Wendy future of retail top

Study: Organic products not drawing more consumers

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SHELTON, Conn. — Although many traditional retailers are expanding their offerings of organic food and beauty products, there has actually been no growth in the number of U.S. consumers that purchase these products, according to a study by market research firm TABS Group.

"The usage results for our latest study were remarkably similar to the results from last year’s study: Organic food and beauty products continue to be niche products; they have not penetrated a mass audience to date," Kurt Jetta, TABS Group president and founder, said in a statement.

"Identical to last year, only 38% of adults claim to have purchased anything from the major organic categories in the last six months," Jetta noted.

The study, which encompassed 1,000 adults ages 18 to 75 and was conducted earlier this month, found that organic fresh fruit had the highest purchase incidence at 26%, with organic fresh vegetables next at 25%. Organic dairy products, eggs and milk were cited for purchase by 17% and 16% of adults, respectively. Frozen organic products — such as vegetables, fruit and ice cream — had purchase levels of 5% to 7%.

Organic beauty care products also had low mainstream acceptance, according to the study. The purchase incidence for organic skin care came in at 6%, while organic hair care and cosmetics items were cited for purchase by 4% of respondents.

TABS Group pointed out that there was no meaningful change in the household penetration of any of these categories versus the results of its November 2008 study and, in contrast, nonorganic products for all of the above categories have household penetration levels of well above 70%.

Meanwhile, traditional supermarkets were the preferred outlets for organic products versus natural food stores by a margin of 39% to 27%, the study found.

However, while there were 50% more organic shoppers at traditional retail outlets than natural food outlets, there are 20 to 30 times more of those outlets, according to Jetta.

"When we see a dynamic that says that it takes a 20-fold increase in store count to generate a 50% increase in buyer count, we conclude that the vast majority retailers with a broad assortment of these products are seeing very low returns on their investment," he stated. "We can only hope that the mainstream retailers and manufacturers stop marching in lockstep to this illusory ‘trend’ and refocus their efforts on more mainstream categories and products. There is a role for a modest selection of organic products in their store, but they should accept that the natural food markets are better positioned to service the needs of the organic shopper."


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