Skip to Content.
Sympa Menu

livingontheland - [Livingontheland] Organic food sales feel the bite from sluggish economy

livingontheland@lists.ibiblio.org

Subject: Healthy soil and sustainable growing

List archive

Chronological Thread  
  • From: "Tradingpost" <tradingpost@lobo.net>
  • To: livingontheland@lists.ibiblio.org
  • Subject: [Livingontheland] Organic food sales feel the bite from sluggish economy
  • Date: Tue, 02 Sep 2008 12:07:16 -0600


http://www.usatoday.com/money/industries/food/2008-08-18-organic-food_N.htm

Organic food sales feel the bite from sluggish economy
By Julie Schmit, USA TODAY
High gas and food prices appear to be nibbling away at the high growth rates
long enjoyed by organic and natural food makers and sellers.

Sales growth has slowed but remains strong because of the loyalty of core
organic buyers, some industry executives say. They also say new customers are
tougher to attract, given that organics can cost 10% to 50% more than
non-organic rivals.

"Most of us are seeing slightly slower growth, but we're still seeing
growth," says Gary Hirshberg, CEO of Stonyfield Farm, a leading organic
yogurt maker.

He expects 18% revenue growth this year, up from 16% last year but down from
24%-plus in past years. Others also recently reported slower growth than Wall
Street analysts anticipated, including Whole Foods Market, the largest
retailer of organic and natural foods, and Lifeway Foods, maker of dairy
drink Kefir.

In a weak economy, "New organic customers will be more cautious," says George
Siemon, CEO of Organic Valley Family of Farms, the USA's largest cooperative
of organic farmers.

Siemon also says existing organic buyers may cut purchases of discretionary
items, such as organic ice cream, but stay true to basics, such as organic
milk and meat. He earlier targeted 24% growth this year for Organic Valley.
Now, he's looking for 22%. The co-op had 30% growth last year.

Sales of organic foods and beverages are expected to reach $24 billion this
year, and average about 18% annual growth through 2010, says the Organic
Trade Association.

Almost 70% of U.S. shoppers bought something organic over a recent
three-month period, says Laurie Demeritt, president of market researcher The
Hartman Group. She says Hartman's consumer survey earlier this year showed
that organic use has been leveling off since 2006, a trend she expected to
continue this year, given the economy.

Market researcher Information Resources, in a May survey of 1,000 consumers,
also found that 52% said they were buying fewer organic products because of
cost.

Organics are also seeing increased competition from "locally grown" products,
whether they're organic or not, Demeritt says.

Organic companies, meanwhile, face more rivals as retailers have launched
organic brands, says Hirshberg. Wal-Mart and Wegmans say organic sales are
holding steady.

One consumer who's economizing is Sara Smith of Walnut Creek, Calif. She's
recently gone from buying organic at least half the time to only when
products are on sale or if there's no alternative.

She and her husband are attorneys, but with three kids and higher expenses,
"I'm trying to cut back."





  • [Livingontheland] Organic food sales feel the bite from sluggish economy, Tradingpost, 09/02/2008

Archive powered by MHonArc 2.6.24.

Top of Page