certified organic of bc...

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

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Past 3 Month Purchase of Organic Food

More than half of Canadians have purchased organic foods in the past three months…

3Source: Angus Reid Strategies, Feb 2009

Only 1 in 5 Canadians are really “committed” to shopping for organic

48%

32%19%

Frequency of Shopping for Organic/Natural

4

16%

3%

Always Often Sometimes Rarely/Never

Source: Angus Reid Strategies, Feb 2009

A typical organic buyer is likely to be…

Female Higher Income

College/University Educated

Employed Full-time

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Organic Segmentation

Organic purchasers generally fall into two groups:

Long standing organic buyer

Newly converted

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buyer

• Concerned about health and quality of food

• Goes out of their way to seek out organic products

• Very educated about organic products, certificates, etc.

• Concerned about health and quality of food

• Goes out of their way to seek out organic products

• Very educated about organic products, certificates, etc.

• Trendy

• Casual organic buyers who do not go out of their way to seek out organic/natural products

• Trendy

• Casual organic buyers who do not go out of their way to seek out organic/natural products

Organic purchasers are more than just their demographics…

7Source: Natural Marketing Institute

Trends: Demographics

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Household Definitions are Changing

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Aging Society

Expenditures by Age Group

By 2030, the percent of persons 65+ will almost double, growing from 12% to 23%

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Trends: Wellness

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“For the first time in human history, the number of

overweight people rivals the number of underweight

people. ... While the world’s underfed population haspeople. ... 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

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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 retailcategory in retail

Consumers say they are putting more importance on nutrition when purchasing food

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Trends: Lifestyle

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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”

15Source: University of Alberta

Trends: Knowledge

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Consumers are empowered like they never have been before

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There are no more secrets to hide…

18

Changes in Consumer Demands

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What are consumers looking for?

When shopping for your household’s groceries, how important is it that you seek out each of the following?

45%Locally produced / processed

food

Natural food without preservatives or highly processed ingredients

36%or highly processed ingredients

Fair trade foods, guarantees farmers are paid a fair price

Organic foods

19%

25%

36%


Consumers are paying more attention to buying local

% Paying More Attention When Shopping

Locally produced / processed food

Natural food without preservatives

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preservatives

Fair trade foods, guarantees farmers are paid a fair price

Organic foods


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.

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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

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Progression of Foods

MassProduced

StimulateTaste Buds

“Without” Food

Foods That Add

Health

Back to Basics

Quantity High fat Low fat Probiotics Organic

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Quantity& Pre-

packaged

High fat

High salt

High sugar

Low fat

Sugar free

No artificialflavour

ProbioticsAdded

Calcuim

Withginseng

Organic

Local

Authentic

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

Changes in the Market

– 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.

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Shopping Habits of Always/often Organic Buyers

Where do you do the bulk of your household’s grocery shopping? (Often/always organic food buyers)


Relevance

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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

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Brands are moving emotional

Emotional Connection

Emotional Reaction

Emotional ConnectionEmotional Connection

Emotional ReactionEmotional Reaction

As a relationship deepens so does the power of the connection

depth of relationship



What emotions does the product evoke?

How does it make the consumer feel?

Optimism, aggressiveness

Like a champion

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Functional Distinctives

Functional Basics

Functional DistinctivesFunctional Distinctives

Functional Basics

Functional Basics



What does the product do?

How it is different?

On-court basketball shoe

High-tech design delivers comfort and endurance

Optimism, aggressiveness

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

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

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BrandFeelings

Personality

Functional

So, how important is certification?

Important: 84%How important is it that the organic food your purchase be certified as truly organic by a third party?


But certification is a lower-order benefit, it’s not enough to guarantee success


Emotional Reaction







34


Functional Basics


Functional Basics

Functional Basics



Organic or natural

Certified Organic

General Organic Purchaser Attitudes

35Source: Natural Marketing Institute

Emphasize Higher Order Connections


Emotional Reaction







Organic makes me feel optimistic

I feel better about myselfbecause I purchase organic

36


Functional Basics


Functional Basics

Functional Basics



Organic tastes better

Organic is good for me

Tomorrow’s Organic Consumer will be Mainstream, so macro trends will be relevant…

Smaller households = decreased need for value packs

Aging society = packaging implications, font size, hand strength

On the go lifestyle = greater need for prepared mealsOn the go lifestyle = greater need for prepared meals

Focus on health generally = organic “I am what I eat”

Focus on weight control = 100 calorie packs, sugar free

Knowledge = Authentic “because I can find out if you’re a fraud”

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Strategy: Being an Authentic Organic Brand

To differentiate from ‘big organics’ and to be endorsed by long-standing organic buyers, the key is to believe in the organic philosophy 100% and live and breathe it in every part of the company.

The payoff?

– Be embraced by these educated and aware long-standing organic consumers who in turn become brand champions.

– Develop a loyal user base through high quality products – differentiated – Develop a loyal user base through high quality products – differentiated from pseudo-organic products.

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Thank You

Questions?Questions?

Mike RodenburghAngus Reid [email protected]

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