The organic segment continues to be a bright spot within an otherwise slower performing overall food and beverage market. We believe this is driven primarily by an intensification in consumer investment in organic foods and beverage. Our Organic and Natural 2018 report finds this momentum reflects the fact that organics have become widely available in a greater number of brands, categories, retailers and restaurants, and are appearing at compressed price premiums. Consumers are trying more, buying more and strengthening their positive beliefs about organic foods and beverages.
While growth has been steady and as the industry answers consumer calls for higher standards, the organic market has become more complex. The lines between organics and conventional products are blurring, and new distinctions are emerging at a rapid pace. In terms of consumers, levels of participation in the organic category vary widely. Today, the key to understanding organic consumption lies in exploring the evolutionary journey a consumer goes through as they become an organic consumer. In order to identify these stages of evolution, we believe in analyzing consumer segments through what we term a “world perspective.” Specifically, The Hartman Group’s World Model helps explain the variance in consumer orientations towards organic products.
Our World Model was created in the late 1990’s based on the belief that one of the great truths of consumer behavior is that it might best be understood by modeling social behavior. Instead of treating consumers as largely autonomous decision makers, we began examining the social forces that share in or give order to consumer decisions. In other words, viewing the “why” of choosing goods and services (like organics) in the context of the activities in which they are used. Common sense would advise us to consider how people use products and services and to recognize that the level of interest from consumer to consumer reflects basic lifestyle differences. We use lifestyle as a device to characterize an entire world of activity. This “world” perspective takes into consideration all of the individuals, organizations and cultural practices that contribute to or shape a given category or activity like organics.
The best way to understand how a world perspective works is to picture it as a globe. Within a given world of activity (e.g., the world of organic), we can envision a center, the “Core,” as well as an outer edge, the “Periphery.” The individuals in the Core, even though they may not be large in number, are the most creatively active and engaged in a particular world of activity, while those at the periphery are maintain only minimal, infrequent and less intense involvement in that world.
The World of Organic: Consumer Profiles
The Hartman Group’s World Model helps explain the variance in consumer orientations towards organic products. For the world of organic food and beverage, the intensity and meaning of “organic” varies depending upon which consumer segment is participating. For example, Core consumers who have adopted organic foods have done so with the expectations that such products have been grown and cared for with intent to take care of the land and the recipient’s health. For the Periphery, organic may simply mean something “new” with only vague health benefits.
According to our Organic & Natural 2018 report, many consumers have recently shown increasing aspirations to purchasing organic products; we are witnessing mainstream adoption of a wider range of Core behaviors. This is interesting specifically because the closer a consumer is to the Core, the better they are able to articulate the reasons behind their organic purchases.
Our world of organic segmentation is based on organic usage, number of organic categories purchased, importance of organic when shopping and associations made with organics. Of US consumers who use organic products, the majority (61%) is made up of Mid-level (Inner + Outer) organic consumers, with smaller segments at the two extremes: 24% are Core consumers, and 15% are Periphery consumers. The Outer Mid-level is the largest consumer segment (37%).
- As described, Core organic buyers are the most intensely involved. As the trendsetters and early adopters, they are the most knowledgeable regarding issues surrounding organic products. By understanding the Core, we are able to examine potential upcoming important issues, which Mid-level consumers may come to espouse over time.
- The Mid-levels represent the majority of organic consumers and thus the biggest opportunity for retailers, manufacturers and restaurant operators. Inner Mid-level consumers aspire to Core attitudes and behaviors but pragmatically apply them with less consistency and reach.
- Outer Mid-level consumers engage with organic products as well, often motivated by fear of unknown consequences of conventional food as well as by status — “everyone is doing it.”
- Periphery consumers prioritize other concerns. They still, however, know some general principles and occasionally incorporate organic products into their diet.
The growth in the organic and natural market represents an ongoing and deep cultural change. For the foreseeable future, organics will remain for most consumers the gold standard of a safer, higher-quality product. Organic communicates freedom from chemicals (on the farm and during production) as well as a product that is seen as “better for the world.” As such organic products will continue to play an important role in consumers' search for better food. We recommend that manufacturers, retailers and restaurant operators should:
- Prioritize speaking to consumer values around organics; do not risk falling out of consumers’ consideration set.
- Focus on communicating the benefits of organic and natural from a health and wellness perspective first. However, consumers do appreciate hearing about positive effects on the wider world: Communications that convey “better for you AND better for the world” are the most impactful.
- Leverage the organic seal as a means of elevating quality perceptions, particularly in categories where pesticides are front of mind.
As CEO of The Hartman Group, Demeritt drives the vision, strategy, operations and results-oriented culture for the company's associates as The Hartman Group furthers its offerings of tactical thinking, consumer and market intelligence, cultural competency and innovative intellectual capital to a global marketplace.
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