Light and moderate users will fuel organic growth in years ahead
HOLLYWOOD, Fla. — Consumers who have taken organic produce to its elevated importance today won’t be the same consumers who will take it to the next level.
That is the view of Steve Lutz, vice president of U.S. and Canada West for the Produce Marketing Association. Lutz spoke Feb. 1 at The Packer’s 2019 Global Organic Produce Expo on the topic of “Understanding the Organic Consumer Opportunity.”
“My conclusion is that the opportunity for organic, the sales gains that we will see will going forward, will be generated by consumers that are different than the people who got us here,” he said.
Heavy users of organic, who helped to build the category, can buy more, of course, he said, with expansion of assortment and availability. However, light consumers of organic is where the greatest opportunity exists, Lutz believes.
“And I don’t think we have to convince them that organic is better,” he said. “I think that’s the wrong argument; I think we have to show them (organic produce options) are available, that are high quality, and that they have a reasonable price premium that’s worth buying.”
Lutz said statistics from the Organic Trade Association now show about 82% of consumers have purchased some organic products in the past year. Looking at sales in 2018 compared with 2015, Lutz said that dollar share of organic produce sales reached nearly 10% of all produce sales in 2018, compared with less than 8% in 2015.
The percentage growth of organic produce from 2015 to 2018 totaled 28% in sales and 29% in volume, Lutz said. That compares with just 2% growth in total produce sales and a 1% decline in total produce volume in that period.
If current growth rates continue, Lutz said organic produce sales could be expected to double in the next ten years.
In his data-rich presentation, Lutz considered the behaviors of different types of organic consumers, characterized as trial, transitional, regular and committed.
In 2009, 80% of consumers were only generating 20% of sales. In contrast, 3% of consumers were driving 45% of sales, and 20% of consumers were driving 80% of sales.
By 2018, organic sales broadened, with 33% of consumers driving 56% of sales.
“The base has gotten a lot bigger and that’s a pretty good indication to us of the expansion of our market,” he said. “Those medium and light users buying a lot more products than they were just a few years ago.”
Future sales growth will come from supermarkets, including value retailers like Walmart, he said.
“To me, that’s good news, because it says those retail organizations are going to do a better job and sell more of organic produce than they have in the past.”
Organic produce is an entry point to the broader organic market, and Lutz said that puts produce marketers in a strong position.
“The place where consumers discover organic foods is the stuff that we grow,”he said. “We’re the entry point, we’re the introduction piece — it’s a really powerful message for produce.”