The food coop movement, with an interest in social and economic changes (food for people, not for profit), was a major factor in the distribution and marketing of organic products in the early period – mostly fresh produce and bulk grains and beans along with a handful of packaged products, mainly to support those with vegetarian or macrobiotic diets. By 1974 a network of coop distributors around the US supported the retailers, farms and businesses in this sector. These operated regionally, with little effort to build national relationships or alliances until the mid 1980s.
Domestic market
Today the domestic market for organic products is about US$15 billion, and organic products are purchased at farmer’s markets (4% of total sales), natural food and specialty stores (24%), natural food chain stores (24%), mainstream grocery chains and mass merchandise stores (44%), as well as online, catalogue or direct sales, convenience stores, restaurants and food service institutions (together 4%). Organic food is an integrated and established part of the market and no longer a niche. This expansion of organic into mainstream grocery chains and mass merchandise stores such as Wal-Mart has not resulted in lost sales for organic at the farmer’s markets or the local natural food stores, specialty stores, or independent grocery stores. Because of consumer demand, the US regulation and USDA seal for organic products, and media attention on the organic sector, expansion into all market channels has developed.
Organic products today are accessible to the entire US population. Consumers of organic share such characteristics as health awareness, environmental awareness, social consciousness, and a desire to avoid pesticides, growth hormones, and GMOs. The organic shopper in the US includes all economic, racial, and geographic demographic groups.
Export market
Organic commodities such as beans and grains were exported as early as the 1970s to Europe and then to Japan, but the competition on the global market has grown. The implementation of organic regulations in Japan significantly decreased the export of US products to that country. Packaged organic products have had limited success in export markets in Europe and Japan because of different national standards for organic, import requirements, and lack of interest. Canada remains a strong export market for fresh produce, specialty crops, and packaged products. Some organizations have received national or state government funds for export initiatives for organic products. Some have worked together to increase awareness and purchase of US organic products. OTA (Organic Trade Association) provides an Organic Export Directory as a networking tool.
Consumer awareness building
The most successful consumer information/education initiatives have been those by companies with branded organic products because they can deliver the message about organic repetitively, consistently, and through various modes of communication such as their product package, their web sites, newsletters to customers, advertising in magazines and stores, sponsorship of events, product sampling at stores and public events/markets, and media coverage of their company or products.
The regional organic organizations have contributed to consumer education and awareness through conferences and fairs, newsletters, web sites, and brochures. These organizations create opportunities for consumers to interact and learn from the farmers about organic production.
The media have played one of the most significant roles in building consumer awareness of organic in the US. Radio, TV, magazines, and newspapers (local, regional, and national) cover the topic of organic from the perspectives of business growth, farm issues, environmental pollution, health and safety, government policy, consumer trends, and trade. Whether supportive and accurate or negative, media coverage helps the development of the organic sector by creating recognition of organic.
There has been no successful national consumer awareness/education or marketing initiatives in the US because neither the OTA nor the NGOs have sufficient funds to launch national campaigns. Even companies with organic products and retail chains with stores across the US rarely invest in national marketing campaigns. All efforts are directed to ‘target’ markets (regions or types of customers). OTA took over a regional effort, Organically Grown Week, in California in 1989 and expanded it to become Organic Harvest Month™ (September). The success of this campaign, which still exists, lies in the consumer events that are organized by the regional organizations during September and the individual efforts of retailers and product companies to offer organic product promotional sales and product displays. OTA’s role is to promote the regional, retail, and product company activities to the national media.
In the early to mid 1990s a consumer awareness/education campaign was launched that was funded by a private sector foundation to increase the market for organics and consequently provide an incentive for conversion to organic. The campaign provided retailers with signs, information and promotional activities. The campaign ran for several years, but when the funds from the foundation ran out, there were no funds from the private sector to continue to support the campaign. The failure of this campaign was that the organization was not created by the stakeholders, but by the foundation, and was not implemented in a way that built a sense of ownership and investment among the stakeholders. Also, the market and organic sector were not developed sufficiently at that time to maintain this type of campaign.
Role of standards
The use of standards and certification to create market identity was critical for domestic market development. This was recognized by the organic farmers in the early 1970s who sold directly to the consumer. The organic standards became a promotional tool for the organic farmers, and certification was established to protect their market from fraudulent competitors. As markets expanded beyond direct sales, the guarantee offered by certification was essential for building trust in the marketplace. Voluntary standards and certification were successful up to a point. In 1989, when the Alar Report was published, the US domestic market was flooded with so-called organic produce and many farmers, retailers, and consumers were hurt by the fraudulent claims. This situation helped solidify support for a national organic program that required certification to one standard. It is unlikely that fraudulent products not in compliance with NOP are sold today in the US.
One of the strategies used by the certification agencies was to create a seal and campaigns to build consumer confidence in certification. There was some success, but as the organic market grew nationally and the number of different seals expanded, consumer confusion increased. The campaigns to position one certifier’s seal as ‘more organic’ or ‘better organic’ than another seal caused skepticism about all organic products. With the introduction of the USDA Organic Seal in 2002, consumers and the marketplace responded positively to a single seal that identifies all organic products. The differentiation between organic products is based now on other product characteristics and values and is promoted by the farmer or the product company. Certifiers compete for clients based on the quality of their service rather than seal recognition in the marketplace.(Author: Katherine DiMatteo)
Further reading on Early Organic Sector Development In the US:
Case Study Overview
Organic Agricultural Conditions
Early Organic Agricultural Development
Regulatory Framework and Policy
Supporting Structures and Lessons Learned
(Adapted From IFOAM, Building Sustainable Organic Sectors)
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