According to the “United States Organic Food Market Forecast & Opportunities, 2018," the US organic food market will grow by 14% over the next few years. As more and more retailers jump on the organic bandwagon, the behemoth of organics, Whole Foods, is feeling the pain with lackluster growth forecasted. In a Packaging Perspective I wrote last year, I mentioned how Wal-Mart is emerging as an important player in the industry. Well, that is certainly taking place. The health food category is getting a lot more crowded as Kroger, Costco, and several regional retailers take aim at organics. In fact, sales of organic products at Costco have doubled in two years to about $3 billion a year.
Retailers are not the only ones taking advantage of this trend; small food manufacturers are, too. According to a Wall Street Journal article, companies are doing whatever it takes to make consumers latch on to their products. The truth is, being “organic” doesn’t cut it for everyone anymore. A variety of other labels are catching consumer eyes and pushing companies to get certified in these newer areas. In some cases, start-ups are spending over 10% of revenues to meet these standards.
Below are definitions of top claims companies are striving for:
USDA Organic – At least 95% of ingredients have to be organic to be considered USDA Organic. Products that do not meet this high standard can still call out their organic ingredients in the food contents.
Fair Trade Certified – Products that meet a certain level of environmental, labor, and developmental standards. Fair Trade International and FLO-CERT are the two organizations that help set the standards and certification.
Certified Gluten-Free – The Gluten-Free Certification Organization (GFCO) provides third-party certification on foods, making sure they do not have gluten.
Non GMO Project Verified – The Non-GMO (Genetic Modified Organisms) Project Standard sets the verification process products go through to determine that they do not have any GMOs in them.
We know the lengths to which companies will go to open up new avenues for growth. We have also seen consumers' increasing willingness to spend where value can be quantified. It will be interesting to see how this relationship develops in the coming years. Will consumers continue to open their pocket books to feel good about the food they are consuming, including how it is being produced and delivered?