[By Russell Sawchuk from market research reports on organics prepared by Rosalie Cunningham and Betty Vladicka of Alberta Agriculture, Food and Rural Development]
"While total consumption of food and beverages in North America and Western Europe is stagnating or merely reflecting population growth, organic food sales are growing at 20% annually."
If the deer and elk farming industries can get their minds off breeding stock, antlers and hunting preserves for a moment, and concentrate on their other major product - venison - they will see a golden opportunity staring them in the face!
In this article, I will look at the rapidly growing "organic" or natural food markets - trends, drivers and consumer profiles. I believe deer and elk farmers are well positioned to take advantage of the increasing demand by consumers for natural products. However, the industry has to get off its collective butt and move to capture its share of these emerging markets.
Organic food, also referred to as organics, is food grown under a production system that promotes soil health, biodiversity, low stress management of animals, and sound environmental practices without the use of synthetic fertilizers, pesticides, growth regulators and livestock feed additives. The use of genetically modified crops, irradiation and sewer sludge is also prohibited.
In 2000, worldwide sales of organic food products were estimated to be $20 billion (US), which is two percent of the total food industry, with average growth rates of 15-20%. Sales in the US were $7.8 billion (US), Western Europe $7.2 billion and Canada $1 billion (Cdn). Although organic trade worldwide accounts for a small sector of the food industry, it has become the fastest growing segment.
The drivers behind this rapid growth are an increased consumer emphasis on health and nutrition, an aging population, and consumer concerns about food safety, environmental protection, sustainable agriculture and genetically modified organisms (GMOs). Other factors fuelling this growth include increased distribution into mass-market and natural food supermarket chains, more competitive prices, entry of large mainstream food marketers, sophisticated advertising campaigns and increased availability of organic ingredient supplies.
In the United States, organic acreage has nearly tripled in the last seven years. In Canada, there were about 2,300 certified producers in 1999, a 20% increase from 1998. About 3% of Europe's farmland is devoted to organic production. The governments of Germany, Switzerland and Austria are offering farmers cash incentives to shift into organic production. Currently 10% of agricultural land in Austria is certified organic.
Of ten countries sampled in an Environics study, those who frequently purchase organic food range from 40% of the Canadian population, 36% in the US to 63% in Germany; the average was 47%. Other surveys indicate that around 50% of US consumers are frequent buyers of organics. The organic consumer profile is demographically similar to the mainstream.
The reasons given for buying organic food are concerns about pesticides, pollution and food safety in tradition food. The top five concerns in the US and the other countries studied are bacterial contamination; pollution in the air, water and soil; food safety; use of chemical pesticides; and, diseases that animals may pass to humans. Canadians are also concerned about antibiotic and hormone use (83%)and GMOs (74%), as is the rest of the world.
Roughly two-thirds of the population in most countries believe that organic food is safer and healthier, and about the same proportion are willing to pay a ten percent premium for it. The intention of consumers to buy more organic food ranges from 16% in the US to 53% in India; worldwide it is approximately 30%. Consumer perception is that organic production practices address many of their health and safety concerns.
Where do consumers buy their organic food? In the United States, some 49% of organic purchases are made at some mass-market outlet such as supermarkets. Health and natural food stores account for the another 48% and farmers' markets for the remaining 3%.
What influences food purchase decisions? According to a 1996 report on Canadian eating habits, the following factors were the most important: taste (93%), nutrition and health (89%), ease of preparation (68%), preparation time (66%) and price (62%). Venison producers, take note.
Research has found that there are three main triggers that convince people to choose organic food: a) children, b) specific food allergies, and c) healthy lifestyles.
Children are an important part of the equation in organics. They have a great deal of influence directly on the food purchases as time-pressed parents enlist their children in food shopping and preparation. These young future consumers are savvy about food, nutrition and health issues.
Another factor related to choosing organics is that people worry more about what their children eat than what they themselves eat. Findings that "…children have heightened vulnerability to a variety of exposures as a consequence of their developmental, behavioural and physiological characteristics" have influenced parents' concerns about their children's diet. Seventeen percent of households have a member on a special diet. Sixty percent of shoppers base their purchases on disease management or risk reduction. Today, it is estimated that 1-2% of adults and 4-6% of children have food allergies.
Ecolabel categories have developed as a marketing strategy to address consumer concerns. Food ecolabels include organic, natural, pesticide-free, free range, farmed free, no antibiotics and other. An American survey showed that 75% of consumers believe that "all-natural" and organic mean the same thing. Further proliferation of these labels without consumer education will likely add to the confusion.
Consumers, producers and processors all agree that national standards and use of a nationally sanctioned label would provide a more consistent meaning of "organic", facilitate market growth, build consumer confidence and help reduce the current confusion caused by the multitude of ecolabels. Presently, there is no policing of organic standards or the use of the term "organics" in Canada.
In the United States, when the National Organic Program is implemented, it will be a federal offense to label any product organic unless it has been certified. All uses of the term organic will be regulated. Organic authenticity must be verified for exports to Europe. Of course, the standards for organic certification in the United States and Europe are different.
It is obvious that farm-raised venison fits nicely within the definition of an organic product and thus has great potential in organic meat markets. However, to be successful in this marketplace, producers will have to go through a process of being "certified organic," especially in the United States to meet regulatory requirements.
In a future article, I will describe the processes and requirements that venison producers will have to meet in order to become "certified organic." Meanwhile, take a careful look at this opportunity, and begin thinking and planning about what you as a potential venison producer have to do to profit from it.