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Organics – a robust and growing market

RandallAnthony CommunicationsComment
 Consumer demand is driving a rapid growth in organic products – both in quantity and variety – a trend that presents opportunities and challenges for Canadian organic growers and producers. istockphoto.com

Consumer demand is driving a rapid growth in organic products – both in quantity and variety – a trend that presents opportunities and challenges for Canadian organic growers and producers. istockphoto.com

Long gone are the days when buying organic at the grocery store meant choosing from a limited selection of fresh fruits and vegetables in a small corner of the produce section. Organic food products have evolved from niche to mainstream, and today’s supermarket shoppers seeking organic options have much to choose from.

Elizabeth Crawley has witnessed this evolution first-hand, over her 17 years at Loblaw Companies Ltd., which includes Loblaws, Fortinos, Provigo and other retail banners across the country. As the senior category director of health food, she currently manages the natural foods category – approximately 60 per cent of which is organic.

“When I first began in this position, natural food departments were small and still relatively rare,” Crawley says. “The growth has been significant.

The space allocated to these departments in our stores has steadily expanded, and in tandem, we have seen more innovation and variety – and it’s all been in response to customer demand.”
Much of the demand for organic food products is being led by mothers, she says. “We see our primary consumers in this area to be moms, who increasingly are raising ‘organic babies.’ They want products that don’t contain artificial colours or sweeteners, for example.”

The space allocated to [organic] departments in our stores has steadily expanded, and in tandem, we have seen more innovation and variety – and it’s all been in response to customer demand.”
— Elizabeth Crawley is senior category director of health food at Loblaw Companies Ltd.

Dairy products are also a common consumer entry point into the organic category, adds Crawley. “The demand for organic milk is astounding and continues to grow. And often, as their children get older, mothers move into areas such as organic cereals and granola bars.”

Consumers in other demographic segments are also looking for more organic offerings, says Lynne Brenegan, president of UNFI Canada, a distributor of natural, organic, kosher, specialty and ethnic food products. She specifically mentions “new Canadian families, whose traditions focus on fresh, local and healthy ingredients.”

According to Crawley, sales of organics and other natural foods are strong in urban areas and in towns with high populations of university students. “We’re also seeing more demand from baby boomers,” Crawley says. “As that population ages, they are looking to take care of themselves and be more proactive about their health – so the adult segment is growing as well.”

She adds that Loblaw Companies has responded to the surge in customer demand with an ever-growing array of organic products.

Brenegan says the increasing demand presents both opportunity and challenge. “More and more, conventional retailers are looking to gain access to these items while expecting organic brands to operate to the same fill rate and distribution standards as major conventional brands,” she explains.

Challenges of meeting the fill rate, a measure of how a supplier can meet the demand, can lead to fines and penalties and impose significant financial duress for newer organic brands, thereby impeding their ability to invest in equipment, facilities and people, says Brenegan.  

“At the producer level, we see lots of opportunity and need for young farmers to get into organic production,” she says. Believing the growing demand cannot be met by the existing base of certified organic farms, Brenegan calls for “robust education and business development programs for young would-be farmers, as well as more incentives and programs for farmers who are willing and able to transition from conventional crop or livestock production to organic.

“If we want to make these products more widely available, we need to address the supply issue with real investment and commitment,” she adds.

Crawley says the ability to innovate and boost the variety of affordable organic products has increased as the Canadian organics sector has matured. “When we first began, the majority of our products came from the U.S. because there weren’t a lot of Canadian organic farmers and companies. Today, we have many Canadian partners and they are giving us access to a range of new and exciting products. We and the broader organics industry have grown together.”

Brenegan adds that “this is a fantastic industry full of people who have pioneered organic food production and business practices over the last 30 years, at the ready to transfer their knowledge and experience.

“We have consumers who see the critical link between food and the well-being of our children and our ecosystems. We have young farmers and entrepreneurs forging strong links to their communities and reaching out to each other and their consumers via social media, and we have acreage that is ripe for transition to organic,” she says.

The organic industry has a great deal to be proud of, yet it needs to tackle the business models and practices that have become obstacles, says Brenegan. “To gain the kind of scale we are seeking, we have to make the choices that offer a future for the organic industry in Canada: where we spend our grocery money, how we spend our time as advocates and role models for our children, and at the ballot box.”

View entire report on globeandmail.com