April 1, 2010: “Niche Marketing of Fresh Product – Organic vs. Locally Grown”

Speaker
Ferdinand F. Wirth

Position
Associate Professor, Food Marketing, St. Joseph’s University

Biographical Sketch
Ferdinand Wirth joined the SJU Department of Food Marketing faculty as an Associate Professor in August 2008 after spending ten years as a University of Florida faculty member. He has more than 20 years of marketing employment experience in industry and government, including service as the Administrator of Agricultural Marketing and Development for the Delaware Department of Agriculture.

He has a B.A. degree with dual majors in Biology and Psychology from the University of Maryland Baltimore County (UMBC), an M.S. in Agricultural Economics from the University of Delaware, and a Ph.D. in Agricultural Economics from Louisiana State University, with Ph.D. minors in both Marketing and Economics.

His research program, focusing primarily on fruit and seafood marketing, has generated almost $1 million in grants and external funding. Research output to date includes one book chapter, 24 refereed journal articles in a wide variety of aquaculture, horticulture, and agriculture economics journals, 89 invited and selected presentations at professional meetings, and 26 presentations to commodity and community organizations.

Presentation Summary
The niche for organic produce has grown over the years. In 2002, the United States Department of Agriculture issued national organic certification standards. To carry the new USDA organic seal, organic produce cannot be grown with pesticides, genetically modified ingredients or be irradiated. Organic meats cannot be produced from animals that receive antibiotics. Between 1997 and 2008, total sales of organic products, including produce, meat, dairy, breads and grains and prepared foods rose from about $400 million to more than $2 billion. The Hartman Group has categorized organic consumers into the following three groups:

  • Core consumers who are the most intense and committed consumers or organic. They represent 21 percent of all organic consumers.
  • Mid-Level consumers who are changing their attitudes toward organic and it is reflected in their purchases. They represent 65 percent of all organic consumers.
  • Peripheral consumers organic. They are still in the process of understanding organic and tend to buy organic produce and dairy products. They represent 14 percent of all organic consumers.

The pathway to adoption of organic consumerism begins with peripheral consumers, progresses to the mid-level and then moves on to the core group. However, overall organic usage has leveled off. Surveys show that in 2000, eight percent of consumers purchased organic daily. In 2006 it had grown to nine percent. In 2007 it was down to seven percent. With monthly purchases of organic the pattern changes. In 2002, five percent said they purchased monthly but by 2008 eight percent said they did. Specific product attributes such as locally grown and sustainable need to layered on top of organic in order for organic to remain relevant.

The recession has affected organic purchases. Monthly sales growth of organics declined from positive 24 percent in March 2008 to positive one percent in March 2009. A majority of organic consumers have not changed habits, however. Those who have changed habits have either cut down on purchases or switched to private label. Only four percent have stopped buying organic altogether. Core consumers now make up the majority of regular users of organic. Moreover, core consumers are increasing the number of organic categories they purchase. They are moving into non-food categories such as organic fabrics as well. On the other hand, the mid-level organic consumers are leveling off the number of product they purchase either because of economic constraints or because of their reluctance to buy significant quantities of organic packaged products.

The buy-local movement is better understood by consumers than organic and while it has been a niche movement it is moving into the mainstream. Reasons for buying local are it curbs global warming and air pollution because of less need for transportation, it contributes to the local economy and supports farmers, and the produce is perceived as safer, fresher and tastier. It is now common to see local produce played up in grocery stores. Buy-local has been aided by the growth in farmers markets, which have grown from 1.75 million in 1994 to 5.27 million in 2009. The Pennsylvania Buy Fresh Buy Local program lists 76 farmers markets, 178 farms, 81 restaurants/caterers, 34 retail stores and 10 wineries and breweries. Studies show that there is little mass market support for organic apples. There is more market support for Pennsylvania grown and/or locally produced apples than for organic apples.

In an effort to provide wide-ranging views and perspectives regarding the practice of and issues surrounding agriculture, the Philadelphia Society for Promoting Agriculture (PSPA) seeks speakers representing a variety of perspectives. The statements and opinions they present are strictly their own and do not necessarily represent the views of PSPA.