential in private label organics for retailers, Ms. Demeritt said that growth opportunities still exist for kids-focused organic products, but has lessened other categories.
"It will still appeal to the core organic consumer, and we actually find core consumers increasing the frequency and use of organics, but that's only 15 percent of the population. Moreover, they are not people who typically shop in grocery stores as often as they do in other channels," she said.
Discussion Question: Have you noticed or sensed a leveling off of organic food sales? If so, what's driving the plateauing and what's the opportunity now around organics? How should retailers and brands be reacting?