serving the ethnic markets of the northeast april 6, 2001 “one way to stand out in a crowd” joe...
TRANSCRIPT
Serving the Ethnic Markets of the Northeast
April 6, 2001
“One Way to Stand Out in A Crowd”
Joe M. Regenstein8 Stocking Hall, Cornell University
Ithaca, NY 14853-7201
607-255-2109; FAX: 607-257-2871; [email protected]
(Please use email if possible)
Why Serving the Ethnic Markets Might Be Important to You?
Broadens your market opportunities
Particularly in New York State
We are the DIVERSITY STATE
Reach new audiences
Supermarkets prefer products that have the widest audience potential and are unique
Allows you to address niche markets that larger operations may not be able to do
America: The Salad Bowl
A change in the basic American paradigm
We are NOT all alike
Being different is okay
We each have something to contribute to American culture
It is okay to maintain your cultural heritage
And food is an essential part of each of our cultures
New York Demographics
One of the most diverse ethnic populations in the US
Will be over 50% “non-European” origins within the foreseeable future
Major cultures:
African American
Hispanic
Asian
The Borough of Queens
Probably the largest collection of diverse ethnic neighborhoods in America
Over 130 home languages spoken
A challenge to all aspects of the system but a golden opportunity to develop new opportunities
Need to consider both “culture” and “language” in reaching these audiences
Reaching Urban Populations
On-farm sales
Direct to local ethnic store in urban area
Farmers Markets
CSA
Regular Commercial Channels
Broker versus distributor
General Considerations of the Diverse Marketplace
One has consumers who purchase food based on:
Religious requirements: Jewish: kosher, Muslim:halal
Religious practices: Buddhist, Seventh Day Adventist
Religious custom: Almost all religious groups
Ethnic custom: All cultural groups
Philosophical belief system: Vegetarian, vegan, organic
Seventh Day Adventists
Most are vegetarian but it is not required
Hold with most of the “Biblical” laws in a modified form
The latter are a “Test of Fellowship”
Thus, a limited market for “kosher” meats
Key Ethnic Statistics
28.4 Million Hispanics in the US
66% Mexican
14% Central/South America
11% Puerto Rican
4% Cuban
7% Other
11.4% of the US population in 2000
37.5% of the population growth from 1995-2000
Products are emerging for this market
Goya has traditionally served this market
Beware: Each of these cultures have their own food preferences
Mexican food is NOT the standard for all of these countries
Mainstream companies are developing bilingual products, e.g., General Mills and P&G
Use language of labels to reach markets
Examples of two bilingual mainstream products
Ethnic Statistics -- Part II
9.7 Million Asians in the US
57% live in CA, NY, and HA
94% live in metropolitan areas
3.9% of the population in 2000
15.2% of the population growth from 1995-2000
A more detailed look at Asian Immigration Statistics
Ethnic Statistics -- Part III
34.2 Million African-Americans
55% live in the South
64% live in Central Cities
12.2% of the population in 2000
16.7% of the population growth from 1995-2000
Ethnic Statistics -- Part IV
By 2010 to 2015 or so, the following states will have a majority of Hispanics, Asians, and African-Americans:
NY
CA -- I s already there (2000 census)
FL
TX
Target Marketing
The US Market for Organic Produce
Figures are very conflicting:
1997: $680 million
1981: $21 million
Predicted increase: 2.5% per year
Other figures:
Organic foods amount to 7.8 Billion dollars
Is 2% of total food sales
Consumer Purchases
Fifty percent of all shoppers said they purchased natural or organic foods at least once a month
82% bought vegetables
35% bought fruit
What does “natural” mean?
Is no definition in the US
Farmers
0.2% of US cropland is certified organic
1.5% in Europe
12,000 US farmers claim to be organic but only about 7,000 are certified
Some farmers will have up to 70% of their costs for getting into the organic program up to a maximum of $500 covered (Is $500 enough?)
Farms with annual sales of less than $5,000 don’t need to be certified -- but will consumers trust them?
Natural versus Organic
Natural has never been defined in the US
Organic is defined by various certifying agencies
NOFA
Some states have definitions, e.g., California
Feds proud that their standards are tougher (554 pages worth)
Are Organic Products Pesticide Free?
No!
They may definitely contain organic pesticides
Must be <5% of EPA tolerance level
In fact the USDA in January announced a program to permit some pesticides to carry the National Organic Program symbol on their label
Are organic pesticides safer?
Will Americans put their money where there mouth is?
How much extra are Americans willing to spend for organic food?
Is it enough to cover the costs?
As we expand, the people who move to organic will be more and more price conscious; they won’t be the dedicated hard core folks
How much decrease in quality are they willing to accept in order to have organic products?
A Single StandardAre all people who want organic of a single mind set?
Should they have to be?
Should the government be defining that single standard?
Should the government’s standard be stronger than those of the states and current certifying bodies?
We wouldn’t accept this in the “Religious” area -- but we are accepting in the “Philosophical” area!!!
The National Organic Standards Board
A government advisory body that recommends organic standards
Includes a wide variety of folks, including those from the large “commercial” organic industry -- which many traditional organic growers consider an “oxymoron”
Will big “Ag” takeover organic?
Web site: www.ams.usda.gov/nop/
Organic Livestock
100% Organic Feed (except for some vitamins)
Whole herd in 90 day as a one time exemption
Grown organically from birth, poultry from second day
Vaccines are allowed
Access to the outdoors is required
Animals treated with a prohibited substance must be removed from the operation
The USDA Process
At the same time the USDA bureaucracy developed a structure for enforcing the regulations
Third party verification that must be independent of the growers that are being certified
What Does that Mean?
Many of the current “organic” organizations are not independent enough according to USDA -- favors “corporate” certifiers
What does this do for the cost of inspection?
And how are the verifiers checked?
By the USDA in a fee-for-service inspections!
Another Sticky PointOrganic farming has always depended
on “manures” as part of their process
But manure is a potential carrier of pathogens
So one is required to compost manure
But not just compost it any old way -- must meet some very stringent and very specific regulations equivalent to Biosolids (Sludge)
Other Details
No synthetic pesticides or fertilizers
No antibiotics and synthetic growth hormones
Farms exempt from organic certification cannot sell to processors
On farm production can give products that are “organic” without certification
Organic seed unless not available
Drift from regular agriculture is organic farmer’s problem
The Labeling Regulations
Less than 70%
Can identify the organic components in the ingredient statement
Initially if it had 50% organic content it could be labeled as made with organic ingredients -- but this is now moved up to 70%
Can list up to three organic ingredients on the front label
Labeling Regulations -- Part II
Must have over 95% organic content to be called “organic”
So some non-organic material is permitted in many “organic” products
100% Organic must be 100% organic
The Seal can only be used for products with 95% and greater organics
The Organic Label:Is it a Government Seal that
Organic is Better?
