RALEIGH, N.C. - For
the past few years, one of the few certain trends for American
grocers has been the growing popularity of organic food.
In just one decade,
from 1997 to 2006, sales of organic food have grown by nearly 80
percent to $17.7 billion.
The boost has been
driven by an ever-growing chunk of the population that considers
organic food healthier, safer and better for the environment.
For now, those
reasons are still spurring shoppers to move toward organics.
But with the
economy slowing down and household budgets tightening, the
once-sure bet for stores may be a bit shakier.
A slowdown in
organic purchasing would be particularly troublesome for grocery
chains, which have been pumping millions of dollars into improving
their organic selections and developing their own store-brand
organic lines.
There are no
estimates on how much the industry has invested in organics. But
spurred by the success of chains such as Whole Foods and the steep
demand, many chains have been expanding their organic selections
as fast as possible for years.
Harris Teeter
introduced its HT Naturals products in April 2002, with 26
products. Now there are 188 HT Naturals items, with more items
such as organic frozen waffles and salad dressings under
development.
Kroger expanded its
Naturally Preferred product line to 270 items and boasts more than
60 products in its premium Private Selection organics line.
"The way that
supermarkets have beefed up their organics - it's definitely made
them more vulnerable," said Jeff Wells, a reporter who covers
health and wellness for industry publication Supermarket News.
"There are
core consumers of organics like the people who do a lot of their
shopping at Whole Foods and co-ops and things like that,"
Wells said. "They believe in it, they're loyal to it, and
they'll give up a lot of things before they give up organic. The
people on the periphery are the question mark."
Nearly 60 percent
of U.S. households buy some organic items, and stores say they are
not expecting demand to slow down.
So far, sales of
organic items have not decreased at BJ's Wholesale Club, said
spokeswoman Stephanie LaCroix. BJ's is another chain that has
added more organic products over the past year.
"People
placing a premium on maintaining a nutritious lifestyle seems to
be the main reason why we have not seen a decrease," she
said.
Other stores are
even expecting a small increase in organic sales.
"Generally, in
the past when we've had a weaker economy, we do not see a downturn
in our sales," said Whole Foods Market spokeswoman Teresa
Jones. "We see if anything, it might even be going up a
little bit because people are actually eating out less and cooking
more at home."
Kate Stone said she
sees her investment in organic food as a big-picture approach to
life.
"In the long
term, I'm saving money because I'll stay healthy," she said.
"That would be one of the last things I'd cut back on."
Still, Stone said,
staying committed to organics is getting harder.
She has started
driving her Mini Cooper instead of her truck to conserve gas and
has cut back on other items such as clothes and going to the
movies. But she refuses to cut back on organic food.
Last week, Stone
was at a Fresh Market store in Raleigh with a cart full of
wild-caught salmon, asparagus and peppers. She figures she spends
$20 more a week plus the cost of gas each time she shops for
organics in Raleigh instead of buying the nonorganic produce
offerings near her home in Warren County, N.C.
"It's still
almost always less than eating out," she said.
But devoted
organics shoppers may not be enough to keep stores stocking tons
of organics.
If enough shoppers
cut back, stores will be forced to either try to find an inventive
way to get organic items selling or simply cut back on the space
allotted for organics, said Brian Todd, president of the Food
Marketing Institute, a New Jersey group that studies food prices.
"Shelf space
is at a premium," he said. "At many supermarkets, they
charge slotting allowances where they charge companies fees when
they have a new product. It is costly. It is very valuable
space."
Staying committed
to organics may become even harder this year for shoppers.
Organic farmers are
facing a variety of factors, including higher demand and higher
costs for things like feed that could push prices up, said Holly
Givens, spokeswoman for the Organic Trade Association.
Grocery stores are
likely to raise prices across the board this year, too, Todd
added. With food prices increasing overall, people might think
twice before paying more for organics.
"For all of
2007, wholesale prices were increasing much faster than retail
prices, so supermarkets were absorbing a lot," he said.
"They've kind of held the line as much as they could, and
then we'll see prices probably go up even more at the retail level
this year than last year."
The Food Marketing
Institute is predicting a 5 percent increase in overall retail
food prices this year, up from 4.2 percent last year.
Still, organic
items only make up 2 to 3 percent of food sales, said Wells of
Supermarket News.
If people stopped
buying organics altogether, "it definitely wouldn't bankrupt
the store," he said.
The outcome hinges
on shoppers like Edy Striebel of Raleigh.
"I would love
to buy all organic, but I kind of do half and half," Striebel
said.
The mother of three
- two of whom are in college - has to balance healthy eating with
expenses.
"I try to get
things that are grown in the United States," she said.
"But it's kind of like a bonus if something's organic."
WHAT'S YOUR ORGANIC
SIGN?
The Natural
Marketing Institute divides organic shoppers into four different
categories. Over the past three years, the number of "devoteds"
has almost doubled while the number of "reluctants" has
dropped by more than two-thirds. Which type are you?
Devoteds (18
percent): The most committed shoppers to organic and its ideals;
the most likely to have changed their lifestyle to integrate
organics.
Temperates (22
percent): Have modern organic attitudes and fit organic into their
lifestyle; the more they use an organic product, the more it
becomes a treat.
Dabblers (41
percent): Are noncommittal about organic, they can take it or
leave it.
Reluctants (19
percent): Are the least trusting of organics and believe the
conventional products are just as good and that organics are not
worth the extra cost.
There are ways to
save money on organic foods. Here are some tips:
_ Learn how to spot
rip-offs. Grocers are legally required to stack organic fruits and
vegetables where they won't be exposed to water runoff from the
misting of conventional produce, which could contaminate organic
items with pesticide residue. If you see organic produce below
conventional produce, find somewhere else to shop.
_ Don't be misled
by nonorganic foods placed in the organics section of the store,
such as "all-natural yogurt." The two are often jumbled
together, but they don't mean the same thing.
_ Many major
organic brands, including Stonyfield Farm, Annie's Homegrown,
Organic Valley and Earthbound Farm, offer coupons at their Web
sites.
_ Compare prices.
Many chains such as Sam's Club, Costco, Wal-Mart and Target carry
organics, but before you buy, check prices at other stores to make
sure you're getting the lowest price. You can often find organic
rice, flour, beans, granola, nuts, pasta and peanut butter for
less in bulk bins at many grocery stores.
_ Look for
store-brand organics and bulk packaging. Examples include Whole
Foods Market's 365 Organic Everyday Value, Kroger's Private
Selection Organic and Trader Joe's. Costco says its private label
Kirkland Signature organics offer at least 20 percent savings over
name brands.
_ Join a food co-op
that offers local and organic foods. Some have a membership fee
and may require members to volunteer at the co-op for a few hours
each month. Members get a discount when they shop. To find co-ops,
visit www.coopdirectory.org or www.localharvest.org/food-coops.
_ Buy produce in
season when prices are lowest. To see what produce is in season
near you, click on your state at www.sustainabletable.org/shop/eatseasonal.
If possible, freeze or preserve produce for later. You may be able
to get a discount from local farmers by buying a membership in a
community-supported agriculture program and sharing it with
friends.