'All Market are not the Same' for Organic
Organic Agriculture Centre of Canada
With the Canadian market for certified organic products topping $ 2 billion today and climbing, knowing what drives consumer purchases has become increasingly important.
Producers and marketers need to know what approaches are most effective in influencing different types of customers.
One way of doing this is to assess consumers鈥� buying preferences and then group them according to common characteristics.
That鈥檚 what researchers did in the 鈥渆鈥� study, recently published in HortScience.
鈥淭he big message is that all markets are not the same,鈥� says Benjamin Campbell, lead author of the study and research scientist at the Vineland Research and Innovation Centre of Vineland, Ontario. 鈥淵ou鈥檙e going to have different segments.鈥�
Much of the research focused on how various icons promoting organic or local produce affected consumer decisions. A total of 278 Ontario consumers were surveyed.
One of the key findings was that logos could increase the likelihood of purchase even if they don鈥檛 increase the willingness to pay (WTP).
鈥淭his increase in likelihood is perhaps just as important as increasing WTP given traditionally niche markets for local produce can now expand to other consumer segments 鈥� 鈥� states the study.
鈥淓verything isn鈥檛 just about getting a premium,鈥� says Campbell. 鈥淚f you give someone information and they buy your product, you may be as well off as if you were paid a premium.鈥�
After reviewing the responses, researchers identified three consumer segments: 鈥淐onfident in Produce Produced in Ontario,鈥� 鈥淚n Organic We Trust,鈥� and 鈥淪ocially Responsible Locavores.鈥�
In the study鈥檚 consumer profiles, the first group is characterized as having a lower income, higher local food knowledge, higher purchases of produce but less of organic, with a strong interest in foods but less willing to try new foods. These consumers are also more likely to shop at warehouse stores than farmers鈥� markets. They鈥檙e also willing to pay a small premium for 鈥渆nvironmentally friendly鈥� fruits and vegetables.
For this group, the 鈥淔oodland Ontario鈥� logo was the most effective. This provincial logo, which has been used for more than 30 years, also had the largest effect within the overall sample on likelihood of purchase and increased willingness to pay.
The second group 鈥� 鈥淚n Organic We Trust鈥� 鈥� is made up of higher-income consumers, not very knowledgeable about local produce while more likely to shop at a farmers鈥� market. These consumers believe food purchase choices matter a lot. These consumers are willing to pay a large premium for foods with an organic logo.
For this second group, the 鈥淐anada Organic鈥� logo, which was introduced in June 2009 and guarantees that products are grown based on Canadian Organic Standards, has the greatest impact. Following closely behind for impact is the 鈥淰erified Organic鈥� logo.
The 鈥渟ocially responsible locavores鈥� group is consumers characterized as having a lower education who are organic purchasers, with differences in local buying habits. These consumers are willing to try new recipes and new foods and are more likely to shop at a mass merchandiser. This group is more likely to seek price discounts, particularly at holidays or other special occasions.
For this third group, the 鈥淐anada Organic鈥� logo attracted a premium.
For all groups, in general, women are more likely to be affected by logos than men in their buying choices.
Campbell says the value of the research to producers and consumers is that knowing preferences and characteristics should result in better services.
鈥淏y finding out more about the consumer, we are helping the producer to better refine their needs to better service the consumer,鈥� he says. 鈥淲e鈥檙e saying when consumers go and purchase something, they make choices.鈥�
He says certain consumers value certain logos. 鈥淚f you can find out who these people are, then you can identify where these markets are,鈥� he says.
States the report: 鈥淭hrough identification of market segments and the characteristics that drive segment membership, producers and policymakers now have a clearer understanding of which consumers are most likely to value a certain logo and which external factors drive purchasing of fruits and vegetables.
This article was written by Steve Harder on behalf of the OACC with funding provided by Canada鈥檚 Organic Science Cluster (a part of the Canadian Agri-Science Clusters Initiative of Agriculture and Agri-Food Canada's Growing Forward Policy Framework).聽 The Organic Science Cluster is a collaborative effort led jointly by the OACC, the and industry partners. For more information: oacc@dal.ca or 902-893-7256.
Posted February 2011