The lessons of organic growth

When major brand manufacturers and food retailers start moving into “alternative” trends, with a view to exploiting their “mainstream” potential, they are courting disaster. Right or wrong?

Right and wrong. There is, of course, an inherent contradiction in the agents of mass consumerism adopting a creed of less equals more – a creed which, in any case, is the very antithesis of commercialism.

Such, some would say, was the incontrovertible lesson of the marketing community’s flirtation with the green agenda. And, in a way, they would be right. For brand manufacturers and retailers fell over themselves to misunderstand what the consumer actually wanted. It wasn’t just a question of cynicism – though there was plenty of that; they were also gullible. They believed the research when it told them that consumers cared passionately about the environment and were prepared to pay a premium price for sustainable products; and were greatly surprised, therefore, when their offerings were treated with indifference or disdain. This was not the public their focus groups had led them to believe they were dealing with.

Of course, consumers had every right to be sceptical when confronted with recycled paper packaging and detuned detergents as symbols of companies’ new found commitment to environmentalism. But it wasn’t just the gimmickry that put them off; somewhere they didn’t care that much either. They simply didn’t buy into the “added value” with fancy price label attached.

How very different has been the organic food phenomenon. Not so very long ago this sector, too, had a reputation for being “fringe” and “alternative”. Its image was cottage industry – farm shops, urban health shops and a besandalled clientele. Today, it’s big business: a sector worth &£1bn, whose main concern as we move through 2003 is that growth has slowed from about 33 per cent a year to a mere 15 per cent. What’s more, it’s one in which the big battalions are playing an increasingly important role. Major food companies, such as Heinz and Masterfoods, are heavily involved; while supermarkets – according to recent Soil Association figures – now account for 82 per cent of organic produce sales.

It might be thought that this was an area inviting no less consumer scepticism than the “green” trend. After all, as the Food Standards Authority is fond of reminding us, “organic” is a certification of produce grown in a certain way, not a guarantee of superior quality. So, once again, there is little to prevent the predatory operator touting indifferent product at fancy prices.

In fact, this has not, on the whole, been the case. And the main reason is easy to perceive. Consumers don’t need to be equipped with a degree in environmental sciences to tell the difference, they can simply taste it. The Soil Association’s stamp of approval is all the proof they need that the product is also additiveand pesticide-free. Put another way, consumers are not for the most part buying organic because it’s called organic, but because it’s a demonstrably superior product.

Success in conveying this quality message has, however, brought its own set of problems for smaller producers and retail outlets. Such is the mainstream appeal of organic nowadays, that it is easy to over-extend on slender resources. This seems to be the story behind the virtual disappearance of RHM’s Enjoy Organic Company recently. Smaller companies will have to create a successful niche positioning, or be swallowed by the majors.

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