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Wednesday, December 10, 2008

Reading the Recession through Organics

I read a lot of marketing news (not just in organic goods), since one of my paid hobbies is thinking about consumer behavior. Just in case anyone missed the announcement, we are officially in a recession and it looks to be a long one. What this means in the retail world is a bit of panic, since most of the people working in these industries have never experienced a cultural moment when sales are, well, more complicated. This week the mainstream news is all over a new study by Mintel research that shows a downturn in sales of organic goods. Part of the panic is that organics were showing steady growth as late as June and July of this year (when we weren’t officially allowed to say the “r” word yet) – and now they are not. The Associated Press and other newspapers are quick to claim that this proves people’s lack of “real” interest in organics, that indeed, price trumps moral conviction when push comes to shove. Just a quick note of reality from outside the fray: first of all, Mintel’s data doesn’t show a complete meltdown. Indeed, the National Specialty Foods Memo demonstrates, quite successfully, that what we’re looking at is probably less growth than expected – but still growth – in the organic and sustainable retail markets. Second, certain goods are still doing well because people have developed brand loyalty and preferences (in the world of food, that means things like Stonyfield Yogurt, Annie’s Homegrown Mac and Cheese, and Arrowhead Mills products). The other thing to note is the “mainstreaming” of organic products in stores like Wal-Mart, Target, and your friendly neighborhood supermarket. In-store brands are doing very well right now.  While Whole Foods fights to prove it’s not a monopoly and develop a new image as “the Whole Deal,” people are finding more organic products at lower prices in a wide range of places.  My one caveat for the savvy consumer, though, is that mainstreaming and cost-cutting means we must pay closer attention to how these new venues are defining – and producing – sustainability. Social media – blogs like this one, word-of-mouth from friends who’ve tried products, and recommendations from online sources – provide a respite from marketing blitzes and panicked selling.

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