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Growing the Organic Industry, Strategies for Brand Success- 2015

  • January 2015
  • -
  • Natural Marketing Institute

Almost seven in ten consumers use some type of organic product, a trend that has been moving steadily upward over the past 9 years. In the U.S., organic product sales reached over $35B in 2013 with organic foods and beverages representing 92% of those sales. In fact, organic food accounts for almost 5% of all U.S. food sales. And while the recession had an impact on organic food and beverage use, it is now rebounding after a post-recession flattening and all indications point to further future growth.

Who is using organic?
NMI’s organic segmentation model breaks down consumers by differing levels of usage and commitment. There has been success in this area as the past eight years show a migration toward the more committed segments.
There is a trended increase in Millennials entering the category that represents an important development for the industry as it suggests potential longevity and future expansion.
Organic Users’ lifestyle characteristics reveal a very active, community-involved, highly influential, and information-seeking consumer group. Almost four in ten are ‘new’ (past year) Organic Users.

What motivates consumers to choose organic?
It is a complex combination of both positive drivers and avoidance, some of which include: a craving to eat healthy, a desire to avoid negative ingredients (primarily pesticides, hormones, GMOs), a mistrust of the food chain and manufacturers, a wish to promote a sustainable and safer environment, and having a child in the household.
The ‘healthy factor’ is a key component of organics. Challenges for organic packaged goods exist, as processed foods with many ingredients are inherently viewed as less healthy, whether they are organic or not.

Despite positive growth in the industry and obvious efforts to market and communicate, confusion still abounds. Many don’t know what the characteristics or regulations of organics are, they are unclear about the benefits, or they easily confuse it with natural.
The future of the organic industry is optimistic with prospects for bringing more consumers into the fold and embracing organics with greater commitment. There is an opportunity to inform consumers, thus affecting what they think. In addition, there is opportunity to facilitate action which enables feelings of peace of mind, power over making healthier choices and progress toward personal and planetary improvements.

Data Source: NMI’s Health And Wellness Trends Database:

- Most comprehensive data available on health and wellness; based on attitudes, behavior and product usage within the world of health and wellness
- Annual consumer research among U.S. general population adults and primary grocery shopper
- Currently 16 years of trended data: 1999 through 2014, inclusive; a total of 50,000+ consumers in the database
- Nationally representative sample of the U. S. population statistically valid at 95% confidence level to +/- 1.2%
- This fourth-quarter 2014 survey was conducted on-line among 3,000+ general population consumers; primary grocery shoppers are also identified
- Conducted via on-line methodology

Data Source: NMI’s Lifestyles of Health and Sustainability (LOHAS) Database:
- Quantifies the size of the consumer market for environmentally and socially responsible products and services
- Measures the importance of environment and societal issues as well as corporate social responsibility
- Explores environmentally conscious behavior
- Determines consumer usage of LOHAS products and services
- Annual tracking study in U.S. since 2002 and globally since 2005
- Online methodology
- 4,000+ U.S. adults in 2014, nationally projectable to the U.S. adult population and accurate at the 95% confidence level to +/- 2%
- 90,000+ total global adults in database

Methodology Overview:
In 2014, NMI conducted an in-depth, multi-phase project to delve into the state of the organic industry. This report is a compilation of all phases of this study in one comprehensive source for all things organic.

1) NMI Database analysis for general population and Organic Segment insights – over 7000 interviews!
- Target consumer profiling as well as attitudinal and behavioral metrics gleaned from NMI’s Health and Wellness Trends Data (HWTD) (n=3000+) and NMI’s Lifestyles of Health and Sustainability (LOHAS) database (n=4000+). Both databases are detailed on the next pages.

2) Nielsen HomeScan organic segment insight – analysis of 50,000+ households
- NMI’s Organic Segments overlaid with Nielsen HomeScan data provide segment contribution to volume and frequency across categories, identification of opportunistic categories and need states within organic.
- Overviews are provided herein; more detailed analysis on over 40 specific organic food and beverage categories is available.

3) Consumer qualitative peer groups – 4 cities, 30+ hours of interviews
- Peer-to-peer in-home focus groups were conducted across demographic and psychographic groups to explore actual consumer emotions and behavior within organic categories and delve into barriers to usage. Detailed methodology is provided in the next pages.

4) Video Library of Insight
- A searchable video library of insights from these peer groups is available. Over 30 hours of video and transcription allows for searching by topic, key word, or segment to provide more in-depth ‘color’ and detail to your analysis.

Table Of Contents

Growing the Organic Industry, Strategies for Brand Success- 2015
Executive Summary
Overview: State of the Organic Industry
Positive Issues Impacting the Organic Industry
Negative Issues Impacting the Organic Industry
Organic Penetration Among the U.S. Adult Population
Dollar Trends in Growth of Organic Labels
Category Breakdown of Organic Product Sales
Organic Penetration of Total Food Sales
Rebounding Growth of Organic Foods and Beverages
Global and U.S. Total Food and Beverage Introductions
Global and U.S. Specific Category Introductions
Five Year Growth by Organic Categories, U.S. and Global
Summary of Global Organic Introductions
Organic vs. GMO-Free Product Launches in the U.S.
Usage Trends of Organic Food and Beverage Categories
Frequency of Use for Key Organic Categories
Length of Time Using Key Organic Categories
Cross Category Usage
Dollar Growth by Category
Future Industry Trends

NMI's Organic Segmentation
Key Segmentation Takeaways
Segmentation Snapshot
Segment Migration Over Time
Trended Organic Usage by Segment
Organic Food and Beverage Category Usage by Segment
Commitment to Personal and Environmental Health
DEVOTEDS and a Healthy Lifestyle
Questions from DEVOTEDS
TEMPERATES' Commitment and Confusion
Questions from TEMPERATES
DABBLERS' Attitudes
RELUCTANTS and Healthy Eating
Demographic Profile of Segments

Defining the Organic User
Key Takeaways about Defining the Organic User
How the Organic User is Changing Demographically
Segment Membership by Generation
Segment Composition of Organic Users vs. GP
Organic Spending vs. Buying Households by Segment
New vs. Long-Term Organic Users
Drivers to Organic: New vs. Long-Term Users
Health Orientation of New vs. Long-Term Users
Understanding of Organics - New vs. Long-Term Users
Lifestyle Characteristics of the Organic User

Capturing the Millennials
Key Takeaways from the Millennial Organic Users
Growth Among Millennial Organic Users
Importance of Capturing the Millennials
Organic Category Usage Among Millennials
Millennials and Healthy Eating
Impact of Corporate Environmental Involvement on Millennials' Buying Behavior
Millennials and Environmental Motivations
Organic (Mis)Understanding
Key Takeaways of Consumer Understanding of Organics
Consumer Confusion With Organic Definition
Trended Usage of Natural and Organic Food and Beverages
Confusion Between Natural and Organic
Impact of the Natural/Organic Confusion
Lack of Organic Regulations
Trended Understanding Regulated Organic Attributes
Perception of Healthy Food on a Continuum
Importance of Organic Attributes, Trended
Importance of Organic Attributes, by Segment
Continuum of ‘Healthy' Organic Foods
What is the ‘Healthiest' Organic Food?
Perception of Healthy as Related to ‘Close to Nature'
Thoughts About Processed Organic Food
Keeping Organic Relevant
Importance of Organic Messaging

Pathways to Organic Use
Key Takeaways About Organic Motivations
Positive and Negative Triggers to Initial Use
Methods of Maintaining a Healthy Lifestyle
Label Reading and Eating Healthy Foods
Segments and Label Checking
Trended Monitoring of Specific Items on Labels
Concerns About Pesticides
Perceived Benefits of Organic Foods and Beverages
Perceived Benefits of Organics, by Segment
Is Organic Considered Healthier than Natural?
Reasons for Initiating Use of Organics vs. Naturals
Motivations to Start Using Organic Dairy Milk
Impact of a Child in Household
Motivations of New Users vs. Long-Term Users
Reasons for First Using Organics by Segment
Importance of an Offensive Posture

GMO's: A Rise in Importance and Concern
Key Takeaways as GMOs Relate to Organics
Understanding the GMO Issues
Desire for ‘Real' Food
GMOs and a Degree of Fear
Visibility of the Issue
GMO Avoidance as a Pathway to Organic
Trended Concern About GMOs
Comparative Importance of Non-GMO, Organic and Natural
Impact of GMOs on Purchase Behavior
Not All Perceptions Are Negative
Impact of Lack of Information

Store Brands Broaden Organics' Reach
Key Takeaways of Store Brands' Impact
Trended Usage of Organic Store Brands
Organic Store Brand Usage by Organic Category Users
Organic Category Usage by Segment
U.S. Organic Store Brand Launches in Past 15 Years

Organic Purchase Drivers and Barriers
Key Takeaways of Drivers and Barriers
Consumers Reveal Multiple Opportunities for Drivers
Importance of the USDA Organic Seal
Impact of Not Using or Explaining the Organic Seal
Recognition and Understanding of Various Seals
Trended Recognition and Understanding of USDA Organic Seal
Recognition and Understanding of USDA Organic Seal by Demographic
Impact of USDA Organic Seal on Purchase Behavior, Total
Impact of USDA Organic Seal on Purchase Behavior by Consumer Groups
Acceptance of Less Than 100% Organic Content
Perceptions of ‘Premium' as it Relates to Organic
Importance of What is Stated on a Package
Sources of Influence for Organic Purchases
Preferences for Environmentally-Friendly Packaging
Pros and Cons of Organic ‘Snapshots'
Impact of Corporate Environmental Efforts on Organic Purchasing Behavior
Preferred Ways to Learn About Corporate Social Responsibility Efforts
Barriers to Organic Purchasing
Personal Costs vs. Personal Benefits
Barriers by Segment

Nielsen Category Analysis Overview
Summary Overview of Nielsen Methodology and Data Availability
Definitions of Key Nielsen Measures
Organic Category Penetration by Segment
Top Categories by Dollar Value and Household Penetration
Opportunities for More Detailed Category Analysis

View This Report »

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