Presentation on theme: "Key Market Drivers in the Organic Sector Dr Maeve Henchion Ashtown Food Research Centre, Teagasc."— Presentation transcript:
Key Market Drivers in the Organic Sector Dr Maeve Henchion Ashtown Food Research Centre, Teagasc
Agenda Market context Awareness and understanding of “Organic” Is organic food delivering what consumers want? Some supply chain issues Change!
Market Context Total Organic market is valued at more than €100 million – Fresh + Chilled €77.3 – Ambient €26.2 – Frozen € 0.7 Grown by 82% in the last 2 years Signs of growth slowing down
Who Buys Organic Food? 2 million grocery shoppers – 52% current organic buyers (purchased organic in the past 3-6 months) – Wide range of demographics
What kinds of Organic Products are Irish shoppers buying?
Awareness of Food Labels Consumers aware of organic label
What does “Organic” Mean? What does IOFGA say? – Environmentally friendly farming – Animal welfare – Farming without drugs, antibiotics, wormers – Prohibiting GMOs – Prohibiting chemicals pesticides – Healthy soil
Consumers – Eurobarometer 2005 Irish consumers associate food – with taste – As a vital necessity – Health – pleasure Positive hedonic connotations
Factors influencing food choice Irish shoppers are guided by quality – health less important (10%) 48% of Irish shoppers state “quality is just as good as non organic” (Nielsen) 38% are not sure about the benefits of organic (Nielsen) “25% don’t trust the credentials of organic products” (Nielsen)
Is organic food delivering what consumers want?
Fear of Food Most Irish consumers associate few risks with food (spontaneous responses) BUT when consumers are reminded of possible risks – response changes
Worry is an important determinant of consumer’s attitudes to food safety! Consumers are more likely to worry about factors that are outside of their control. – Worry Scale Top end – external factors which are clearly identified as dangerous e.g. pesticide residues Mid-range – environmental pollutants, GMOs, BSE Low-end – personal factors linked to their own behaviour e.g food hygiene at home
Profile of Worriers EU aggregate research results report that: – 34% consumers can be classified as very worried about food (42% a bit worried, 23% not very worried) – Women more likely to worry more than men – The longer people stay in full-time education the less they tend to worry about potential health risks – 40-54 age group most inclined to worry – Stay-at-home house persons (most often women) are most likely to be classified as very worried.
Discounters have entered the Irish organic market! Germany is the biggest market for organic products in Europe but consumption still low with 3.5% share of total food market. German discounters (Aldi & Lidl) are offering organic food produce – could have an impact on local organic outlets e.g. farmers markets and independent retailers. Will change consumers perceptions on “expensive” organic produce.
Putting the pieces together Irish organic market is small but growing. At least 50% of grocery shoppers buy organic but core group small Awareness of organic is high. “Benefits” of organic appeal to the “worriers” need to broaden appeal to include “less worried” and not worried by broadening appeal of organic products to include consumers need for quality, taste, pleasure German discounters could change perception of “expensive” but will it be at expense of commodity image?