Food for Thought Served Up at Organic Conference by Rachel Brand
Scripps Howard News Service
As the organic food market expands and matures, companies must walk a fine line between altering their image to win mass appeal and staying true to their core values, experts say.
"We're seeing a major transition in society where people are getting more and more into organic and healthy lifestyles," said David Smith, vice president of marketing at Austin, Texas-based Whole Foods Market, Inc. "There is a fine line you have to balance between going mainstream more quickly and diluting the value of your brand."
Smith was among the speakers at a conference that examines trends in the natural food and product industry, sponsored by the Boulder, Colorado-based Lohas Journal.
Speakers predicted the increasing appeal of natural products to mainstream Americans and cautioned marketers to carefully position their products before this growing demographic.
According to Paddy Spence, chief executive officer of the San Francisco-based market research firm, Spins, conventional wisdom has held that natural and organic food customers were college-educated singles or childless couples older than 40 with salaries of more than $100,000 a year. These consumers hungered for products that were organic, nutritious or helped sustain the ecosystem.
But in the past two years, families, singles without a college education and lower-income people have jumped on the bandwagon, Spence said.
The transition is due, in part, to the increasing distribution of natural and organic foods and beverages to conventional retailers. Last year, "about half of all organic and natural foods were sold at Wal-Mart, Kmart and conventional grocery stores," Smith said.
Meanwhile, the industry has slowed from 20 percent yearly growth to between 10 and 15 percent yearly growth, said Carole Buyers, senior vice president of equity research at investment bank Tucker Anthony Sutro Capital Markets.
Given the expanding audience and slowing growth, companies will have to analyze their customers' lifestyles and link more closely with the aspirations of smaller market segments, experts said.
(Contact Rachel Brand of the Denver Rocky Mountain News.)
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