The organic sector will need to “message strongly” – restating core values – to raise relevance and limit exposure to cost of living pressures, leading retail and branding figures told this week’s Soil Association Trade Conference.
New research conducted by NielsenIQ shows that “organic consumers are no more insulated against the cost of living crisis than the rest of the population”, said its head of retailer and business insights, Mike Watkins.
Describing the consumer outlook as one of “falling GDP, the highest food inflation in decades, and the prospect of entering a full recession in 2023”, Watkins predicted “changes in consumer behaviour every bit as profound as those seen during the pandemic” – but with some important differences that might see organic affected differently.
Negative growth
NielsenIQ data for the most recent 12-week period show that organic food sales fell into negative growth (-2%), while general grocery grew at 4% (with overall volumes down at supermarkets by around 5%).
Watkins said: “What we see, is that for the first time in a decade organic food sector growth is falling behind that of conventional grocery. This (data) is based on supermarkets, convenience stores and online. It doesn’t include the discounters – but that doesn’t really matter because the trend is clearly there.”
Watkins said that the UK organic sector’s reliance on “committed consumers” presented a challenge at this time. “While eight in 10 people buy organic, the majority buy very, very infrequently – maybe once or twice a year. You’ve lost many of the light users over the last few months. However, the more committed buyers are also trimming their organic spend. And they are the group who account for 80% of all organic purchases.”
Sustainability squeeze?
Increasingly, organic’s sustainability credentials are prioritised in organic sector messaging. But how will sustainability fare during a cost of living crisis? It’s one of the questions that brand-building agency The Crow Flies put to consumers in a recent poll.
The Crow Flies founder, David Preston, said that while consumers say sustainability is important, they find it difficult to understand. “They also find the things they did beforehand are now no longer prioritised. So they’re often frustrated as well as confused.” As a result, the framing of sustainability for many people becomes narrow. “People tend to go after things they recognise. It might be plastic-free, or food packed in sustainable cardboard, or buying local. Basically, things that make sense to them.” Consumers are perplexed by what they see as sustainability contradictions – an organic salad, say, with a plastic lid.
That all said, 52% of people polled by The crow Flies said they would continue to do the right thing in terms of sustainability. This was encouraging, said Preston, and he suggested that organic might be better placed than most to capture and convert those good intentions.
“People already believe that organic tastes better, that quality is higher and it is healthier because of the way it is produced. But as well as that, most people can cite at least one reason why organic is more sustainable. Also in its favour, is that organic is seen as a mark of trust. That’s important because we know that people are looking for evidence of trust in the way that food is grown and produced.”
Cementing trust in organic should be a major industry priority, Preston suggested.
Time to ‘message strongly’
So, what should the sector being doing to reduce risk and raise the relevance of organic? “Our research confirms that people are prepared to pay a sensible premium for organic. But you’ve got to tell them why. People suspect lots of things about organic. And they believe organic is different. So we need to find ways of shifting people from suspecting to knowing why organic is better.”
“People suspect lots of things about organic. And they believe organic is different. So we need to find ways of shifting people from suspecting to knowing why organic is better”
And this, said Preston, could be as simple as restating some very familiar organic values and attributes – and then placing them on retreat.
When consumers were asked by The Crow Flies what would make them continue to buy more organic, consumers listed ‘If I knew how good it was for me and the planet’, ‘If I knew it was certified and sustainable’ and ‘If I knew it was produced with no chemical fertilisers’ as the top three motivators to purchase. “We might think of these as the basics of organic, but they are precisely what people say they want to know. What’s really interesting, is that regular organic consumers are more likely to want to be reassured about these three things. You’d think it would be the other way round. But it’s the opposite.”
Preston said that “simple substantiation” was the best way to summarise his advice to the sector. “We’ve got to make things simple, and we’ve got to substantiate people’s choices. We have to help people decode and understand why organic is better, quickly and easily.”
Mike Watkins agreed that communicating organic benefits effectively was now more important than ever. “It is going to be increasingly important to show shoppers the value of buying organic food. The organic sector needs to message strongly, for sure.
“Disassociate from luxury”
In a Q&A chaired by journalist Lizzie Rivera, David Preston and Mike Watkins were asked “if organic should still be considered a luxury”. Preston said luxury was “too strong a word” but conceded that in the past it was considered by some as a middle class indulgence – “a reflection probably of the lack financial turmoil at the time”. But that perception had been upturned by the urgency of the climate crisis, biodiversity loss and natural world breakdown, Preston suggested. “Now, organic is being recognised as one of a number of potential essential solutions – albeit one that carries a price premium”. Watkins suggested that ‘luxury’ was not just inaccurate, it was also an unhelpful term. “I think the term luxury is misunderstood. Luxury food is premium, indulgent. I think you need to disassociate from luxury for organic. It is a proposition actually based on sustainability.”
Image: Mike Watkins addressing this week’s Soil Association Trade Conference
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