With increasing interest in organic certification, the organic industry met at the Bio Brazil Fair (BioFach Latin America) in São Paulo on 7-10 June 2017. Exhibitors from the national and international organic industry attended the event with the aim of disseminating organic culture and promoting its inclusion within healthy lifestyles.
The event was a get-together for suppliers, partners and customers. Manufacturers presented information about the organic and natural cosmetics industry. In addition, speakers and panellists talked about the main opportunities and challenges within the industry.
Is communication on organics reaching its target?
Communication and education was one of the key areas of discussion. There are a large number of consumers that do not know what organic means and they are therefore not willing to pay a premium for it. It is essential that manufacturers and organisations invest in this so that consumers are more aware. In this context, Denise Godinho, Communications Director at the International Federation of Organic Agriculture Movements (IFOAM), revealed that communication on organics is not reaching its target to the extent needed. She focused on how campaigns that engage with consumers from an emotional point show better results.
A good example of this is the campaign developed by the Coop chain of grocery stores, in partnership with the Swedish Environmental Research Institute. Together, they released a video called “The Organic Effect”, which saw a trial conducted on a family of five for three weeks. The family used to follow a conventional, non-organic diet as it was more affordable but they switched to organics for two weeks and gave urine samples. The video was based on the results of the experiment, which showed that before switching to organic, their urine contained pesticides, fungicides and other agricultural chemicals, while after eating organics, the majority of the chemicals were no longer there. This type of campaign engages with the consumer from a personal and emotional perspective and definitely has an influence on purchasing decisions.
Nature and More, which is the "trace & tell" trademark of Eosta (Europe's importer, packer and distributor of organically grown fresh produce), also launched its first campaign ever, with “True Cost Transparency” for organic fruit at the point of sale. “Buy organic pears and save 6m3 of fertile soil” is one of the claims seen in supermarkets during the campaign.
Both examples show the main areas where manufacturers can successfully engage with consumers: via the health perspective and social and environmental responsibilities. Claims like “all natural”, “chemical free”, and “no artificial preservatives or colourings” are the most sought after by consumers, in line with the clean label trend. In addition, consumers are willing to pay more in order to support companies that demonstrate concern for employee welfare, community development, environmental sustainability, and human rights. Organic products definitely fit in this context.
Overall, the best way to reach the consumer is through simple messages, which are science-based and show examples, visual symbols and practical recommendations.
The organic industry consolidates
The second key area tackled at the event was based on growth opportunities and the future of the organic industry.
Most of the organic industry is concentrated in developed countries, mainly in North America and Western Europe. This is due to consumers in more economically developed geographies being in a better position to afford the price difference between organic offerings and regular products.
Emerging countries are following in their footsteps however and are estimated to see positive growth in the coming years, with China in particular emerging as a key market for organic ranges, mainly due to past food scandals.
In fact, food safety is another market driver for the organic industry, alongside health concerns and environmental responsibilities, but the increasing distribution channel for these ranges is also important: many retailers have integrated supply networks; conventional supermarkets are opening organic retailers; there is a rise in organic private label products; and a large number of manufacturers are consolidating themselves in the organic space through mergers and acquisitions, with the clear example of Danone acquiring Whitewave. The organic trend is also being seen in catering and foodservice, with companies like McDonalds including some organic ingredients in their offerings.
Increasing demand for organic products will result in all of these trends continuing to grow in the forecast period, with a chance that demand will outpace supply at some point, mainly in North America, which is the largest organic market in the world.