Organic Food Issues - Essay Example

?Organic Food Organic food products are products which are produced without conventional fertilizers, pesticides, biotechnology, irradiation, growth hormones, antibiotics, genetic engineering and artificial ingredients. (Cccindia, n.d.) Since the 1990s the organic product market has experienced rapid growth. Almost all food stores now carry organic food. The popularity of organic food stores has increased because of its rapid demand all around the world. “The Annual sales of organic products in the United States are topping anywhere from $16.3 billion to $29.7 billion”. (Selvon, 2012) The demand has increased due to its several benefits. Grocery retailers who consider the consumer interest and reasons of rise in organic food consumption can eventually become market leaders. They are considered to be more nutritious, protect from harmful diseases, promotes well being and protects the environment. The National organic program was developed on 21st October 2002 and is a program for developing organic standards. It comprises of representatives from several categories such as farmer, retailer, processor, scientist, environmentalist and certifying agent. The USDA organic logo is an easy way to recognize organic products for the consumers and feel con?dent that they are purchasing a product that is pure and meets standards. The foods covered under current organic standards are fruits, meat and poultry, legumes, livestock feed, nuts, seeds and so on. Organic certification systems mostly have elements such as: 1. Standards: Standards must be clearly formulated and communicated among all parties. 2. Contracts and legal framework: Contracts and Legal framework should be bound by a legal system and written agreement. 3. Inspection: It is better that the inspection covers transactions, processing, production, labeling, storage and certification. 4. Certification: The three types of certification, direct certification, Co?certification and Local certification. Consumers needs and wants change with time. The consumers nowadays have started preferring organic food products over conventional foods. There are several reasons behind it. The main reason is that there is a rise in various diseases such as cancer, heart diseases, obesity etc. Consumers have become very health conscious. This health consciousness has risen because of increase in education attainment and media. (Minton, 2009) Various harmful chemicals such as heavy metals, synthetic pesticides and solvents such as benzene and toluene are found in non-organic foods. As Organic foods are chemical and toxin free so they protect individuals from several diseases and other harmful infections. (Nytimes, 2009) The study sponsored by the European Union confirmed that organic fruits and vegetables have more vitamins and minerals and up to 50% more antioxidants which are beneficial for humans. (Kidsorganics, n.d.) In addition people who are allergic to foods, chemicals or preservatives by switching to organic foods can gain relief. Children and fetuses less developed immune system is most vulnerable to pesticide and can cause behavioral disorders and developmental delays. Furthermore pregnant women should also avoid non-organic foods as these effects of harmful chemicals can be passed from them to their baby. (Medical news today, 2004) The fruits and vegetables with high pesticides in production are pears, peaches, spinach, celery, apple, grapes, bell peppers, potatoes and red raspberries. (Vitamin retailer, n.d.) Organic foods are fresh, natural, have better taste, color and flavor. Chefs nowadays mostly prefer to choose organic foods for their kitchens because of its superior taste. (Greenopolis, n.d.) Moreover, organic farming is better for other living things such as birds and small animals as pesticides can make it difficult for creatures to reproduce and can even kill them. Another reason is that consumers want to protect the environment from these harmful chemicals as they are the main cause of climatic change. Organic food products are free of toxins as well as packed in green materials which are easily recyclable. They reduce pollution, save water, increase soil fertility, and reduce soil erosion. (Dianna, 2011) Organic foods are becoming a part of customers’ lifestyle all around the world. It helps in modernizing an individual image and is becoming a trend which consumers consider a must to follow which is another reason why consumers want to consume organic food products. By purchasing organic foods not only the livelihood of small scale farmers is supported by the local economies are also benefitted by it. As organic farming is more labor intensive it creates employment opportunities for people living in rural areas. Organic Food products have physical benefits as well as emotional benefits. The emotional benefits include feeling good about helping the environment as well as eating something which is pure, healthy and tastes better. From engaging in the product line some retail stores have clear first mover advantages while an adaptive strategy is adopted by the others retailers. The major retail stores that sell organic foods are Wal-Mart, Safeway, Whole Foods, Asda and Tesco. The retail grocery shops charge a premium price for organic food products. The organic foods are around 10% to 30% more expensive than conventional or non-organic foods. Organic foods rely on a more labor and management intensive process as farmers avoid the use of harmful chemicals due to which there expenses increase. They are also done on small scale due to which the overhead and fixed costs must be distributed across smaller produce volumes. The demand for organic foods is much higher than its supply. (Brent, 2009) This is another reason why premium price is charged. Government subsidies aren’t often received by the organic farms as they are too small. According to an annual report on organic agriculture the global sales in 2010 of organic products rose by 9.2%. In 2010 the U.S was the biggest organic market with sales rising from $2 billion to $26.7 billion. At least once a month, more than half of Americans now buy some organic food products. Germany became the second largest market as sales rose from 200 million to 6.02 billion Euros. In Denmark, Switzerland, Luxembourg the per capita consumption of organic products was recorded as highest. Later In 2011, the U.S. organic food sales growth rate was 9.5%. (Ruitenberg, 2012) The growth of organic products is based on aggressive promotion and marketing initiated by retailers as well consumer awareness of health and environmental issues. The evaluation of a country’s organic markets is done through retail value, import share, market share and growth rates of market. Around 58% consumers prefer organic foods. Mostly people with higher education and young people preferred organic foods loyalty among young consumers is observed even though they have less disposable income. On average 4.6 different organic products are bought by consumers under the age of 30 while 2.9 different products are bought by people aged around 60 or older. Furthermore people with an income of less than $30,000/year and people with kids preferred to purchase more organic food products. The primary reasons due to which organic foods are preferred are 36% to support the local farms, 34% to avoid toxins, 17% for the sake of environmental health and 13% because of taste while price was the factor due to which non-organic foods were preferred over organic foods. (Huffington post, 2011) Several women during pregnancy consumed organic foods to protect their babies from harmful chemicals and diseases. (Lipson, 2008) The types of organic foods that shoppers purchase are 44% fruits and vegetables, 30 % milk, yougurt, 29% cereals, 25% packaged foods and 21% eggs. It is important for Grocery Retail Marketers to understand the needs and wants of organic food consumers so that the retailers can attract consumers. Retailers should focus on catering to the needs and wants of consumers. Nowadays due to rise in the demand of organic foods it is necessary for grocery retailers to stock organic foods to attract more consumers and retain the existing ones. If grocery retailers’ do not offer organic products they will eventually lose their consumers. Grocery retailers can understand the needs and wants of organic foods of their customers through research, consumer feedback, observation and experiments. Consumer research consists of two methods which are qualitative and quantitative. In quantitative method the techniques used are interval estimation and hypothesis tests while techniques used in qualitative method are surveys, focus groups and projective techniques. With the help of consumer feedback grocery retailers can get an overview of what types of organic foods are preferred and other consumer insights. Moreover consumers’ behavior can also be observed as there are circumstances when the consumers do not respond or the other techniques are not applicable. The retailers should also keep this in mind that what kinds of consumers purchase organic foods, their consumption pattern and their incomes. They should also realize that the organic food market has a lot of potential so they should apply creative and innovative ideas to attract the maximum number of consumers. Retailers by catering to the needs and wants of their consumers can gain a sustainable competitive advantage which can lead to greater profits, sales, image and brand equity. As consumer is the king it will be better if consumers are provided superior value and their interests are taken into considerations by the grocery retailers. Retailers can also use various strategies to attract consumers who prefer organic foods through various ways such as: 1. Advertising: they can advertise on cooking channels or on lifestyle, fitness related magazines 2. Sales promotions: Secondly they can give short incentives occasionally or monthly to encourage the purchase of organic foods and thus increase their sales and profits. The sales promotion tools which can be used are bonus pack, buy one get one free coupons, loyalty cards, lucky draws etc. 3. In store Advertising: Thirdly they can put banners inside their store or supermarket informing the consumers about organic foods and its benefits with the help of flyers, knowledgeable employees, shelf banners and demonstrations. 4. Conventional Counterparts: If retailers carry its conventional counterpart shoppers are more likely to try an organic item. 5. Narrow Focus: retailers specialize in targeted categories such as organic salads rather than carrying a few organic products in each of several categories. The retailers should focus more on engaging their consumers to build strong relationship with them as well as build a strong bond of loyalty. To explain the importance of understanding needs and the ways in which these needs can be satisfied an example of Wal-Mart is illustrated. Consumers who prefer organic foods usually don’t think of Wal-Mart as a top of mind destination to purchase these kinds of foods. That’s why Wal-Mart has aimed to sell more organic foods due to its rapid demand. And this will eventually lead to profits, competitive advantage and creating a more modern image of the supermarket thus attracting more upscale consumers. Wal-Mart also wants to take a step to democratize food thus making products affordable for those who can’t afford organic food products. The supermarket intends to sell organic food products for around 10% more than their predictable equivalents. Soon Wal-Mart will surpass whole foods as being the largest seller of organic foods. Kellogg and Kraft now are the suppliers of organic krispies, organic macaroni cheese, organic frosted mini wheat and raisin Bran. Pepsi and General Mills have supplied various organic versions and it is expected that these supplies will be introduced first in Wal-Mart and later to the other retailers. (Warner, 2006) In a nutshell, organic food is becoming a consumers’ preferable choice as it is of fundamental importance in the revival of optimal health. It lays utmost emphasis on quality and promises a sustainable future. Its importance can be judged by the fact that there is a tremendous increase in the sales of organic foods within the previous years. (Mayoclinic, n.d.) Plus consumers’ awareness and availability of a wide variety of organic products have contributed to a massive increase in its sales. As the food industry certainly has the option to put harmful foods on the market, similarly you have the choice to not put it on your plate. (Helpguide, n.d.) It is greatly preferred over processed foods due to its superior taste. A diet compromising mainly of organic foods reduces the risk of cancer, heart diseases and lessens the amount of toxic chemicals ingested. Furthermore, it is free of food additives and colorings and totally avoids GMOs (genetically modified organisms). On the other hand, its intake increases the amount of beneficial vitamins, minerals and antioxidants. People who are struggling to make their ends meet do not have an option to cut organic foods from their budgets Non-organic foods have hidden cost i.e. the cost of health risk and environmental harm. Organic food is expensive but it is better to buy. To put it together, organic foods are simply better, healthier and contribute to a better tomorrow. It is better for grocery retailers to understand what their consumers’ needs and wants are. Nowadays with the upcoming trend of organic food consumption, retailers should understand their needs and provide them with it on time. (Kluger, 2010) Organic foods have a lot of potential and in a few years it is predicted that conventional foods might be replaced by organic foods. The retailers should make a larger section of organic foods and provide various initiates for the purpose of benefitting themselves as well as their customers. Bibliography Nytimes (2009). Eating food that’s better for you, organic or not. [online] Available at www.nytimes.com/2009/03/22/weekinreview/22bittman.html [Accessed 29 April 2012] Vitamin retailer (n.d.) U.S. Consumer-driven organic market surpasses $31 billion in 2011. [online] Available at http://www.vitaminretailer.com/ [Accessed 29 April 2012] Minton, L. (2009). Buying Organic is Well Worth the Cost even When Times are Tough April 28 2012. [Online] Available at: http://www.naturalnews.com/025570_organic_food.html#ixzz1tQnw0KcX [Accessed 29 April 2012] Tabs (2012). Organic products on the rise illustrated. 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