More consumers bought organic in 2011 than in past three years
Tuesday, February 21, 2012
By TABS Group Inc., Engredea News & Analysis
For the first time in four years since undertaking its Annual Organic Product Study, TABS Group Inc. found a significant increase in the number of American consumers reporting that they purchased Organic products and a jump in overall sales. Specifically, the percentage of all consumers stating they purchased Organics rose from 39.8 percent in January 2011 to 41.8 percent in January 2012, a 5 percent increase.
Total sales of Organic products rose an estimated 15 to 20 percent. This robust growth in is due in part to consumers deciding to expand the portfolio of Organic products they purchase. The survey found an 11 percent increase in the number of product types purchased by a typical Organic shopper. Identical studies conducted in 2010 and 2011 showed no year-over-year increase in the number of consumers purchasing Organic products, nor in the number of Organic categories that they purchase.
“The increased penetration for Organic products, particularly staples like milk, eggs, meat and vegetables may signify that consumers are finding more room in their budget so they can afford the higher price points associated with Organic products,” said TABS Group Founder and CEO Dr. Kurt Jetta. Sales of Organic beef increased by 48 percent last year, followed by ice cream — which saw a 44 percent jump — then hair care products at 28 percent, vegetables with 26 percent, milk at 25 percent, eggs with 21 percent and at 17 percent for chicken.
DEMOGRAPHICS FORETELL CONTINUED GROWTH IN ORGANICS
Younger consumers expressed greater preference for Organic products, with 48 percent of respondents 40 years in age and younger reporting usage in the last six months compared with only 34 percent of consumers aged 60 and older. Correspondingly, people under 30 bought on average 4.6 different Organic products compared with 2.9 different products purchased by people 60 and older.
“Younger consumers, who typically have the least disposable income, show the greatest loyalty to Organics. This will likely increase Organics’ sales and market share over time as these consumers’ buying power grows and they pass their preference on to their children. If this pattern continues, the outlook for distributors of Organic products is very positive,” said Jetta. The study showed that people earning less than $30,000 a year and people with children purchased more Organic products than higher earners and those without children.
For retailers, the study showed that consumers by an overwhelming margin of 62 percent to 38 percent make their Organic purchases at mainstream retail stores over natural food or specialty stores.
“It appears that mainstream retailers’ expanded support for Organic products may be starting to pay off,” Dr. Jetta noted. The study found that growth is also widespread with Organics’ penetration by region equalizing, with customers in the western United States purchasing the largest variety of products, on average.