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4 Consumers of organic products
4.1 In this chapter we explore the consumers'
perspectives on organic food and drink, albeit utilising
proxies for their views. It was beyond the scope and
resources of this study to undertake new primary research
directly with consumers. We utilise prior survey work, we
examine feedback from a consumers' organisation and also we
explore the views of retailers, a farmers market and others
in the supply chain on purchasing patterns and motivations
of their customers, the consumers.
4.2 The
NFO System Three study of public
perceptions of food and farming in Scotland for
SEERAD (op. cit.) identified a number of
issues that are relevant to the organics sector and the
marketing of its products.
4.3 On farming methods, it was found that:
- for most survey respondents, farming methods are
not given great consideration
- the public is more concerned with quality of output
and how best quality produce can be purchased for the
lowest possible price
- the biggest concern associated with increased
mechanisation of farming is the impact on local
employment, not on the products produced
- there is an acknowledgement of greater emphasis on
standardised products in terms of shape and general
appearance
- consumers do seek the most perfectly
shaped/coloured vegetables etc. and therefore feed the
industry's drive towards "perfect" appearance.
4.4 It is only existing purchasers of organic products
that are conscious of and informed about production issues.
Although organics have an emotional appeal amongst
consumers generally, price is a significant barrier to
purchasing. Many respondents believe the pricing levels of
organic foods are a "marketing ploy" by retailers to create
and exploit a niche product. In any event, many consider
there is a lack of tangible benefits that are worth paying
premium prices - consumers expect a significant improvement
in taste which is not always evident to them. Some believe
that it is Government's role to help organic producers
reduce their prices and make the products more accessible
to the general public.
4.5 The survey found pride among consumers in the
perceived standards of farming and quality of farm products
in Scotland.
4.6 On the influences on consumers' decisions at the
point of purchase, the
NFO Systems Three survey revealed the
following key factors:
- value for money
- freshness/sell-by date
- product appearance
- quality
- country of origin - especially for meat from
Scotland
- brand name - for processed foods
- farming method (free-range, organic) - but views on
importance vary at personal levels
- food safety and animal welfare - but often taken
for granted.
4.7 The survey found that consumers rely on government
and retailers to control quality standards: there is poor
understanding of the significance of quality assurance
logos. Although the report concluded that there may be some
value in schemes that promote "Scottishness", in general
consumers are concerned with sourcing reasonable quality
food at reasonable prices: they are not concerned for the
most part with associated moral issues.
4.8 The Food Standards Agency (
FSA) identifies a number of reasons
behind consumers' decisions to purchase organic products -
taste, safety, nutrition, better for the environment and/or
better for animal welfare, or simply because "its more
natural". However, the
FSA's view on the basis of current
evidence, is that organic food is not significantly
different in terms of food safety and nutrition from food
produced conventionally. The Consumers' Association in its
Which? magazine (May 2003) concluded that there is
"no consensus" in reports linking organic food to health
benefit.
4.9 The Soil Association's recently commissioned
research to identify "organic purchasing triggers" amongst
UK consumers has produced interesting
results with significance for marketing organic products
7&8. We have selected a number of key findings and
recommendations in Table 4.1 from the 75 separate findings
highlighted in the full report on purchasing triggers,
specifically on marketing to consumers. A fuller analysis
of all the detailed findings and proposed actions made in
this publication is beyond the scope of this chapter but we
would recommend a closer analysis of their significance for
Scottish producers in both domestic and wider
UK markets.
Table 4.1: Summary of selected
findings of the Soil Association's research
into organic purchasing triggers |
Promotion: The Soil
Association wishes to step up promotion of the
benefits of organic food.
The report proposes a coordinated
generic
PR and advertising campaign
for organic food. |
Spend per consumer: Average
weight of purchase (
AWP = annual spending per
organic consumer) is up 10.2% from £29.44 to
£32.44
AWP increase is driven more
by amount spent per shopping trip (up 7.8%)
than frequency of shopping trips (up 2.3%)
Increasing
AWP for individual products
is recommended through bulk packs and 'three
for twos' |
Meat purchasing: Meat purchase
is at the end of the 'cycle of adoption' for
buying organic - few people buy organic meat as
a first purchase, and most do so after all the
other categories. There has been a big
improvement in organic meat availability in the
past year |
Drinks purchasing: The report
advises a focus on product marketing for
beer/wine/spirits on taste and environmental
benefits. Alcoholic drinks cannot deliver on
health. |
Broadening promotions: The
report proposes the publication of directories
and guides covering e.g. B&Bs, demo farms,
certified restaurants, tourist destinations,
farm shops in order to encourage organic
shopping outside the supermarket. |
Innovative promotions with
multiples: As together Waitrose, Tesco
and Sainsbury's are responsible for 70% of
organic sales, the report advises that these
three multiples are the priority for marketing
co-promotions and consumer education, including
poster campaigns advertising benefits outside
branches that have the best organic offerings
and the biggest share of organic consumer spend
(e.g. car park and trolley park advertising).
Multiples could be persuaded to discount space
or share in cost. |
Promoting to baby-food buyers:
22.3% of baby food buyers have never bought any
other organic category.
SA considers that baby food
and fruit/vegetable buyers are the entry
markets to target with messages about key
benefits - taste and health followed by animal
welfare, environment - to encourage buying into
additional categories
Report recommendations include:
targeting baby food purchasers with
offers/promotions on fresh produce; target
fresh produce purchasers with offers/promotions
on grocery/dairy lines; develop product lines
for children when they move on from organic
baby food; highlight the poor nutritional
quality of school meals, capitalising both on
parental interest in this area and on
government policy support for organic
procurement |
Potential for growth: Heavy
buyers of organic products are 23% of all
buyers, but even the most committed buyers are
committing only 13.4% of their food and drink
spending to organic food
This is viewed positively as it shows
room for growth among the core consumers who
are driving the market |
Consumers' entry points: Fruit
and vegetables are found to be the key entry
points, accounting for over half the organic
spend of light and medium organics purchasers.
All the other categories have more people
saying they bought them fourth or later than
saying they bought them first or second.
The report advises promoting other
organic categories and their benefits to buyers
of organic fruit/veg |
Loyalty schemes: When it comes
to general motivations for choosing a
supermarket, heavy and medium organic consumers
both place using a loyalty card and having a
fresh fish counter high on their lists.
Independent retailers and direct sellers
should consider their own loyalty schemes |
Other attractors: For light
consumers, childcare facilities, low prices and
extras like clothing/lottery tickets/cheap
petrol are important |
Promotional messages: Apart
from positive statements about organic food,
the statements that have higher-than-average
resonance with heavy organics consumers are '
I regard myself as a connoisseur of food
and wine' (17.5%), '
I always choose foods for health
reasons' (29.5%), '
I read the ingredients on packs before
buying' (54.3%) and '
I prefer to take holidays off the beaten
track' (39%)
The high proportion of organic consumers
who read the ingredients shows the worth of
providing basic information about organic
benefits on packaging where there is space.
The report recommends that a food
club/distinct food-focused membership might be
a good way to build awareness and organic
loyalty among foodies and develop a new income
stream.
Health publications are proposed as a
priority for Soil Association
PR work, as health is the
prime motivation for organic purchase apart
from taste. These publications are a good way
of pre-selecting the health-conscious consumer.
It is proposed to increase information
on packs and improve consistency of messages;
consideration is advised on developing a
informative website whose address is used on
packaging |
Promotional techniques: Medium
buyers are often willing to pay more for
organic food (36.9%) but their motivations to
do so (animal welfare, environment etc.) are
comparatively weak. Their higher-than-average
'agree' statements show them to be impulsive
(spending more than should on credit
cards/liking snack foods/buying just because
they see on shelf) and to be more likely than
most consumers to eat out regularly (29.1%).
The Soil Association regards it to be
important to target medium consumers with
information about the health, environmental and
animal welfare benefits of organic food.
It is recommended that the aim is
probably best served by targeted publications
and
PR by the Soil Association
as part of a generic campaign; produce guide(s)
to certified organic eateries where consumers
can eat out organically; a website called e.g.
whyorganic.com that could cover all
the main benefits for all the main food
categories in a very consumer-friendly way,
with web address on packaging ; images from
live webcams at an organic farm |
Price sensitivity: Among light
buyers, price consciousness is very acute and
health consciousness less important |
Organic vs free-range:
Although survey evidence suggests eggs are the
most frequently purchased organic product (12%
of all shoppers almost always buy, 8% mostly
and 14% occasionally), this finding is regarded
as unsafe. Claimed purchasing of organic eggs
is not matched by sales, which suggests people
think they are buying organic when in fact they
are buying free range. This is regarded as a
priority area for publicising what is
distinctive about the organic product and how
it can be identified. |
"Accidental" consumers: Over
three quarters of shoppers never buy organic
groceries, fruit juice or meat. 52% claim never
to have bought organic food
Only 48% of organic consumers are
conscious consumers - buying partly because it
is organic and being aware of this. When this
is compared with the 78% of households actually
buying organic according to Superpanel, it
could be argued that only six out of ten
organic consumers are 'real' organic consumers,
the rest are 'accidentals'. |
Cross-category promotions:
Category purchasing patterns suggest four
relatively discrete types of purchase which do
not necessarily overlap: namely fruit/veg;
eggs; meat; grocery/dairy. This is used to show
the importance of cross-promoting categories to
consumers of other categories
Use of marketing promotions to encourage
consumers to cross between the groups is
recommended - e.g. recipe books featuring lots
of eggs and dairy as an incentive for a
marketing promotion for a grocery brand,
special price for eggs and bacon together
etc. |
Environment: 59% agree that
organic food is more environmentally friendly
while 49% believe organic foods are healthier
These statistics are taken to show an
important difference between 'selfish'
motivations, which people are more likely to
act on, and more altruistic ones. The
proportion of shoppers buying organic food
(48%) closely matches the proportion who
believe it's better for them (49%) but not all
of the 59% who believe organic food is more
environmentally friendly are actually buying
it. |
Beliefs: 50% believe organic
food is better for animal welfare, 43% believe
it is safer, 39% believe it is of better
quality and 34% believe it tastes better |
Validating claims: Taste,
health and quality are the biggest drivers of
heavy purchasers of organic products.
The report recommends that it is
important to research health benefits that can
be the subject of scientifically backed claims;
producers and processors should work to ensure
that organic foods continue to deliver on
quality and taste. |
Justifying price premiums: 51%
of non-buyers cite cost as a reason for not
buying - the top-ranking reason. The only other
reasons given that reach double figures in
percentage terms are
'I don't think these products taste
better' (15%) and
'I need more information to justify
cost' (14%)
These statistics are used in the report
to indicate that one in seven non-buyers '
needs more information to justify the
cost' and suggests there are potentially
new consumers out there to bring into the
market through awareness raising. This
contradicts the point often made that market
penetration has reached as far as it is likely
to go. |
Value of media coverage: Media
coverage is the way most people first find out
about organic food - either television (25%) or
print (also 25%). Advertising comes next (20%),
followed by in-store promotions (18%) and 'from
a family member' (14%). |
Country of origin: Over 40% of
buyers in all categories do not know if the
food they are buying comes from the
UK or not
This is taken by the report's authors to
suggest there is a real market advantage to be
had by clearly labelling country of origin for
UK products and positive
commercial motivation for supermarkets to move
towards their
UK sourcing targets
The Soil Association has developed a
range of labels based on flags for licensees to
use as national/regional identifiers but the
take-up has been poor so far. |
UK branding: There
is a strong preference for
UK organic products. Around
one in six do not care where their organic food
comes from but three-quarters prefer it to be
from the
UK. |
Local branding: Motivation
towards local products (52% more likely to buy)
is not as strong as motivation towards
UK products (60% more likely
to buy), except in Wales, Scotland and the East
Midlands where it is stronger and the North and
South West where it is about the same
The report finds it to be more of a
turn-on than a turn-off for consumers outside
the South West and Wales if organic products
are identified as Welsh or Cornish, but there
is not the clear marketing advantage to be
gained that origin labelling provides for sales
within the country or region of origin itself.
Once a product gets beyond its boundary of
origin, the fact that is from the
UK is more
motivating/significant than its precise
geographical origin.
The report advises clearly identifying
products as British. If this conflicts with
successfully marketing them within their
location of origin (e.g. a British label should
be avoided in Scotland and Wales) then
consideration should be given to using
additional stick-on labels or separate
packaging to emphasise "Britishness" in wider
marketing. |
Premium pricing: Certain
categories command more acceptance of a premium
than others. Two thirds or more of organic
consumers are prepared to pay more for organic
eggs, fruit and veg, beef and pork/chicken.
Fewer are prepared to do so for dairy (62%),
lamb (61%), grocery (60%) and soft drinks
(56%). |
Multiple retailers' views of their customers'
motivations
4.10 A major dilemma for multiple retailers engaged in
organics is that they cannot confirm the two most important
factors for the consumer:
Figure 4.1: Organic buying factors - summary of
consumers' main reasons to buy
4.11 One multiple initially tried an organic section in
its supermarkets but this became a 'ghetto' - some
consumers would not even go there. This raises the issue of
segmenting the different consumer groups, including
consumers that are:
- dedicated
- willing to try - attracted by own label organics but perceive
the dedicated organics group as 'health food people'
that are 'not me!'
- not willing to try.
4.12 The multiple identifies "foodies" as well as the
committed, "keen" organics consumers as by far the largest
groups buying organic products from its stores. Most are
middle aged parents and couples, young parents and retired
couples. It expects growth to come from increasing
cross-category penetration. Also, we understand that
promoting the brand experience of '
be good to yourself' by one retailer has
encouraged customers to think of the benefits of what they
purchase. There are lessons here for 'organic'
branding.
4.13 For one multiple consulted, 5% of the population
are "committed buyers", purchasing organic food more than
30 times in a year and accounting for >50% of sales. The
AC Nielsen Homescan Survey conducted in
2003 into the reasons why people
never buy organic products, found the following:
- too expensive - 63% of respondents in a survey of c.2,800
households in the
UK
- too much hype (12%)
- health benefits not apparent (12%)
- other reason (7%)
- limited range (3%)
- poor availability (3%).
4.14 It appears however that some other multiples accord
less importance to researching customer motivations for
buying organics. For example, one consultee from a multiple
considered that there are "
as many motivations as there are consumers". His
firm aims only to ensure that the option of buying organic
products is available and tries to stock the shelves in
line with evident demand. An anecdote shared with us was
that in many stores
"organic pasta and organic mince sells well, but
organic lasagne does not". Less than 10% of this
company's customers are responsible for 80% of its organic
sales.
4.15 Our consultations with multiples, indicates that
promoting organic is "
difficult". One consultee made the point that "
thirteen certifiers take different views" on the
key benefits and to some extent on the standards that can
be promoted. It is hard to develop a consistent message
acceptable to all and still attractive to the consumer.
There are always caveats - e.g. it cannot be claimed that
all organic produce are free of antibiotics or pesticides -
as some are allowed by some certifiers in certain
circumstances. So any promotional material towards
consumers could not claim complete absence.
4.16 Our contact with multiples indicates that customers
will not accept organic produce if it is of inferior
quality compared to equivalent conventional produce, in
particular with respect to appearance. Therefore, the
organic producer of fruit and veg. for example has to meet
conventional growers' standards of quality. In terms of
rearing/growing know-how and skills, the organic producer
needs to be able at least to match if not exceed the
conventional. Also, customers will not accept easily the
limitations of seasonality - they have come to expect their
favourite fruit and veg. to be available when they want to
buy them.
Consumers using farmers' markets
4.17 The perspectives of customers buying from farmers'
markets arguably taps into purchasing motivations of a
group of consumers more aware and interested than most of
the production issues. Despite becoming accredited in 2003
by the Soil Association, organic products are not a major
part of the food and drink sold through the Edinburgh
Farmers' Market. Of 46 suppliers registered with the
Market, only 7 are organic (and there are thought to be
more organic suppliers at the Edinburgh market than at
others in Scotland):
- poultry (1)
- beef/lamb (1)
- veg (2)
- beer (1)
- wine (1)
- meat products (1).
4.18 The key characteristics of products attractive to
the Farmers' Market customers appear to be quality and
traceability. If these are in place then in the view of
this market, "organic" is less necessary.
4.19 We understand that there may be resistance from
existing traders to more organic traders entering some
farmers markets in Scotland
Other perspectives
4.20 From the perspective of a leading independent
retailer in Scotland, health and food safety, including a
healthy option for children to avoid allergic reactions,
are the key motivations for customers.
4.21 From the perspective of a consumer organisation in
Scotland, the key concerns with the organics sector
include:
- the importance of ensuring the integrity of
labelling and the claims made for food and drink
products
- including concerns about "logo overload"
- the requirement for an evidence base with respect
to the health benefits of particular kinds of food
products - reducing/removing the confusing messages
reaching consumers
- the need to establish an evidence base on the
health effects of pesticides and to determine what
pesticides are used in organic products
- concerns with the re-establishment of well-founded
trust across all sectors of the food and drink
industry
- the environmental issues around organic products as
a "food miles offender"
- a major focus on access to healthy food and healthy
diets for all consumers in Scotland - but neither
specifically focused on organic products
- concerns about promotion of benefits of what some
argue are "junk organic" products.
Emerging issues and research needs
4.22 From the range of views on the consumer perspective
on organic products, we identify the following key issues
and research needs:
- further research is required to develop, justify
and consistently promote the unique selling proposition
of organic products to consumers in alliance with the
major retail outlets. Further co-operation between
certifiers would be advantageous in developing
consistent messages for those consumers using the
higher volume retail outlets
- the significance of branding as "Scottish" appears
to vary between categories and in different markets.
Further research on how to optimise branding/labelling
on the basis of location of origin is required. It
appears as if a one-size-fits-all approach is not
necessarily best
- the feasibility of resolving uncertainties with
respect to food safety and health benefits needs to be
considered further and alternative marketing messages
developed if this cannot be achieved
- the interesting evidence from the Soil
Association's work on purchasing triggers should be
analysed and "translated" for the Scottish context.
Consideration should be given as to how this and other
available market intelligence is disseminated to and
made actionable by the supply chain actors in Scotland
- we suggest that know-how and motivation may be more
important that simply availability of information
- further research is required to discover why the
organics penetration of Farmers' Markets in Scotland
appears to be relatively low
- innovative methods of reducing production and
logistics costs, not incurring other environmental
dis-benefits, will be required by the organics sector
if price resistance among some consumer groups is to be
addressed.
Recommendations
- the feasibility of resolving uncertainties with
respect to food safety and health benefits needs to be
considered further and alternative marketing messages
developed if this cannot be achieved.
- the interesting evidence from the Soil
Association's work on purchasing triggers should be
analysed and "translated" for the Scottish context.
Consideration should be given as to how this and other
available market intelligence is disseminated to and
made actionable by the supply chain actors in Scotland
- we suggest that know-how and motivation may be more
important that simply availability of information.
- the significance of branding as "Scottish" appears
to vary between categories and in different markets.
Further research on how to optimise branding/labelling
on the basis of location of origin is required. It
appears as if a one-size-fits-all approach is not
necessarily best.
- further research is required to develop, justify
and consistently promote the unique selling proposition
of organic products to consumers in alliance with the
major retail outlets. Champions of organic products
should (continue) to engage with the multiples to
develop acceptable but effective promotional messages
in the interests both of organic producers/processors
and the retailers. Further co-operation between
certifiers would be advantageous in developing
consistent messages for those consumers using the
higher volume retail outlets.
- as organic products do not appear to have
penetrated in a major way the farmers' markets in
Scotland, there is merit in exploring more fully the
reasons behind this and the opportunities that may
still exist within this niche. For purchasers at these
markets, arguably "sophisticated" consumers, quality,
traceability and direct contact with the producers
appear to offer a sufficiently attractive "offer"
without an "organic" status for the products on
sale.
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