Organic Food: Not Just for Kids

Date:   1/24/2014 2:48:48 PM ( 10 y ago)

Organic Food: Not Just for Kids
http://bambooinnovator.com/category/macro-trends/page/2/



JANUARY 24, 2014 LEAVE A COMMENT
Organic Food: Not Just for Kids
Companies Try to Push Organic Foods for Every Stage of Life
SARAH NASSAUER
Jan. 22, 2014 7:23 p.m. ET
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Organic food is increasingly found in shopping carts everywhere. But for the majority of shoppers, organic food is only an occasional habit. Sarah Nassauer explains how companies are trying to break out of that cycle and win shoppers over for good. Photo: Late July Organic.
What will make people pay $3 more for frozen pizza that says “organic” when they’ve been eating non-organic pizza for years?
Organic food is increasingly found in shopping carts everywhere from urban grocery stores to rural Wal-Marts. But for the majority of shoppers, buying pricey, sometimes hard to find, organic food is only an occasional habit.
Marketers are working to turn these organic dabblers into consistent customers. Brands known for organic baby and toddler food are pushing products to appeal to older kids and adults. Some are adding organic versions of mainstream hits like boxed mac and cheese and tortilla chips to entice skeptics.
View Graphics
Illustration by James Gulliver Hancock; (L-r) Organic Valley, Horizon; Annie’s; Late July Organic Snacks; Earthbound Farm; Honest Tea
Many consumers don’t see a difference between “organic,” “natural” or other health claims, making it tricky to charge a premium for products labeled organic.
To be certified organic, food must meet U.S. Department of Agriculture regulations regarding how the animals are fed and treated and produce is grown.
About 64% of U.S. shoppers are “dabblers” or “temperates,” says Maryellen Molyneaux, president and managing partner of the Natural Marketing Institute, a consumer research consultancy focused on health and wellness.
Dabblers buy organic food haphazardly, perhaps drawn in by the label. Temperates are price sensitive and buy for isolated reasons, like milk for a toddler. “Devoteds,” the top buyers of organic food, make up about 20% of shoppers, she says.
Pitching organic food is a high-stakes effort. Coca-Cola Co. KO -0.05% , Campbell SoupCPB +0.52%
Co, Danone SA BN.FR +1.67% and other large food companies are buying up smaller organic food makers (Honest Tea, Plum Organics and Happy Family, respectively), hoping they will be a growth engine as customers curtail purchases of products they had consistently bought for decades like cereal, soup and soda. For the last four years, sales of organic food have grown about 11% a year, but sales growth appears to be hitting a plateau.
Annie’s Inc., a Berkeley, Calif.-based company that makes boxed macaroni and cheese, cheddar crackers shaped like bunnies and gummy fruit snacks made with organic ingredients has “been working on aging up our brand,” and bringing new people in, says Sarah Bird, its chief marketing officer.
“For some kids, bunnies aren’t so cool as they get older,” so last year they added cheddar squares to their product line, says Ms. Bird. To target older kids and family meals, they also started selling frozen pizza and microwavable mac and cheese that a college student could easily heat in a dorm room.
Simply adding an organic label to tasty food doesn’t always work. Annie’s last year discontinued a line of 100% organic box skillet meals (think organic Hamburger Helper) and replaced them with a version made with some organic ingredients to improve the taste. Cutting back on pricey organic ingredients enabled the company to add other, more expensive ingredients—a creamier cheese sauce and whole grain pasta—while keeping the consumer price reasonable, says Ms. Bird.
About 21% of baby food sold is organic versus less than 5% of food overall, according to data from the Organic Trade Association, which represents the industry. Becoming pregnant or having a baby is a entry point into buying organic food, a moment when parents are most protective of family eating, say companies and consumer research firms. Having serious health problems or knowing someone who does is another common trigger.
But most food shoppers are focused on “where is the highest level of quality for the lowest price,” says Laurie Demeritt, chief executive of the Hartman Group, Inc., a consumer research firm.
Organic milk and meat can be twice as much as non-organic, while organic bagged salad is only slightly more expensive.
When Earth’s Best added frozen fish and chicken nuggets aimed at older kids to its line of organic baby cereal and formula, it didn’t make them organic. “To do organic is cost-prohibitive,” about twice as expensive, says Maureen Putman, president of the grocery business at Hain Celestial US, a unit of Hain Celestial Group
Inc. HAIN -1.19% which owns Earth’s Best and other brands. When buying meat, moms care most that it is antibiotic free and low fat, she says.
“We can’t afford to do 100% organic, so I am just going off of what I believe is most important,” says Amber Bull, a 37-year-old mother of two and hairstylist who lives in Loveland, Colo. To stick to a $600-a-month food budget, she often buys organically raised meat but serves her family less of it, she says.
Ms. Bull looks for organic produce on sale, like apples and leafy greens, as she believes they have the most pesticide residue when raised conventionally. Some studies indicate apples, spinach, kale and other leafy greens have more pesticide residue than other produce.
Certified organic food costs more to produce because it must follow U.S. Department of Agriculture regulations. Animals are required to spend some time grazing on pasture, fed pricey organic feed and not given antibiotics or most hormones. Produce is grown without most synthetic fertilizers and pesticides. Genetically modified organisms can’t be used in organic products or given to animals.
In a survey last year, about 60% of people said food labeled “natural” has most of the same qualities as organic food, like being grown without pesticides, says Ms. Molyneaux of the Natural Marketing Institute. In fact, the government doesn’t define what the term natural on food labels means.
Organic yogurt maker Stonyfield Farm in August added “no toxic pesticides used here” next to the certified organic seal on its products “to get at the confusion,” says Gary Hirshberg, chairman of Stonyfield Farm, which is owned by Danone SA. “If a consumer can convince herself, ‘This is almost the same thing’ and there is a 30 cent price difference,” she will buy the cheaper, natural yogurt, he says.
Some foods trigger interest. Organic milk sales spike when families have toddlers, the age many pediatricians recommend babies first try cow’s milk.
Natural Marketing Institute data shows organic milk sales taper off when kids turn about 7 years old. Consuming organic yogurt, cereal bars, meat and poultry also becomes less common in families with older children, according to the data.
To appeal to young adults, Organic Valley is considering selling “grab and go,” milk in small bottles, says George Siemon, chief executive of the company, the largest cooperative of organic farmers in the country.
Sales of organic snacks from Barnstable, Mass.-based Late July have tripled since the company added multigrain chips in grown-up flavors like Red Hot Mojo and Sea Salt by the Seashore to its line of crackers and sandwich cookies, says Nicole Bernard Dawes, chief executive of the company.
Now people discover the brand when “looking for a chip for a Super Bowl party,” not just shopping for kids, she says
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