the marketing part jeanine m. davis. traditionally, the organic market has been composed mostly of...
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The Marketing Part
Jeanine M. Davis
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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.
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• 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.
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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.
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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
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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
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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.
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Use of the Organic Seal
• This seal may be used only for raw or processed agricultural products as described in the NOP regulations.
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www.ams.usda.gov
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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.
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• www.sarep.ucdavis.edu/organic/complianceguide/
• Great section on marketing.
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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.
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• “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?
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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.”
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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.”
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Pricing http://newfarm.org/opx/
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www.growingformarket.com/
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www.localharvest.org/
www.carolinafarmstewards.org
www.asapconnections.org
Local/Organic Food Locators
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Search for “lettuce” in zip code “28739”
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Tailgate Markets
Images from ASAP, Buncombe Co. Extension and N. Asheville Tailgate Market websites
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Farmers’ Markets
Jeanine and Michael Tracey’s “Flicker”
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CSA
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Sell From the Farm
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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, $50Winter Squash:Acorn, 18 lb, $20.00, Rose Mt & Zydeco Moon 35 lb, $38.00, Rose Mt & Zydeco MoonButternut, 18 lb, $20.00, Watauga River & Rose Mt 35 lb, $38.00, Watauga River & Rose MtSweet Dumpling, 18 lb, $20.00 Rocking S Farm35 lb, $38.00 Rocking S FarmPie Pumpkins, 18 lb, $20.00 Rocking S Farm35 lb, $38.00 Rocking S Farm
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Local Stores
• Whole Foods• Earthfare• Greenlife• All the natural food coops• Fresh Market• Why not more of the large
supermarket chains?
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Major Processors
• Amy’s Organics• Hain Celestials• Lindey Mills• Braswell Foods• Wizard’s Cauldron• Gerber• Earth’s Best