The Marketing Part

Jeanine M. Davis

Dept of Horticultural Science

NC State University

Traditionally, the organic market has been

composed mostly of small-scale producers

who sold their products directly to

consumers or through small, specialized

local health food stores and coops.

Since the implementation of the

NOP, marketing outlets for organic

products have expanded widely.

The majority of organic food is now

sold through large supermarkets.

Organic food sales have increased

an average of 20% per year and are

expected to make up 5% of food

sales by next year.

Nationally, large farms tend to rely

on advance contracts and high

volume retail sales. The largest fresh

produce farms are vertically

integrated as packer-shippers,

paralleling the conventional

channels for distribution.

Paraphrased from

Exports

Exports are an increasing market for

organic food.

For example, “Canada is a major

destination for exported US organic

product with organic food sales

approaching $1 billion.”

Quote from

Major Market Channels for

Organic Produce

Wholesale-national scale

Wholesale-statewide/regional

Direct sales to mid-sized markets-

stores, schools and food service

Direct sales to consumers-tailgate

markets, roadside stands

CSAs

National Organic

Program

The NOP was developed “to assure

consumers that agricultural products

marketed as organic meet consistent,

uniform standards.”

NOP includes detailed instructions on how

retailers must store, label, and display

organic.

Use of the Organic Seal

This seal may

be used only for

raw or

processed

agricultural

products as

described in the

NOP

regulations.

www.ams.usda.gov

Import and Export Rules

The NOP determines how

imported and exported

organic products must be

defined, regulated and

labeled.

The USDA regulates

equivalency with other

national programs.

www.sarep.ucdavis.edu/organic/complianc

eguide/

Great section on marketing.

The Organic Consumer

The ‘typical’ organic consumer defies easy

characterization.

Most consumers who buy organic products

still purchase more non-organic products.

Most consumers know about organic food

and buy it on occasion.

The number of consumers who buy mostly

organic food is small and who buy organic

food exclusively is even smaller.

“Income is a factor—below a certain income, consumers have a diminished ability to pay a premium for organic food even if they are aware of and desire the benefits.”

“Education is more strongly correlated than income, with college educated individuals more likely to purchase organic food than those whose education was completed at the high school level.”

“Women are also more likely to buy organic food than men.”

Who Buys Organic Food?

Sales Growth and Where

“Sales have been growing in the double-digits

over the past decade.”

“Despite the small market share, the United

States is now the largest market for organic

food in the world eclipsing Germany, the

previous leader.”

“California is the state that both produces and

consumes the greatest amount of organic

food of any state in the US.”

Market Segments

“Fresh fruits and vegetables are consistently the most often purchased organic products.”

“Consumers are willing to pay a much greater premium for food primarily consumed by infants and young children.”

“Milk, meat, and cereal products are experiencing rapid growth.”

Pricing http://newfarm.org/opx/

www.growingformarket.com/

www.localharvest.org/

www.carolinafarmstewards.org

www.asapconnections.org

Local/Organic Food Locators

Search for “lettuce” in zip code

“28739”

Tailgate

Markets

Images from ASAP, Buncombe Co. Extension and N. Asheville Tailgate Market websites

Farmers’ Markets

Jeanine and Michael Tracey’s “Flicker”

CSA

Sell From the Farm

Coops

Potatoes:

Rose Finn Apple Fingerlings, 10 lb, $30, Watauga River Farm

Russian Banana Fingerlings, 10 lb, $30, Zydeco Moon

Yukon Gold, 25 lb, $32.50 Watauga River 50 lb, $50

Winter Squash:

Acorn, 18 lb, $20.00, Rose Mt & Zydeco Moon

35 lb, $38.00, Rose Mt & Zydeco Moon

Butternut, 18 lb, $20.00, Watauga River & Rose Mt

35 lb, $38.00, Watauga River & Rose Mt

Sweet Dumpling, 18 lb, $20.00 Rocking S Farm

35 lb, $38.00 Rocking S Farm

Pie Pumpkins, 18 lb, $20.00 Rocking S Farm

35 lb, $38.00 Rocking S Farm

Restaurants

Local Stores

Whole Foods

Earthfare

Greenlife

All the natural food coops

Fresh Market

Why not more of the large supermarket

chains?

Major Processors

Amy’s Organics

Hain Celestials

Lindey Mills

Braswell Foods

Wizard’s Cauldron

Gerber

Earth’s Best

Acknowledgements

This presentation address general organic production practices. It is to be

to use in planning and conducting organic horticulture trainings. The

presentation is part of project funded by a Southern SARE PDP titled

“Building Organic Agriculture Extension Training Capacity in the

Southeast”

Project Collaborators

• Elena Garcia, University of Arkansas CES

Heather Friedrich, University of Arkansas

Obadiah Njue, University of Arkansas at Pine Bluff

Jeanine Davis, North Carolina State University

Geoff Zehnder, Clemson University

Charles Mitchell, Auburn University

Rufina Ward, Alabama A&M University

Ken Ward, Alabama A&M University

Karen Wynne, Alabama Sustainable Agriculture Network