Organic Food And Beverage Market
Apr 1, 1996
192 Pages - Pub ID: LA419
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Abstract Table of Contents Search Inside Report Related Reports

  1. Executive Summary
    • The Products
    • Product Definition
    • Three Broad Product Categories
    • Organic Evolved in Response to Health and Environmental Issues
    • Organic Food Companies Formed in Mid-1960s
    • Federal Definition Legitimizes Organic
    • National Organic Manufacturing Standards
    • Labeling Defined by New Law
    • The Role of the Organic Trade Association
    • The Market
    • 1995 Retail Sales Approach $2.7 Billion
    • [Table] The U.S. Organic Food and Beverage Market by Category, 1991-2000 (dollars)
    • Grocery Leads Sales; Produce Growing Most Rapidly
    • Sales to Surpass $6.5 Billion by 2000
    • Natural Food Stores Account for Majority of Sales
    • [Graphic] U.S. Organic Food and Beverage Market: Share of Sales by Type of Outlet, 1995 (percent)
    • Supermarket Gains
    • Factors Affecting Market Growth
    • Environmental Concerns and Organic Sales
    • The Marketers
    • Hundreds of Companies in the Field
    • Large Organic Companies and Supermarket Sales
    • Industry Competes Through Product Introductions
    • Organic Product Introductions Accelerating
    • Organic Playing Field Becoming Well-Defined
    • Organic Companies Go After New Markets
    • Discounts to the Trade
    • Distribution and Retail
    • Independent Specialty Distributors Used Most
    • Major Distributors
    • Margins for the Two Channels Differ
    • Organic Moves Into Supermarkets
    • The Consumer
    • 23% Have Purchased Organic Produce in the Past Six Months
    • Most Consumers Satisfied with Quality of Organic Produce
    • Barriers to Purchase of Organic Produce
    • Consumer Indices
    • [Table] Purchasing of Organic Produce: By Demographic Characteristic (adults)
    • Scope and Methodology
    • Market Parameters
    • Report Methodology
  2. The Products
    • Scope of Report
    • Organic Foods and Beverages Sold at Retail
    • Products Grown But Not Labeled as Organic Excluded
    • History of the Products
    • Evolution in Response to Interconnected Issues
    • Danger of Agricultural Chemicals
    • Counter-Movement Dates from 1930s
    • From WWII Battlefield to American Farm
    • Organic Gardening and Victory Gardeners
    • Walnut Acres Founded in 1940s
    • Silent Spring Spurs New Wave in 1962
    • Organic Companies Form in Mid-1960s
    • Organic In Tune with Sixties Counterculture
    • FTC Proposal to Ban Organic Overruled in 1975
    • The 1980 USDA Report on Organic Farming
    • The 1985 Farm Act for Alternative Agriculture
    • The Alar Scare and NAR Report in 1989
    • Organic Produce Sales Jump by Over Two-Thirds
    • Natural Food Stores Maintain Commitment
    • Organic Continues Steady Growth
    • Product Definition
    • Federal Definition
    • Organic Forbids Use of Synthetic Fertilizers or Pesticides
    • But Organic Food Is Not Chemical-Free
    • Three Product Categories
    • Organic Certification Programs and Trade Associations
    • Traditionally a Self-Regulated Industry
    • In-House Certification Programs Developed in 1960s
    • Independent Certification Groups Formed in 1970s
    • International Certification Groups
    • The Organic Trade Association
    • Certification Standards First Established by the OTA
    • Federal and State Regulators
    • The Delaney Clause and Pesticide Use
    • 33 States Regulate Organic
    • Two Approaches at the State Level
    • National Regulation: The Organic Foods Production Act
    • National Organic Standards Board Formed in 1991
    • The USDA National Organic Program
    • First Standards for Organic Meat and Dairy
    • Legalization of rBGH Spurs Organic Dairy
    • Not All Natural Flavors Permitted; Some Synthetics Allowed
    • Federal Law Regulates Processed Foods and Food Labels
    • Organic Manufacturing Standards
    • Food Handling Also Covered
    • Retailers as Handlers
    • Restaurants: A Gray Area
    • Reciprocity Between Certifiers
    • Status of NOSB Recommendations
    • Packaging and Labeling
    • Packaging Restrictions
    • Packaging Issues Important to Organic Consumer
    • Bulk a Preferred Way to Sell Organic
    • State Organic Labeling Laws
    • Organic Labeling to Be Controlled by Federal Law
    • Labeling Standards Defined by Weight
  3. The Market
    • [Graphic] U.S. Retail Sales of Organic Foods and Beverages, 1990-1995 (dollars)
    • Market Size and Growth
    • Retail Market Difficult to Quantify
    • 1995 Retail Sales Approach $2.7 Billion
    • [Table] U.S. Retail Sales of Organic Foods and Beverages, 1990-1995 (dollars)
    • More Than One Million Acres in Certified Production
    • [Table] U.S. Certified Organic Agricultural Acreage: By Type of Crop, 1994 (number and percent)
    • [Graphic] U.S. Organic Food and Beverage Market: Share of Sales by Category, 1990 vs. 1995 (percent)
    • Market Composition
    • Share of Sales by Product Category
    • Grocery Leads in Sales
    • But Produce Growing Most Rapidly Today
    • Foodservice, Bakery, and Bulk Make Modest Gains
    • [Table] U.S. Retail Sales of Organic Foods and Beverages: By Category, 1990-1995 (dollars): Grocery, Produce, Other
    • Grocery Accounts for 60% of Market Sales
    • [Table] U.S. Organic Food and Beverage Market: Share of Sales by Category, 1990 vs. 1995 (percent)
    • Grocery/Dairy, Produce Are Largest Categories in Natural Food Stores
    • Produce Thrives in Natural Food Stores
    • Organic Dairy Sales More Than Double in 1994
    • Sales by Retail Outlet: Natural Food Stores Account
    • for Majority of Sales
    • But Supermarket Sales Make Gains
    • [Table] U.S. Organic Food and Beverage Market: Share of Sales by Type of Outlet, 1995 (percent)
    • West Is Top Region for Organic Produce
    • Greatest Growth on West, East Coasts and Metro Areas
    • Factors Affecting Market Growth
    • Organic Market Driven by Concerns for Health, Nutrition, and Taste
    • Organic Provides an Alternative to Chemical Agriculture
    • Environmental Concerns Support Organic Sales
    • Federal Legislation Legitimizing the Organic Market
    • Emerging Standards Already Making an Impact
    • Specific Categories to Benefit from Law
    • The FAIR Act/Freedom to Farm Bill
    • rBGH Issue Will Continue to Drive Organic Dairy Sales
    • Mad Cow Disease May Spur Organic Beef
    • Conventional Supermarkets Poach on Organic
    • Organic Presence in Supermarket Educates Consumer
    • Organic Gets Trendy and Goes Gourmet
    • Produce Benefits from Natural Superstores and Improved Distribution
    • Produce Gets a New Look
    • Export Markets Are Expanding ...
    • ... While International Sources Are Coming Online
    • Despite Advances, Distribution Inefficiencies Remain
    • Ramifications at Retail
    • Higher Prices Dampen Consumer Enthusiasm
    • Conventional Suppliers and Marketers Retain Prejudices
    • Conventional Manufacturers Also Not Committed to Organic
    • Start-Up Barriers to Organic Agriculture
    • Demand Outstrips Supply
    • Foreign Sources: A Two-Edged Sword?
    • Organic Industry Responds to Market Constraints
    • [Graphic] Projected U.S. Retail Sales of Organic Foods and Beverages: By Category, 1996-2000 (dollars)
    • Projected Market Growth
    • Sales to Approach $6.6 Billion by 2000
    • [Table] Projected U.S. Retail Sales of Organic Foods and Beverages: By Category, 1996-2000 (dollars): Grocery, Produce, Other
  4. The Marketers
    • The Marketers
    • Hundreds of Companies in the Field
    • Local Organic Companies Thrive in Alternative Outlets
    • Health Valley and Supermarket Sales
    • Other Organic Companies with Supermarket Presence
    • [Table] Growth of Selected Organic Product Lines in Conventional Supermarkets, 1995 vs. 1994 (dollars and percent)
    • Few Organic Food Companies Are Public
    • Conventional Food Companies' Involvement
    • [Chart] Selected U.S. Organic Marketers, Brands, and Products Types Competitive Overview
    • Organic Playing Field Becoming Well Defined
    • The Organic Name Game
    • Major Players Slowly Moving into Organic
    • Young Industry Competes Through New Product Introductions
    • Organic Is What Natural Was
    • Organic Product Segments
    • Tomato Upstarts Stake a Claim
    • Tomato Veterans Strike Back
    • Soy Beverages Seep into Supermarkets
    • Organic Breakfast Cereals: From Cheerios to Heritage O's
    • Organic Dairy Market Getting Competitive
    • Organic Baby Food Category Returns to the Big Time
    • Organic Wineries Are Recent Phenomenon
    • Fetzer Is Largest Winery to Use "Organic" in Marketing
    • Gallo the Largest Organic Grape Grower/Certified Farm in California
    • Organic Coffee Is More Competitive
    • Organic Teas Growing Quickly
    • Prepared Produce
    • Marketing Trends
    • Most Promote to Health Food Industry
    • Larger Organic Players Target Mass Market
    • Going After Gourmet
    • Product Repackaging
    • Expanding Product Segments
    • Co-Branding
    • New Product Trends
    • Biggest Trend Is Onslaught of New Products
    • Organic Product Introductions Exploding in the 1990s
    • [Table] Number of Organic Food and Beverage Product Introductions, 1990-1995 (number)
    • Grain-Based Products Account for Over 25% of Food Introductions
    • [Table] Share of Organic Food Product Introductions: By Product Type, 1990-1995 (percent)
    • Coffee Accounts for Over Half of Beverage Introductions
    • [Table] Share of Organic Beverage Product Introductions: By Product Type, 1990-1995 (percent)
    • Organic Goes Gourmet
    • Gourmet Italian Organic Pasta
    • Home-Grown Organic Pastas
    • Organic Purity Suits Gourmet
    • Mainstreaming Organic: White Flour and Organic Crackers
    • Organic Cookies Are Look-Alikes, Too
    • The Introduction of Organic Sugar
    • Organic Fast and Convenience Foods
    • Organic Frozen Dinners
    • Product Names Get Playful
    • Dry-Land Farming for Extra Flavor
    • New Varieties of Root Vegetables
    • Heirloom and Lost Crops
    • Kamut and Spelt
    • [Chart] Selected New Organic Food and Beverage Product Introductions, 1994-April 1996
    • Consumer Advertising
    • No Measured National Advertising
    • Organic Not Necessarily the Prime Message
    • Good Taste and Good Health
    • Taking the High Road
    • Environmental and Social Themes
    • Educational Advertising
    • Less Is More
    • More Is More
    • Good Old Organic
    • The Importance of Convenience
    • Examples of Consumer Advertising
    • Consumer Promotions
    • Consumer Promotions Not Used Heavily
    • Larger Companies Beginning to Use Coupons
    • In-Store Promotions
    • Direct Marketing
    • Philanthropy Earns Consumer Support
    • Earth's Best and Fresh Fields Team Up for Promotion
    • Examples of Consumer Promotions
    • Trade Advertising and Promotions
    • Advertising in Three Key Publications
    • Mass Market and Gourmet Publications
    • Consumer/Trade Ads
    • Trade Ads in Convention Issues
    • Press Releases and Trade Publicity
    • Discounts to the Trade
    • Examples of Trade Advertising and Promotions
    • Competitive Profiles
    • Brown-Forman Corp. (Fetzer Vineyards)
    • Coulee Region Organic Produce Pool (CROPP)
    • Dole Food Co., Inc.
    • Eden Foods, Inc.
    • Health Valley Foods, Inc.
    • The H.J. Heinz Co.
    • Lightlife Foods, Inc.
    • Montana Flour & Grains
    • Nature's Path Foods, Inc.
    • Newman's Own Organics
    • Odwalla, Inc.
    • Sno Pac Foods, Inc.
    • Tree of Life, Inc.
    • Vitasoy (USA), Inc.
  5. Distribution And Retail
    • Distribution
    • Two Distinct Channels of Distribution
    • Independent Specialty Distributors Play Key Role
    • Other Methods of Distribution
    • More Transfer Points = Less Efficiency
    • Larger Natural Food Chains Develop Warehouse Systems
    • Specialty Distributors Offer Wide Range of Services.
    • Consolidation of Specialty Distributors
    • Fresh Organic Produce Distributors
    • Forward-Buying by Distributors
    • By-Passing the Distributor
    • Mass-Market Products: Warehouse Delivery Used Most
    • Distributor Margins for the Two Channels Differ
    • Brokers Support Marketer Sales Efforts
    • At the Retail Level: Natural Food Stores
    • Natural Food Stores Leading Outlet for Organic Foods
    • [Graphic] U.S. Organic Food and Beverage Market: Share of Sales by Outlet, 1995
    • Organic Is Growth Area for Natural Food Stores
    • Organic Foods in Every Store Department
    • Organic Grocery Usually Not Tagged by the Retailer ...
    • ... But Organic Produce Is
    • Improved In-Store Merchandising
    • OTA Organic Harvest Program Supplies Promotional Materials
    • Natural Food Retailer's Version of Slotting Fees
    • Margins and Prices
    • [Table] Product Price Comparison: Organic and Non-Organic Cereals Sold in Natural Food Stores (types, dollars, and ounces)
    • Trend Profile: Fresh Fields
    • At the Retail Level: Supermarkets
    • Organic Moves into Supermarkets
    • Supermarkets Attracted to Growing, Profitable Industry
    • Margins Lower for Produce in Supermarkets
    • Responding to Threats from Natural Food Supermarkets
    • Switching Sides: King Kullen's Wild By Nature
    • A Foot in Both Camps: Pratt's Wellmarkets
    • Many Carry Organic, But Few Are Committed
    • Positioning Organic in Supermarkets
    • Segregated Integration
    • Signage Important, Especially in Produce Section
    • Mainstream Grocers Target the Organic Shopper
    • At the Retail Level: Direct Sales
    • Consumers Free-Range for Organic
    • CSAs and the Farm Gate
    • Mail Order
  6. The Consumer
    • Usage Levels for Organic Produce
    • Data Restricted to Organic Produce
    • One in Four Consumers Have Purchased Organic Produce
    • One in Three Have Sought Organic Produce
    • Consumer Demographics for Organic Produce
    • Purchasing by Gender
    • Purchasing by Age
    • Purchasing by Income
    • Consumer Indices
    • [Table] Purchasing of Organic Produce: By Demographic Characteristic (adults)
    • Education, Not Income, Determines Consumer Demand
    • Consumer Attitudes about Organic Produce
    • Consumers Satisfied with Quality of Organic Produce
    • [Table] Consumer Reasons for Buying Organic Produce (percent) Health and Nutrition as Purchase Motivators
    • [Graphic] Shoppers' Most Important Reason for Buying Organically Grown Fruits and Vegetables (percent)
    • Organic Consumers Hold Stronger Convictions about Benefits
    • One in Five Cite Interest in Buying Organic Produce
    • Barriers to Purchase
    • [Table] Consumer Reasons for Not Buying Organic Produce (percent)
    • Price Remains an Issue
    • [Table] Consumer Intent to Buy Organic Produce If It Cost More (percent)
    • Consumers Give Government Low Marks on Protection

    Appendix I: Examples Of Consumer And Trade Advertising And Promotions
    Appendix II: Addresses Of Selected Marketers
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