Supplier News Breaks Archives
Organic product consumers turn to mass retailers
January 13th, 2011
SHELTON, Conn. – The size of the consumer base for organic products held steady in 2010, but mass retail chains have become an increasingly preferred shopping venue for those items, according to TABS Group Inc.
The market research and consulting firm said Wednesday that for the third straight year, its Organic Product Study found that the percentage of U.S. consumers buying organic products was in the 38% to 39% range. Yet TABS noted that there was a considerable shift toward mass market retailers and away from natural food stores as the outlet of choice for shoppers.
"We still see many fallacious reports that the number of consumers purchasing organic products is growing. Our research does not support that conclusion. The annual incidence of these products has gone from 38.4% to 38.0% to 38.6% from 2008, 2009 and 2010, respectively," stated TABS Group president and founder Kurt Jetta. "What is very interesting, however, is that there were big shifts in the outlet where consumers report that they purchase these products most often."
Jetta said the big winners in terms of where organic product consumers said they preferred to shop were traditional grocers (44.1%, up from 41% in 2009) and Target (4.1%, up from 1.8% in 2009), while the losers were Walmart (12.4%, down from 18.6% in 2009), Trader Joe's (10.7%, down from 11.5% in 2009) and other natural food outlets (4.6%, down from 6.2% in 2009). The total natural foods retail segment fell from being the most preferred outlet by 26.8% in 2009 to 24.4% in January 2011, he added.
This was the first year that organic chicken and red meat were included in the survey, which polled a 1,000 adults. Still, TABS Group said, the inclusion of those categories had only a modest impact on overall organic penetration, pushing the incidence from 38.6% to 39.8%.
"When we see a consistent penetration over three years combined with the fact that adding more categories does not increase that penetration, we conclude that there is a well-entrenched consumer base for organics. There is little hope of increasing that base anytime soon," commented Jetta. "Any growth in organics from one outlet must, therefore, necessarily come at the expense of another channel."
Fresh fruit continues to be the highest penetration category for organics with 27% of consumers, followed by fresh vegetables (26%), eggs (17%), milk (16%), chicken (13%), skin care (7%), red meat (6%), frozen vegetables (6%), hair care (5%), frozen fruit (4%), ice cream (4%) and cosmetics (3%).
Skin care and hair care are the only two categories that registered consecutive years of annual gains, whereas milk and ice cream showed declines in consecutive years, TABS Group reported.