February 2009 Certified Organic Associations of British Columbia
Outline Today’s organic consumer Relevant trends to be aware of – Demographics – Wellness – Lifestyle – Knowledge – Supply side trends – Changes in consumer demands Staying relevant to consumers – Leveraging brands – Tomorrow’s organic consumer 2
More than half of Canadians have purchased organic foods in the past three months… Past 3 Month Purchase of Organic Food 3 Source: Angus Reid Strategies, Feb 2009
Only 1 in 5 Canadians are really “committed” to shopping for organic Frequency of Shopping for Organic/Natural 48% 19% 32% 16% 3% Always Sometimes Rarely/Never Often 4 Source: Angus Reid Strategies, Feb 2009
A typical organic buyer is likely to be… Female Higher Income College/University Employed Full- Educated time 5
Organic Segmentation Organic purchasers generally fall into two groups: Long standing organic Newly converted buyer buyer • Concerned about health and • Concerned about health and • Trendy • Trendy quality of food quality of food • Casual organic buyers who do • Casual organic buyers who do • Goes out of their way to seek • Goes out of their way to seek not go out of their way to seek not go out of their way to seek out organic products out organic products out organic/natural products out organic/natural products • Very educated about organic • Very educated about organic products, certificates, etc. products, certificates, etc. 6
Organic purchasers are more than just their demographics… 7 Source: Natural Marketing Institute
Trends: Demographics 8
Household Definitions are Changing 9
Aging Society Expenditures by Age Group By 2030, the percent of persons 65+ will almost double, growing from 12% to 23% 10
Trends: Wellness 11
“For the first time in human history, the number of overweight people rivals the number of underweight people. ... While the world’s underfed population has people. ... While the world’s underfed population has declined slightly since 1980 to 1.1 billion, the number of overweight people has surged to 1.1 billion.” -- American Obesity Society 12
Role of food is changing to help improve health More 50% of Canadians change their diet to maintain health Significant growth in the “better for you” category in retail category in retail Consumers say they are putting more importance on nutrition when purchasing food 13
Trends: Lifestyle 14
Busy Lifestyle = Need for Convenience For almost one-quarter of Canadians, 3 or more of their weekly meals are prepared outside the home – In 1992, 51% of Canadians were making a homemade meal from scratch every day – by 2002 homemade meal from scratch every day – by 2002 it was 27%. – 41% of those who eat poorly blame their “time crunch” 15 Source: University of Alberta
Trends: Knowledge 16
Consumers are empowered like they never have been before 17
There are no more secrets to hide… 18
Changes in Consumer Demands 19
What are consumers looking for? When shopping for your household’s groceries, how important is it that you seek out each of the following? Locally produced / processed 45% food Natural food without preservatives 36% 36% or highly processed ingredients or highly processed ingredients Fair trade foods, guarantees 25% farmers are paid a fair price Organic 19% foods Source: Angus Reid Strategies, Feb 2009
Consumers are paying more attention to buying local % Paying More Attention When Shopping Locally produced / processed food Natural food without preservatives Fair trade foods, guarantees farmers are paid a fair price Organic foods 21 Source: Angus Reid Strategies, Feb 2009
Locavores Local foods: – There is a local food movement (locavores) taking off. – Consumers believe eating local is healthier, better for the environment, and better for the economy. – It’s a way to address food and nutrition concerns along with concerns about the environment. We see this manifesting itself in: • Growth in farmers’ markets • Restaurants with local menus • Decreasing carbon footprint of food – The definition of what ‘local’ is can be a challenge. Is it within 100 km? Within BC? Within Canada? Consumers want to get in touch with their food…a reversal to the past where locally grown, seasonal food was eaten. A movement away from fast, processed, packaged food. 22
Changes in Consumer Expectations There are certain expectations when it comes to organic foods companies that consumers have. – Environmentally/socially responsible (recyclable packaging, reduced carbon imprint, giving back to communities and charities, fair trade) – Corporate values that align with what they are promoting – Treating employees with respect There are different levels of how authentic an organic brand is perceived to be. A genuinely organic brand is: – A small company, – local, – established as a organic/natural foods producer from day one (rather than capitalizing on recent trends), – a company that ‘walks the walk.’ 23
Supply-Side & Distribution Trends 24
Progression of Foods Foods “Without” Back to Basics Stimulate Mass That Add Food Taste Buds Produced Health Probiotics Probiotics Organic Organic High fat High fat Low fat Low fat Quantity Quantity Added & Pre- Local High salt Sugar free packaged Calcuim Authentic High sugar No artificial With flavour ginseng 25
Changes in the Market Organic and natural food market is no longer niche. – Major manufacturers are producing organic foods (‘Big’ Organics) or are acquiring organic companies. • Ben & Jerry’s Organic Ice Cream, Heinz Organic Baby Food, Kraft Organic Ritz and Wheat Thin Crackers, Organic Raisin Bran, Rice Krispies, Mini-Wheats, etc. This results in consumers… – Questioning the validity of organic/natural claims – Rejecting certain brands based on dislike for parent company
Distribution and Marketing Focus As the organic/natural/local/fair-trade food movement shifts more mainstream, the focus should be on making the products accessible and affordable for the average grocery buyer. – The hard-core natural/organic buyers are willing to go out of their way to seek out organic and natural products, but newly converted or occasional natural/organic buyers do not. Increasing visibility at traditional grocery stores is the key to targeting new Increasing visibility at traditional grocery stores is the key to targeting new and casual organic buyers. 27
Shopping Habits of Always/often Organic Buyers Where do you do the bulk of your household’s grocery shopping? (Often/always organic food buyers) 28 Source: Angus Reid Strategies, Feb 2009
Relevance 29
Battle for Relevance Over 33,000 New Products introduced in the USA last year: – 95% didn’t break the $1 million mark – Only 22 generated over $50 million in annual retail sales – Majority of which were line extensions, new flavors/scents, or “Me Too” – Few were meaningful to the Consumer Major brands are changing the way they talk to consumers 30
Brands are moving emotional �������������������������� �������������������������� ������������������ ������������������ ���������� ���������� ���������� ����������������� ����������������� How does it make the consumer feel? ���������� ���������� ���������� Like a champion ������������������ ������������������ ���������� ���������� ���������� �������� �������� �������� What emotions does the product evoke? ����������� ����������� Optimism, aggressiveness Optimism, aggressiveness ����������� ����������� ����������� How it is different? ������������ ������������ ������������ High-tech design delivers comfort and endurance ����������� ����������� ����������� What does the product do? ������ ������ ������ On-court basketball shoe We strongly encourage the inclusion of each of these types of product attributes and benefits in brand ratings. In our experience, emotional reactions and connections are often underrepresented relative to their power in driving share 31
Brands are more than functional delivery mechanisms “ Our mental life is governed mainly by a cauldron of emotions, motives and desires which we are barely conscious of, and what we call our conscious life is usually an elaborate post-hoc rationalization of things we really do for other reasons” Neuroscientist V.S. Ramachandran Personality Feelings Brand Functional 32
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