Consumers want natural foods and organic foods. In general, the food industry understands that the sensory quality of a food or beverage is its most important attribute. The healthfulness of foods tends to increase in importance as people age and also as they must deal with health conditions such as cardiovascular disease, diabetes and so on. Foods can be formulated to help with specific health conditions; examples would include free from gluten (for those with Celiac disease) or reduced calorie for weight management.
“Back to nature” is an interesting concept. Consumers perceive both “natural” and “organic” products to be healthier than traditional products, although in the USA, only foods that say they are organic must meet specific criteria. Saying a food is “natural” doesn’t mean as much in that such foods do not have to meet specific regulatory standards USDA products are an exception). An August 2010 Canada Organic Trade Association White Paper entitled “Consumer confusion about the difference: ‘Natural’ and ‘Organic’ product claims” makes some interesting points.
The paper points out that since organic producers and manufacturers are required by law to comply with the Organic Product Regulations, their costs (and thus their products) are significantly higher than “natural” products that are made with less expensive conventional ingredients. “There is a wide range of price differences, but organic ingredients typically cost anywhere from 20% to 100% more than conventional ingredients. Organic meat and dairy ingredients can be 400% more costly than conventional.” Overall, this cost differential and the general lack of consumer awareness of the difference between natural and organic has led to a more robust market for natural foods. A 2008 Nielsen’s Healthy Eating Report noted that foods labeled as natural generated $22.3 billion in sales in 2008, while organic foods (UPC-coded) generated $4.9 billion in sales. The global market for organic foods is projected to have revenues approaching US$ 60 billion in 2011 according to a blog for the Global Organic Market Access. It is difficult to find estimates for the worldwide market for natural foods due, in part, to the lack of an commonly accepted definition of “natural.” It’s hard to quantify what you can’t define.
So, in the end, food manufacturers’ are giving consumers what they want: relatively low cost, natural foods.
– Claudia O’Donnell, MSc, MBA, Co-owner, Global Food Forums, Inc.
