The use of internet commerce for organic market food offers significant advantages for B2C and B2B companies, including lower transaction costs and easier access to international food markets. However, one of the biggest challenges in the organic food marketing strategy is attracting the attention of prospective consumers who will likely spread the message to others. As a result, it is necessary to relay information repeatedly and generate awareness about organic products. One interesting strategy in this regard is personal communication at retail outlets.
Consumers believe that “natural” stuff can’t be harmful.
The word “natural” is used without regulation in food, beverages, and meat. Yet it is not clear if consumers should trust the label claims. While “natural” sounds better on paper, a study by Consumer Reports found that many consumers’ expectations do not match reality. In fact, “natural” food can contain growth hormones and high-fructose corn syrup.
The term “natural” implies healthy food. This marketing ploy is known as greenwashing and can occur in any industry sector, from construction materials to cleaning agents to food. Unsurprisingly, consumers are confused by the term “natural” – almost half of them wrongly believe that the claim has been independently verified.
There are a few things you should look for when buying natural or organic products. The USDA regulates organic products. They’re usually free of harmful synthetic ingredients and pesticides. However, these “natural” products can still cause skin irritation or allergic reactions. Plus, some of them might not be effective.
Premium prices are a barrier to broader acceptance of organic food.
While it is unclear whether premium prices are a barrier to broader acceptance of healthy foods, prior studies have pointed out that consumers’ desire to buy organic foods is significantly influenced by price. In contrast, consumers who think organic food is more expensive are less likely to purchase it. This may be because of the perceived premium prices of organic products.
Some studies have found that the price premium of organic produce is between 15 percent and 109 percent. While consumers believe that the price gap between organic and conventional foods is narrowing, other recent studies have shown that the prices for organic foods are still too high for some consumers. According to a recent survey by the Hartman Group, many people are hesitant to pay a premium of more than 30% for organic foods.
Organic food is growing in popularity as people realize its health benefits. Premium prices can limit the number of people who buy them, which can be a significant barrier to broader acceptance. However, managers can change consumer perceptions about organic food and promote its image as a high-value product. Using comparative advertising, retailers can convert customers who view price as a barrier to purchase.
A future study should increase the size of the samples and use random sampling methods to assess the effect of price on purchasing intentions. In addition to testing behavioral theories, the research should evaluate whether people’s attitudes toward organic foods are related to the perceived cost. This could lead to a more comprehensive understanding of the relationship between price and product perception.
The study findings may help producers and decision-makers understand consumer preferences and perceptions about organic food. Ultimately, these preferences are the main prerequisites for organic food acceptance. These findings could help producers develop new products based on consumer preferences. The study also provides insights into the sensory properties of organic food and other natural foods.
Fairtrade business management increases farmers’ motivation to produce higher-quality organic food.
Fairtrade is a system of remuneration that helps farmers increase their motivation to produce higher-quality organic food. It incorporates a premium for community investment, which allows farmers to spend more on environmental education, training, and equipment efficiency. The system also promotes sustainable farming practices and promotes environmental awareness. This system is becoming more popular in emerging markets, and its impact is likely to grow.
Several factors influence farmers’ motivation to produce higher quality organic food, including the market for their produce. Strong consumer loyalty and an organic market in a major city are two of the most important factors, although other factors also play a role. An active marketing strategy is also essential.
The Fairtrade system has also attracted criticism. A 2015 study found that the benefits to producers were low and that oversupply of Fairtrade products depressed the market. However, a 2016 Journal of Economic Perspectives study found that the program achieved most of its goals on a modest scale. The study also noted that Fair Trade isn’t perfect and that rigid standards may lead to more significant inequalities in some markets.
Several internationally recognized organizations work to promote the fair trade system, though no single organization has the power to impose standards on all players in the system. These organizations certify suitable trade brands and farming cooperatives and visit farms to verify their status. However, consumers should still be skeptical of this label since it does not imply any direct benefit to the producers.
The Fair Trade Federation and Global Goods Partners are organizations that support women-led cooperatives in developing countries. They provide support to these cooperatives and facilitate their access to U.S. markets. They are also active in fair trade political campaigns and trade justice. Most of them are not-for-profit organizations run by local volunteer networks. The workshop movement began in Europe and is currently headquartered in Europe, but there are also fair trade networks in North America, Australia, and New Zealand.
In addition to the benefits for consumers, fair trade business management also promotes economic and social development in farmers’ communities. Most fair trade organizations encourage farmers to invest local earnings in projects that benefit their communities. These projects include building schools, hiring teachers, empowering women, and providing healthcare. Fairtrade organizations also train farmers to lobby large international organizations.
CPG marketing of organic food
Increasingly, consumers are demanding more organic options, which is a challenge for CPG companies. Although some categories, such as prepared foods, already have a solid organic offering, others are not as developed. In such cases, big CPG brands have the opportunity to expand their range of products by offering organic versions of popular items. These new products will not necessarily increase volume, but they can capture non-organic spending.
Organic foods represent one of the most significant market opportunities in the consumer packaged goods industry. According to estimates, the market will grow to $680 billion by 2027. Organic foods are usually more expensive than conventional products, but consumers perceive them to be better for themselves and the environment. In addition, consumers increasingly prefer healthy foods with fewer chemicals, lower sugar content, and more nutritious ingredients. In addition, organic food outperforms traditional products in multiple categories.
CPG companies must address this issue and adapt their marketing strategies to meet consumer needs. They must be more inclusive and embrace diverse thought and leadership. A panel discussion on diversity will follow the presentation. Panelists will include Heather K. Terry, CEO of GoodSam PBC, and Summer Auerbach, owner of Rainbow Blossom Market. The discussion will begin at 1:19:15.
As more organic food brands enter the mainstream, the CPG retail landscape has changed. Organic brands have made their way into conventional retail environments in the last decade. To make a successful transition, manufacturers must understand their internal sales data and the market for new products. A good data analytics provider can help with this and can create presentation-ready charts.