Why do some retailers sell more organic produce than others? When will there be a consistent organic produce supply? When will the prices be more attractive? Why are only a small number of organic items advertised by retailers?
There are still many lingering questions about the fresh organic produce evolution. Still, as organic produce sales were up 8.7 percent in 2018, this category continues its ambitious growth each year. This goes to prove that organic produce continues to expand in the market.
Changing eating habits and health concerns are big reasons why consumers have become more aware of seeking organic products for their lifestyle. This trend will continue to strengthen and drive growth even further every year.
The single-most need in helping the organic movement to advance further is knowledge. Communicating within the industry, as well as consumers, is the key to reaching untapped business.
One organization that is dedicated to organic educating is the Organic Produce Network. Co-founders Matt Seeley and Tonya Antle launched the OPN in January of 2017 and have a special mission to connect the organic produce community through education, information and live events.
So, where has the organic movement progressed in the past 10 years?
“On the product side, organic salads and salad mixes account for one out of every five dollars spent on organic fresh produce,” said Seeley. “That has been a huge part of the make-up of organic fresh sales the past 10 years. In a larger, more rhetorical sense, the industry has benefited from greater cultural and production practices that have yielded increased supplies of organic produce. As these practices have improved and increased, the consumer is the main beneficiary — with steady product supplies and better pricing than ever before.”
Retailers have done a good job supporting organic growers by making the items available for customers, merchandising the placement on display and use of special signage, but there is more opportunity in this growing category by boosting promotional advertising in weekly flyers.
I checked four major supermarket retail ad flyers to identify the balance between the number of conventional produce and organic items.
The four combined supermarket ads totaled 94 conventional items vs. 33 organic items.
What does the organic produce community need from retailers to boost the number of items?
“The short term is tied to pricing and making as many organic products attractively priced as possible to get consumers to try different items,” said Seeley. “At the same time, consistency of supplies is paramount to success related to organic sales. Together, ample supplies of consistent quality product reasonably priced provides both current and potential organic consumer with the opportunity to try more organic fresh produce.”
The organic supply has gotten better, but prices still remain higher than a retailer would prefer in placing more items in weekly flyer ads. Ask any produce director and he or she will admit to owning up to achieving the budgeted gross profit as their greatest priority. Even though only sparse cost decreases have trickled down, organic pricing still remains as one of the retailer’s most difficult challenges.
“The days of having the gap in pricing between organic and conventional product are in the rear view mirror,” said Seeley. “Organic production and cultural practices on the supply side have greatly improved, which is being seen with similar pricing.
The organic industry addresses policies, certification, identification, auditing, data transparency, and organic enforcement standards — all important subjects. There is also a need to be talking about selling and merchandising the product, especially at the store level in the supermarkets. The selling part should be in the ownership of both the retailer and grower.
My merchandising philosophy is simple. If you want to grow a specific category or item, you have to do three things — 1. Educate the consumers about it, 2. Merchandise it aggressively, 3. Promote the living daylights out of it.
Ron Pelger is the owner of RonProCon, a produce industry advisory firm. He is also a produce industry merchandising director and a freelance writer. He can be contacted at 775-843-2394 or by e-mail at ronprocon@gmail.com.
