Almost seven in ten consumers use some type of organic product, a trend that has been moving steadily upward over the past 9 years. In the U.S., organic product sales reached over $35B in 2013 with organic foods and beverages representing 92% of those sales. In fact, organic food accounts for almost 5% of all U.S. food sales. And while the recession had an impact on organic food and beverage use, it is now rebounding after a post-recession flattening and all indications point to further future growth.
Who is using organic?
NMI's organic segmentation model breaks down consumers by differing levels of usage and commitment. There has been success in this area as the past eight years show a migration toward the more committed segments.
There is a trended increase in Millennials entering the category that represents an important development for the industry as it suggests potential longevity and future expansion.
Organic Users' lifestyle characteristics reveal a very active, community-involved, highly influential, and information-seeking consumer group. Almost four in ten are ‘new' (past year) Organic Users.
What motivates consumers to choose organic?
It is a complex combination of both positive drivers and avoidance, some of which include: a craving to eat healthy, a desire to avoid negative ingredients (primarily pesticides, hormones, GMOs), a mistrust of the food chain and manufacturers, a wish to promote a sustainable and safer environment, and having a child in the household.
The ‘healthy factor' is a key component of organics. Challenges for organic packaged goods exist, as processed foods with many ingredients are inherently viewed as less healthy, whether they are organic or not.
Despite positive growth in the industry and obvious efforts to market and communicate, confusion still abounds. Many don't know what the characteristics or regulations of organics are, they are unclear about the benefits, or they easily confuse it with natural.
The future of the organic industry is optimistic with prospects for bringing more consumers into the fold and embracing organics with greater commitment. There is an opportunity to inform consumers, thus affecting what they think. In addition, there is opportunity to facilitate action which enables feelings of peace of mind, power over making healthier choices and progress toward personal and planetary improvements.
Data Source: NMI's Health And Wellness Trends Database
- Most comprehensive data available on health and wellness; based on attitudes, behavior and product usage within the world of health and wellness
- Annual consumer research among U.S. general population adults and primary grocery shopper
- Currently 16 years of trended data: 1999 through 2014, inclusive; a total of 50,000+ consumers in the database
- Nationally representative sample of the U. S. population statistically valid at 95% confidence level to +/- 1.2%
- This fourth-quarter 2014 survey was conducted on-line among 3,000+ general population consumers; primary grocery shoppers are also identified
- Conducted via on-line methodology
Data Source: NMI's Lifestyles Of Health And Sustainability (LOHAS) Database
- Quantifies the size of the consumer market for environmentally and socially responsible products and services
- Measures the importance of environment and societal issues as well as corporate social responsibility
- Explores environmentally conscious behavior
- Determines consumer usage of LOHAS products and services
- Annual tracking study in U.S. since 2002 and globally since 2005
- Online methodology
- 4,000+ U.S. adults in 2014, nationally projectable to the U.S. adult population and accurate at the 95% confidence level to +/- 2%
- 90,000+ total global adults in database
In 2014, NMI conducted an in-depth, multi-phase project to delve into the state of the organic industry. This report is a compilation of all phases of this study in one comprehensive source for all things organic.
1) NMI Database analysis for general population and Organic Segment insights - over 7000 interviews!
- Target consumer profiling as well as attitudinal and behavioral metrics gleaned from NMI's Health and Wellness Trends Data (HWTD) (n=3000+) and NMI's Lifestyles of Health and Sustainability (LOHAS) database (n=4000+). Both databases are detailed on the next pages.
2) Nielsen HomeScan organic segment insight - analysis of 50,000+ households
- NMI's Organic Segments overlaid with Nielsen HomeScan data provide segment contribution to volume and frequency across categories, identification of opportunistic categories and need states within organic.
- Overviews are provided herein; more detailed analysis on over 40 specific organic food and beverage categories is available.
3) Consumer qualitative peer groups - 4 cities, 30+ hours of interviews
- Peer-to-peer in-home focus groups were conducted across demographic and psychographic groups to explore actual consumer emotions and behavior within organic categories and delve into barriers to usage. Detailed methodology is provided in the next pages.
4) Video Library of Insight
- A searchable video library of insights from these peer groups is available. Over 30 hours of video and transcription allows for searching by topic, key word, or segment to provide more in-depth ‘color' and detail to your analysis.
Table of Contents
Overview: State of the Organic Industry
- Positive Issues Impacting the Organic Industry
- Negative Issues Impacting the Organic Industry
- Organic Penetration Among the U.S. Adult Population
- Dollar Trends in Growth of Organic Labels
- Category Breakdown of Organic Product Sales
- Organic Penetration of Total Food Sales
- Rebounding Growth of Organic Foods & Beverages
- Global and U.S. Total Food & Beverage Introductions
- Global and U.S. Specific Category Introductions
- Five Year Growth by Organic Categories, U.S. and Global
- Summary of Global Organic Introductions
- Organic vs. GMO-Free Product Launches in the U.S.
- Usage Trends of Organic Food & Beverage Categories
- Frequency of Use for Key Organic Categories
- Length of Time Using Key Organic Categories
- Cross Category Usage
- Dollar Growth by Category
- Future Industry Trends
NMI's Organic Segmentation
- Key Segmentation Takeaways
- Segmentation Snapshot
- DEVOTEDS At A Glance
- TEMPERATES At A Glance
- DABBLERS At A Glance
- RELUCTANTS At A Glance
- Segment Migration Over Time
- Trended Organic Usage by Segment
- Organic Food & Beverage Category Usage by Segment
- Commitment to Personal and Environmental Health
- DEVOTEDS and a Healthy Lifestyle
- Questions from DEVOTEDS
- TEMPERATES' Commitment and Confusion
- Questions from TEMPERATES
- DABBLERS' Attitudes
- RELUCTANTS and Healthy Eating
- Specific Targeting for DEVOTEDS, TEMPERATES, DABBLERS
- Demographic Profile of Segments
Defining the Organic User
- Key Takeaways about Defining the Organic User
- How the Organic User is Changing Demographically
- Segment Membership by Generation
- Segment Composition of Organic Users vs. GP
- Organic Spending vs. Buying Households by Segment
- New vs. Long-Term Organic Users
- Drivers to Organic: New vs. Long-Term Users
- Health Orientation of New vs. Long-Term Users
- Understanding of Organics - New vs. Long-Term Users
- Lifestyle Characteristics of the Organic User
Capturing the Millennials
- Key Takeaways from the Millennial Organic Users
- Growth Among Millennial Organic Users
- Importance of Capturing the Millennials
- Organic Category Usage Among Millennials
- Millennials and Healthy Eating
- Impact of Corporate Environmental Involvement on Millennials' Buying Behavior
- Millennials and Environmental Motivations
- Key Takeaways of Consumer Understanding of Organics
- Consumer Confusion With Organic Definition
- Trended Usage of Natural and Organic Food & Beverages
- Confusion Between Natural and Organic
- Impact of the Natural/Organic Confusion
- Lack of Organic Regulations
- Trended Understanding Regulated Organic Attributes
- Perception of Healthy Food on a Continuum
- Importance of Organic Attributes, Trended
- Importance of Organic Attributes, by Segment
- Continuum of ‘Healthy' Organic Foods
- What is the ‘Healthiest' Organic Food?
- Perception of Healthy as Related to ‘Close to Nature'
- Thoughts About Processed Organic Food
- Keeping Organic Relevant
- Importance of Organic Messaging
Pathways to Organic Use
- Key Takeaways About Organic Motivations
- Positive and Negative Triggers to Initial Use
- Methods of Maintaining a Healthy Lifestyle
- Label Reading and Eating Healthy Foods
- Segments and Label Checking
- Trended Monitoring of Specific Items on Labels
- Concerns About Pesticides
- Perceived Benefits of Organic Foods & Beverages
- Perceived Benefits of Organics, by Segment
- Is Organic Considered Healthier than Natural?
- Reasons for Initiating Use of Organics vs. Naturals
- Motivations to Start Using Organic Dairy Milk
- Impact of a Child in Household
- Motivations of New Users vs. Long-Term Users
- Reasons for First Using Organics by Segment
- Importance of an Offensive Posture
GMO's: A Rise in Importance and Concern
- Key Takeaways as GMOs Relate to Organics
- Understanding the GMO Issues
- Desire for ‘Real' Food
- GMOs and a Degree of Fear
- Visibility of the Issue
- GMO Avoidance as a Pathway to Organic
- Trended Concern About GMOs
- Comparative Importance of Non-GMO, Organic and Natural
- Impact of GMOs on Purchase Behavior
- Not All Perceptions Are Negative
- Impact of Lack of Information
Store Brands Broaden Organics' Reach
- Key Takeaways of Store Brands' Impact
- Trended Usage of Organic Store Brands
- Organic Store Brand Usage by Organic Category Users
- Organic Category Usage by Segment
- U.S. Organic Store Brand Launches in Past 15 Years
Organic Purchase Drivers and Barriers
- Key Takeaways of Drivers and Barriers
- Consumers Reveal Multiple Opportunities for Drivers
- Importance of the USDA Organic Seal
- Impact of Not Using or Explaining the Organic Seal
- Recognition and Understanding of Various Seals
- Trended Recognition and Understanding of USDA Organic Seal
- Recognition and Understanding of USDA Organic Seal by Demographic
- Impact of USDA Organic Seal on Purchase Behavior, Total
- Impact of USDA Organic Seal on Purchase Behavior by Consumer Groups
- Acceptance of Less Than 100% Organic Content
- Perceptions of ‘Premium' as it Relates to Organic
- Importance of What is Stated on a Package
- Sources of Influence for Organic Purchases
- Preferences for Environmentally-Friendly Packaging
- Pros and Cons of Organic ‘Snapshots'
- Impact of Corporate Environmental Efforts on Organic Purchasing Behavior
- Preferred Ways to Learn About Corporate Social Responsibility Efforts
- Barriers to Organic Purchasing
- Personal Costs vs. Personal Benefits
- Barriers by Segment
Nielsen Category Analysis Overview
- Summary Overview of Nielsen Methodology and Data Availability
- Definitions of Key Nielsen Measures
- Organic Category Penetration by Segment
- Top Categories by Dollar Value and Household Penetration
- Opportunities for More Detailed Category Analysis