Slow down of organic market
Market growth rates for organic food and drink will drop as the economy battles.
This statement has been made due to new research from Mintel International.
Americans spending less on organic
“Rising food and gas prices, the credit crunch and economic uncertainty have deeply affected people’s shopping habits. Across the board, Americans are spending less and ‘organic versus traditional’ is a decision many people are thinking about carefully,” said Marcia Mogelonsky, senior analyst at Mintel.
Sales growth slowing down
Mintel announced that the market for organic foods and beverages will reach $7.2 billion in 2008, which is a rise of more than 14% from $3 billion in 2003. However, year-over-year, Mintel has seen sales growth slowing down.
Increased food prices and private label brands are major cost-related challenges for organic manufacturers. The price of all food at home increased more than 7% over the last year, Mintel further stated.
Consumers saving money
Another discovery made by Mintel is that consumers are saving money by going for private label organics. According to the Mintel Global New Products Database, there were 540 new private label products in organic foods in 2007, a major increase from 35 in 2003.Also, 60% of survey respondents stated the difference between brand name and private label organics doesn’t matter – as they purchase whatever is available.
Organic shopper to return to traditional brand
“Economic struggles will undoubtedly change the way organic food and drink is sold. But we don’t expect people to completely stop buying organics. We anticipate more subtle changes such as the formerly all-organic shopper who returns to traditional cookie brands while sticking with organic produce. These small changes will slow market growth,” Mogelonsky stated.