The Organic Food Economic Market

“ORGANIC FOOD SOLD HERE.”

Everywhere you look, there is an increasing amount of organic food marketed to consumers. The Nierenberg article and class discussion prompted me to investigate further the trends that are occurring in “organic” food marketing sphere. A recent Wall Street Journal article entitled “Organic Food: Not Just for Kids – Companies Try to Push Organic Foods for Every Stage of Life” by Sarah Nassauer explores the economic motivations associated with labeling food companies’ products as “organic.” Many consumers are reluctant to join the organic band-wagon due to the traditionally higher prices and perhaps less tasty food associated with organic food. There is a recent trend where firms are trying to develop products that can be advertised and marketed to consumers of all ages and tastes, such as developing organic mac and cheese and tortilla chips. As Jeff discussed in class, Nassauer informs readers that in order for food companies to label their food as “organic,” the food needs to exceed the U.S. Department of Agriculture requirements. These regulations pertain to animal treatment for meat and production techniques for produce. Many large scale companies such as Coca-Cola Company are acquiring small organic food companies, such as Honest Tea, in order to boost their market share on the organic market. However, there are extreme price barriers associated with organic products, especially for dairy and meat, which can hinder growth in more price sensitive markets. To meet and encourage rising demand in various age groups, companies are looking towards new creative options to target more market segments, such as young adult snacks. Further, many companies are trying to sidestep the stringent “organic” requirements and instead focus on marketing their products as “natural,” which are different designations.  As consumers, we must be aware of the changes occurring in the food marketing sphere and be cognizant of the ways that firms are trying to manipulate our behavior into purchases more of their products.

References:

Nassauer, Sarah. “Organic Food: Not Just for Kids.” The Wall Street Journal. WSJ Online, 22 Jan. 2014. Web. 29 Jan. 2014. <http://online.wsj.com/news/articles/SB10001424052702303448204579336590327460328>.