christine bushway organic industry trends ccof annual convention feb 19_2011
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Organic State of the UnionTRANSCRIPT
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Growing the Organic Market
Christine BushwayExecutive Director / CEO
Organic Trade Association
CCOF Annual Convention - Education Conference & Annual MeetingFebruary 18-20, 2011 - Ventura Beach, CA
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Organic Market 2010
• Challenges
• Solutions
• Macro Trends in US 2010
• US Organic Consumer in 2010
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Three quarters of US families have purchased at least some organic products
27% 27%
20%21%
32%36%
21% 16%
2009 2010
Within the past 2 years
2 to 5 years ago
5 to 10 years ago
10 to 15 years ago
More than 15 years ago
I do not buy organic products
Experienced Organics
Seasoned Organics
Non-buyers
Newly Organic
Q. When did you first buy organic products, if ever? (n=1197)
(n=763)
As in 2009, we’ve constructed a profile of “organic buyer groups” among US families using self-reported organic buying data.
Newly Organic families, those who only began purchasing organics in the past two years, comprise about 3 in ten US households (32% in 2009, 36% in 2010).
Experienced Organics, encompassing about 2 in 10 families (20% in 2009, 21% in 2010),first starting buying organics up to 5 years ago.
Seasoned Organics have been buying organics for more than 5 years and in some cases up to 15 years. They represent about 2 in 10 households (21% in 2009, 16% in 2010.)
Non-Buyers, about 3 in 10 households, neverbuy organic products.
The size of each buyer segmentremained consistentwith 2009 findings.
3
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US Families are buying more organicsthan ever before
Buying less
Buying moreBuying same amount
Q: Compared to 12 months ago, are you buying more, less or the same amount of organic foods in general?
Base: Total parents
2009(n=1197)
2010(n=763)
Compared to 12 months ago…
Do not buy organics in this category
27% 28%
25%
6%
31%
30% *
12% *
41% *
Purchases of Organic Foods Compared to 12 Months Ago4
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One third say trust in organic products has increased over the past year
Q: Compared to one year ago, has the extent to which you trust that products labeled as “organic” really are organic…
IncreasedDecreased
Base: Total parents
Stayed the same
Organic Buyers
Total parents
87%
92% *
85%
91% *
Changes in Trust of Organic Labeling
2009
2010
2009
2010
5
47%
58%
59%
34%
28%
9%
15% *
8%
13% *
51%
44% *
34% *
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Organic Market Size and Growth
2002 2003 2004 2005 2006 2007 2008 2009 20100
5
10
15
20
25
30
35
0%
5%
10%
15%
20%
25%
US Organic Product Sales Growth
Food
93%
7%
Non-Food
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Trends in U.S. Organic Agricultural Production
2008 Organic Production Survey*
– 14,540 organic farms & ranches in U.S.– 4.1 million acres– Organic farms in all 50 states– 78% of farms report planning to
maintain or increase organic production levels over the next five years.
* The 2008 Organic Production Survey conducted as a follow-on to the 2007 Census of Agriculture by the U.S. Department of Agriculture’s (USDA’s) National Agricultural Statistics Service (NASS).
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Trends in U.S. Organic Agricultural Production
U.S. organic farms on average have higher sales, higher production expenses,
and higher operating profit than U.S. non-organic farms
* The 2008 Organic Production Survey conducted as a follow-on to the 2007 Census of Agriculture by the U.S. Department of Agriculture’s (USDA’s) National Agricultural Statistics Service (NASS).
Organic Farms All Other Farms
Gross Sales $217,675 $134,807
Production Expenses $171,978 $109,359
Operating Profit $45,697 $25,448
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13 week dollar % change:
Organic Food Sales UP 10.7% Conventional Food Sales UP .7%
FDM ending 10/02/2010
13 week unit %
change:
Organic units UP 11.1% Conventional Units UP .5%
Recent Trend Sales: Jul. – Sept. 2010
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Trends- Local and Regional Food Systems
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Market Update – Local, Regional, Direct to Consumer
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Reports Cause Consumers to Question
• President’s Cancer Panel
• ADHD Research
• Center for Science in the Public Interest’s warning re: food dyes
• FDA guidance on antibiotics for food-producing animals
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Challenges
Economic climate
Competitive pressure from conventional
Political climate & budget cuts
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Foods/beverages can be labeled as 'natural' so long as they meet a government standard
Foods/beverages can be labeled as 'organic' so long as they meet a government standard
Organic and 'natural' mean the same thing to me when I see them on product packaging
Organic and/or natural foods/beverages are more likely to make me sick since they don't contain preservatives or pesticides
I can trust the term 'natural' when I see it on labels
I can trust the term 'organic' when I see it on labels
59
65
28
8
33
45
25
22
18
20
33
30
Trust and understanding of the terms ‘natural’ and ‘organic’, September 2009
Total don’t know
Total agree
%
Mintel survey September 2009
SOURCE: MINTEL “Organic Food and Drink Retailing U.S. Report 2009” produced in collaboration with SPINS
Connect the DotsConnect the DotsNatural and Organic – Consumer Confusion Persists
One third of all consumers don’t know the truth about organic standards, as it relates to organic foods they see in retail outlets.
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Connect the Dots
Online ad campaign positions organic as the solution
Ads appear on Google and Facebook, and newspapers such as The New York Times and Washington Post
Ads drive traffic to www.OrganicItsWorthIt.org
First 60-days:• 22 million+ impressions• 25,000+ clicks/web visits• 5,000+ social media fans/followers
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GE Alfalfa Decision
Consumer Action Alert distributed via email, social media, blogs, newsletters
25,000+ messages (and counting!) messages sent to the White House
Obama Administration approves the unrestricted cultivation of genetically engineered (GE) alfalfa, sugar beets and amylase corn in three weeks
GE alfalfa can now be planted without any federal requirements to prevent contamination of organic and non-GE crops
OTA continues work to protect organic
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Solutions- Policy and Political Pressure
1. Protect our base ($)
2. Push the envelope (policy)
3. Grassroots engagement
Build New Relationships | Nurture Old Friends
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Solutions- Advance Organic Together
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Solutions- Advance Organic Together
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Solutions- New Data Continues to Point to the Value of an R&P Order
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Thank You
Christine BushwayExecutive Director / CEOOrganic Trade Association
Additional ResourcesOrganic Trade Association
www.OTA.com
Organic business directory www.TheOrganicPages.com
Transitioning to organic production www.HowToGoOrganic.com
Directory of U.S. organic exporters www.USOrganicProducts.com
Consumer educationwww.OrganicItsWorthIt.org