Predicting the future is a dangerous business, but this much seems clear:
The government's new organic standards program, which will be fully implemented on Oct. 21, will help spearhead a new phase of growth for the category and for supermarkets that sell organics. This program will bring a new group of consumers into the organics fold.
Having said that, here's a disclaimer: This rare opportunity for supermarkets will be lost if not played correctly.
There are two excellent stories about organics in this issue (Pages 21 and 33) from which I have borrowed much information.
Let's start with the facts. The U.S. Department of Agriculture's National Organic Program spells out everything from production to labeling requirements for organic or partially organic products, including those that are fresh and processed. For instance, a product must have at least 95 percent organically produced ingredients to be labeled "organic." Rules are also spelled out for designations such as "100 percent organic" and "made with organic ingredients," and so on.
These are dramatic developments in a category that has lacked consistency. So how will this help to accelerate growth in the organic sector? Let's jump ahead to the future for a moment. Here's an SN interview with a top supermarket executive, circa 2010:
SN: To what do you attribute the big growth of organics that started earlier in this decade? Executive: It began with the government's move to develop standards and labeling. That helped extend interest in organics to consumers who hadn't taken the plunge before but gained trust when the government put its imprimatur on the products.
SN: So was this trust factor the main thing that won over consumers?
Executive: There were also price and availability developments. The new standard eventually inspired many conventional manufacturers to enter the organics business, and that increased variety and brought prices within range of non-organic merchandise.
SN: What role did supermarkets play in helping to spur this process?
Executive: Supermarkets were smart enough to merchandise many organic products in the regular aisles rather than segmenting them in separate areas. That move ensured the products and the labels would be visible to mainstream shoppers.
So there you have it, a rare look into an SN interview long before it is published. (Don't ask for our publication's 2010 stock market tables.) How certain can we be that the events described in that interview will really represent the future? It depends on how supermarkets respond to challenges such as these:
Education: Retailers will have to train associates to become sources of organics information for consumers.
Product assortment: Supermarkets should initially focus on products likely to draw the greatest interest, including convenience items and products geared for children.
Product integrity: Stores need to pay particular attention to avoiding contamination of organics by non-organics lying nearby on the shelves. Supermarkets can either help their shoppers become organic enthusiasts, or turn shoppers away to natural food stores and other competitors.
There are many unanswered questions, but one fact that is indisputable: The future begins on Oct. 21.