Organic: down but not out

by MEAT&POULTRY Staff
Share This:

In early March the Organic Trade Association will issue its newest market survey, which will include an update on the market for organic meat and poultry, but already anecdotal evidence is suggesting that the spectacular growth the organic segment has enjoyed over the past several years is slowing down – and in some market segments it has nearly stopped.

"Organic beef has fallen off to nothing," Charlie Moore, vice president of sales and marketing at Maverick Ranch Natural & Organic Meats, told MEATPOULTRY.com. "In organic chicken what we’re seeing is consumers trading down from organic chicken to natural or conventional chicken. And the natural side has taken a hit as well."

But a representative for one of the nation’s largest natural and organic food retailers said that what appears to be happening in this company’s stores is not a switch from organic to conventional meat but a trading down from high-end cuts to cheaper cuts.

Barbara Haumann, spokeswoman for the OTA, said she expects the association’s new report to show that the organic food market is continuing to grown, "but the growth is slowing." Still, she added, "the reasons why people originally were attracted to organic meats still apply."

Applegate Farms, a 21-year veteran of the organic meats segments, is still seeing strong sales nationwide. "Our growth has slowed, yes, but it’s still growth and it’s still strong compared to the rest of the retail market," Gina Asoudegan, Applegate’s communications manager, said. Part of the reason, she added, is that Applegate’s customers are very loyal to the brand. "We’ve never done any advertising. For our whole history it’s always been word of mouth, by engaging authentically with the consumer base. That’s given us very strong customer loyalty."

Echoing Haumann, Asoudegan also points out that the organic market differs from the conventional retail food market in a significant way. "Organic meat is a belief-driven market, not a price-driven market. The people who buy organic meats do so because they don’t believe in feeding animals antibiotics and hormones, because they believe in handling the animals with compassion. When prices go up and the economy gets tough, those beliefs don’t necessarily change."

Asoudegan admitted, however, "that we’ve never really had a chance until now to see how the overall organic business holds up to" a major economic downturn. "I guess we’ll find out."

Moore isn’t seeing the same degree of customer loyalty in the organic segment that Applegate thinks is there. "Consumers say they still want these products and for the same reasons they always wanted them, but some people are now having to make choices that are influenced by their wallet as well as their conscience," he said.

In January of 2008 Haumann prepared a report on growth in the organic meat segment for the OTA’s Organic Report publication. She called it "the fastest growing segment in the U.S. organic food market" at the time, "[d]espite price hurdles and limited supplies…" The OTA’s 2007 Manufacturer’s Survey stated that the organic meat segment grew from $256 million in overall sales in 2005 to $330 million in 2006, a 29 percent increase. The report quotes representatives from several organic meat processors, including Applegate and Maverick Ranch but also including a handful of companies, such as Davis Mountains Organic Beef in Texas, that were in business as recently as late 2007 but are no longer.

"It’s not a surprise that the companies still doing well out there are the ones that have been in the business the longest with well-established brand," she told MEATPOULTRY.com. "People still buy what they know."

Comment on this Article
We welcome your thoughtful comments. Please comply with our Community rules.

 

 


The views expressed in the comments section of Meat and Poultry News do not reflect those of Meat and Poultry News or its parent company, Sosland Publishing Co., Kansas City, Mo. Concern regarding a specific comment may be registered with the Editor by clicking the Report Abuse link.