What is organic? Organic packaged food growth stalled by differing perceptions


- Last updated on GMT

Related tags: Sustainable agriculture, Marketing

Organic food in the EU is well-defined, but consumer confusion arises when 'organic' is associated with packaged foods
Organic food in the EU is well-defined, but consumer confusion arises when 'organic' is associated with packaged foods
Organic means different things to different consumers around the world – and this is holding back the organic packaged food sector, according to a Euromonitor analyst.

Speaking on a Euromonitor video blog​, the firm’s head of packaged food research, Lamine Lahouasnia, says Chinese consumers associate organic food – even the packaged kind – with health, while US and European consumers are sceptical of packaged food in general. Globally, consumers are confused about the word ‘organic’ when it is associated with packaged foods, he says.

Organic packaged food accounted for about 1.4% of global packaged food sales in 2014, according to the market research firm, and Lahouasnia said this was a relatively low penetration rate compared to other health and wellness categories.

“The growth rates have actually dropped from between about 10-12% pre-recession to about 3-4% post-recession. Whilst consumers have started to move back to organic packaged food they haven’t done so in quite the same numbers as they did pre-recession,”​ he said.

“One of the reasons for this is that there is a lot of confusion around what the term organic actually means and if you go from country to country there are different perceptions of what organic actually is.”

According to the firm’s research, organic packaged food has very low penetration in developing markets. Although it has slightly higher penetration in developed markets, sales in those markets have been hit by recession.

‘Organic plus’

 “The other issue that organic packaged food has is that it’s no longer a viable claim to have on its own. It needs to be combined with other claims to really be effective,” ​Lahouasnia added.

The market research organisation has coined the phrase ‘organic plus’ to describe packaged foods benefitting from this idea, by positioning products as organic plus a specific consumer demographic, organic plus convenience, or organic plus value, for example.

Meanwhile, organic packaged food growth is set to drop to 3-4% and standard packaged food growth to rise to 2-3%.

“This is quite a big concern for those that are in the organic packaged food market,” ​he said.

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1 comment

value of organic claims

Posted by Steve,

Maybe growth is stalled because some consumers do not see that the extra cost of organic translates to extra value.

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