certified organic of bc...
TRANSCRIPT
February 2009
Certified Organic Associations of British Columbia
Outline
Today’s organic consumer
Relevant trends to be aware of
– Demographics
– Wellness
– Lifestyle
– Knowledge
– Supply side trends
– Changes in consumer demands
Staying relevant to consumers
– Leveraging brands
– Tomorrow’s organic consumer
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Past 3 Month Purchase of Organic Food
More than half of Canadians have purchased organic foods in the past three months…
3Source: Angus Reid Strategies, Feb 2009
Only 1 in 5 Canadians are really “committed” to shopping for organic
48%
32%19%
Frequency of Shopping for Organic/Natural
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16%
3%
Always Often Sometimes Rarely/Never
Source: Angus Reid Strategies, Feb 2009
A typical organic buyer is likely to be…
Female Higher Income
College/University Educated
Employed Full-time
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Organic Segmentation
Organic purchasers generally fall into two groups:
Long standing organic buyer
Newly converted
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buyer
• Concerned about health and quality of food
• Goes out of their way to seek out organic products
• Very educated about organic products, certificates, etc.
• Concerned about health and quality of food
• Goes out of their way to seek out organic products
• Very educated about organic products, certificates, etc.
• Trendy
• Casual organic buyers who do not go out of their way to seek out organic/natural products
• Trendy
• Casual organic buyers who do not go out of their way to seek out organic/natural products
Organic purchasers are more than just their demographics…
7Source: Natural Marketing Institute
Trends: Demographics
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Household Definitions are Changing
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Aging Society
Expenditures by Age Group
By 2030, the percent of persons 65+ will almost double, growing from 12% to 23%
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Trends: Wellness
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“For the first time in human history, the number of
overweight people rivals the number of underweight
people. ... While the world’s underfed population haspeople. ... While the world’s underfed population has
declined slightly since 1980 to 1.1 billion, the number
of overweight people has surged to 1.1 billion.”
-- American Obesity Society
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Role of food is changing to help improve health
More 50% of Canadians change their diet to maintain health
Significant growth in the “better for you” category in retailcategory in retail
Consumers say they are putting more importance on nutrition when purchasing food
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Trends: Lifestyle
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Busy Lifestyle = Need for Convenience
For almost one-quarter of Canadians, 3 or more of their weekly meals are prepared outside the home
– In 1992, 51% of Canadians were making a homemade meal from scratch every day – by 2002 homemade meal from scratch every day – by 2002 it was 27%.
– 41% of those who eat poorly blame their “time crunch”
15Source: University of Alberta
Trends: Knowledge
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Consumers are empowered like they never have been before
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There are no more secrets to hide…
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Changes in Consumer Demands
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What are consumers looking for?
When shopping for your household’s groceries, how important is it that you seek out each of the following?
45%Locally produced / processed
food
Natural food without preservatives or highly processed ingredients
36%or highly processed ingredients
Fair trade foods, guarantees farmers are paid a fair price
Organic foods
19%
25%
36%
Source: Angus Reid Strategies, Feb 2009
Consumers are paying more attention to buying local
% Paying More Attention When Shopping
Locally produced / processed food
Natural food without preservatives
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preservatives
Fair trade foods, guarantees farmers are paid a fair price
Organic foods
Source: Angus Reid Strategies, Feb 2009
Locavores
Local foods:
– There is a local food movement (locavores) taking off.
– Consumers believe eating local is healthier, better for the environment, and better for the economy.
– It’s a way to address food and nutrition concerns along with concerns about the environment. We see this manifesting itself in:
• Growth in farmers’ markets
• Restaurants with local menus
• Decreasing carbon footprint of food
– The definition of what ‘local’ is can be a challenge. Is it within 100 km? Within BC? Within Canada?
Consumers want to get in touch with their food…a reversal to the past where locally grown, seasonal food was eaten. A movement away from fast, processed, packaged food.
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Changes in Consumer Expectations
There are certain expectations when it comes to organic foods companies that consumers have.
– Environmentally/socially responsible (recyclable packaging, reduced carbon imprint, giving back to communities and charities, fair trade)
– Corporate values that align with what they are promoting
– Treating employees with respect
There are different levels of how authentic an organic brand is perceived to be.
A genuinely organic brand is:
– A small company,
– local,
– established as a organic/natural foods producer from day one (rather than capitalizing on recent trends),
– a company that ‘walks the walk.’23
Supply-Side & Distribution Trends
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Progression of Foods
MassProduced
StimulateTaste Buds
“Without” Food
Foods That Add
Health
Back to Basics
Quantity High fat Low fat Probiotics Organic
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Quantity& Pre-
packaged
High fat
High salt
High sugar
Low fat
Sugar free
No artificialflavour
ProbioticsAdded
Calcuim
Withginseng
Organic
Local
Authentic
Organic and natural food market is no longer niche.
– Major manufacturers are producing organic foods (‘Big’ Organics) or are acquiring organic companies.
• Ben & Jerry’s Organic Ice Cream, Heinz Organic Baby Food, Kraft Organic Ritz and Wheat Thin Crackers, Organic Raisin Bran, Rice Krispies, Mini-Wheats, etc.
This results in consumers…
– Questioning the validity of organic/natural claims
Changes in the Market
– Questioning the validity of organic/natural claims
– Rejecting certain brands based on dislike for parent company
Distribution and Marketing Focus
As the organic/natural/local/fair-trade food movement shifts more mainstream, the focus should be on making the products accessible and affordable for the average grocery buyer.
– The hard-core natural/organic buyers are willing to go out of their way to seek out organic and natural products, but newly converted or occasional natural/organic buyers do not.
Increasing visibility at traditional grocery stores is the key to targeting new Increasing visibility at traditional grocery stores is the key to targeting new and casual organic buyers.
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Shopping Habits of Always/often Organic Buyers
Where do you do the bulk of your household’s grocery shopping? (Often/always organic food buyers)
28Source: Angus Reid Strategies, Feb 2009
Relevance
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Battle for Relevance
Over 33,000 New Products introduced in the USA last year:
– 95% didn’t break the $1 million mark
– Only 22 generated over $50 million in annual retail sales
– Majority of which were line extensions, new flavors/scents, or “Me Too”
– Few were meaningful to the Consumer
Major brands are changing the way they talk to consumers
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Brands are moving emotional
Emotional Connection
Emotional Reaction
Emotional ConnectionEmotional Connection
Emotional ReactionEmotional Reaction
As a relationship deepens so does the power of the connection
depth of relationship
As a relationship deepens so does the power of the connection
depth of relationship
What emotions does the product evoke?
How does it make the consumer feel?
Optimism, aggressiveness
Like a champion
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Functional Distinctives
Functional Basics
Functional DistinctivesFunctional Distinctives
Functional Basics
Functional Basics
depth of relationship
depth of relationship
What does the product do?
How it is different?
On-court basketball shoe
High-tech design delivers comfort and endurance
Optimism, aggressiveness
We strongly encourage the inclusion of each of these types of product attributes and benefits in brand ratings. In our experience, emotional reactions and
connections are often underrepresented relative to their power in driving share
Brands are more than functional delivery mechanisms
“Our mental life is governed mainly by a cauldron of emotions, motives and desires which we are barely conscious of, and
what we call our conscious life is usually an elaborate post-hoc rationalization of things we really do for other reasons”
Neuroscientist V.S. Ramachandran
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BrandFeelings
Personality
Functional
So, how important is certification?
Important: 84%How important is it that the organic food your purchase be certified as truly organic by a third party?
33Source: Angus Reid Strategies, Feb 2009
But certification is a lower-order benefit, it’s not enough to guarantee success
Emotional Connection
Emotional Reaction
Emotional ConnectionEmotional Connection
Emotional ReactionEmotional Reaction
As a relationship deepens so does the power of the connection
depth of relationship
As a relationship deepens so does the power of the connection
depth of relationship
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Functional Distinctives
Functional Basics
Functional DistinctivesFunctional Distinctives
Functional Basics
Functional Basics
depth of relationship
depth of relationship
Organic or natural
Certified Organic
General Organic Purchaser Attitudes
35Source: Natural Marketing Institute
Emphasize Higher Order Connections
Emotional Connection
Emotional Reaction
Emotional ConnectionEmotional Connection
Emotional ReactionEmotional Reaction
As a relationship deepens so does the power of the connection
depth of relationship
As a relationship deepens so does the power of the connection
depth of relationship
Organic makes me feel optimistic
I feel better about myselfbecause I purchase organic
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Functional Distinctives
Functional Basics
Functional DistinctivesFunctional Distinctives
Functional Basics
Functional Basics
depth of relationship
depth of relationship
Organic tastes better
Organic is good for me
Tomorrow’s Organic Consumer will be Mainstream, so macro trends will be relevant…
Smaller households = decreased need for value packs
Aging society = packaging implications, font size, hand strength
On the go lifestyle = greater need for prepared mealsOn the go lifestyle = greater need for prepared meals
Focus on health generally = organic “I am what I eat”
Focus on weight control = 100 calorie packs, sugar free
Knowledge = Authentic “because I can find out if you’re a fraud”
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Strategy: Being an Authentic Organic Brand
To differentiate from ‘big organics’ and to be endorsed by long-standing organic buyers, the key is to believe in the organic philosophy 100% and live and breathe it in every part of the company.
The payoff?
– Be embraced by these educated and aware long-standing organic consumers who in turn become brand champions.
– Develop a loyal user base through high quality products – differentiated – Develop a loyal user base through high quality products – differentiated from pseudo-organic products.
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