Green Marketing expert: organic food sales holding their own in crisis

27-03-2013

A survey of shopping habits by the KPMG agency published this week suggests that organic food products have lost their initial attraction: shoppers find them too expensive and often question their superior quality. According to the results of the poll only 4 percent of Czechs buy organic food on a regular basis. 37 percent of respondents said they did so occasionally and approximately the same number of people said they had tried organic products in the past but no longer shopped for them. So are Czechs losing interest in organic food and should organic farmers and producers be worried? I spoke to Tom Vaclavík of Green Marketing to find out how organic products are doing on the market.

Illustrative photo: Masha VolynskyIllustrative photo: Masha Volynsky “If you look at the figures from KPMG that were gathered in the course of February and compare it with the research that INCOMA gathered in 2008 you can see a positive development, not a negative one. I can prove that on two figures: KPMG found out this February that 4 percent of Czechs regularly buy organic food. INCOMA ascertained the same figure five years ago i.e before the economic crisis. Clearly the share of Czechs who buy organic food has not changed. And if you look at the KPMG figures from this year they show that 37 percent of Czechs buy organic food occasionally. If you look back at the results of polls from 2008 and 2009 it was 27 percent of respondents who said they bought organic food occasionally. So there you have a growth of 10 percent.”

The Agriculture Ministry aims to raise the share of organic food in overall food consumption from the present 1 to three percent by 2015. Is that a realistic goal do you think?

“No, that is completely unrealistic. Today the share of organic food in the overall consumption of food and drinks is below 1 percent and the 3 percent figure is completely out of touch with the reality. “

Do you feel that there are a lot of misconceptions regarding organic food here in the Czech Republic?

“I think so. Particularly if you look at the KPMG results they show some of the misconceptions, especially as concerns organic food prices. Eighty percent of consumers buy organic food in large hypermarkets or supermarkets, which is where retailers try to offer the cheapest food products and when shoppers compare the prices of these cheap goods with the price of organic food products they are shocked by the price difference. But if you look at the quality of organic food products and the other conventional products they are not comparable. So in reality most consumers are comparing apples and pears. If we were to compare high quality conventional products with organic food products the difference in prices would not be so big.”

Tom Václavík, photo: archive of Radio PragueTom Václavík, photo: archive of Radio Prague What organic food products sell best in this country and do Czechs want home grown goods exclusively –is the source important?

“I think that is getting more and more important. I think that the source and the place of origin of food in general has become one of the most important issues for Czech shoppers. With organic food it is much easier to find the place of origin because that must be stated on the label. So if Czechs really want to buy local goods then organic products would be the best choice.”

Who buys organic food products in this country?

“Well, if you look at the KPMG survey and other research results the difference between men and women is not that high but women tend to buy organic more. The typical buyer of organic food would be a woman who is either expecting a baby or has young children and wants to buy the best possible food for them.”

How does the Czech Republic compare in this respect with other European countries –Germany for instance?

“As regards who buys organic food it is the same or very similar, as regards the size of the market we simply do not compare. The German organic food market is the largest in Europe and the second largest in the world. It is worth six billion euro while the Czech organic food market is worth 1.5 billion crowns. So there is no comparison. The Czech organic food market is very, very small and that is also one of the reasons why the prices of organic food seem to be so high –or actually are higher than in Germany compared to conventional food products. If you look at Germany the market is very big, very developed, there are lots of companies competing on the market and the economies of scale are being used very effectively.”

Do you feel that Czechs have enough information about organic food in order to encourage more people to buy it?

Illustrative photo: archive of Radio PragueIllustrative photo: archive of Radio Prague “Not at all. If you look at the results of the KPMG survey and other studies Czechs do not understand the concept and do not trust organic food products simply because they do not know what it means. Organic production has nothing to do with the final quality of the product with regard for example to taste. It only covers the process of production on an organic farm or organic production line. Organic foods guarantee that no chemicals or pesticides were used in the process of their production. Another advantage in buying organic food is that it is much easier to ascertain their source. Therein lies the quality of organic foods.”

In one of the polls, 38 percent of those who do not buy organic food products say they do not believe they are of superior quality. Where does this lack of trust stem from? Could it be the overall quality of food products on the market and the scandals surrounding food that did not actually concern organic products?

“Yes, I think it all comes together and it also relates to the lack of information consumers have about organic agriculture and organic food products which we already mentioned. If consumers do not properly understand what organic means there cannot be trust and this trust would be encouraged or increased only by more information campaigns about the concept of organic products. For instance Germany –between 2005 and 2010 – spent 40 million euro every year informing German consumers about the advantages of organic food. In the Czech Republic it has been almost nothing –or very little.”

If we look at the big cities in contrast to rural areas where a lot of people or least some people grow their own vegetables and so on – is it more difficult to get people from rural areas to buy organic? Is the interest mainly centered in the big cities?

“The interest is centered in the big cities for many reasons. One reason would be affordability, people have much higher incomes in the big cities and the second reason, as you mentioned, is that people living in rural areas often grow their own vegetables. And finally there is the poor accessibility of organic products in smaller towns and rural areas. Most organic food products are sold either in supermarkets, hypermarkets or specialized organic food shops and they are mostly concentrated in mid-size or larger cities.”

Illustrative photo: archive of Radio PragueIllustrative photo: archive of Radio Prague Finally, how do you see the future of organic foods in this country?

“If you look at the figures, for example from KPMG, the core consumers that regularly buy organic food has not changed for the last five or six years. These people believe in organic food and will not be influenced by any scandals or disinformation in the media and will continue to buy organic food. The decisive group will therefore be the people who buy organic food occasionally. This third of consumers – or 38 percent according to the KPMG poll - will decide the future of organic food sales in the Czech Republic. If the economic situation improvers and incomes grow then the share of occasional buyers will increase. People will again start sampling organic food and if the quality is good enough they will continue buying it. So the future largely depends on the economic situation. Of course, a lot depends on the quality and amount of information consumers get about organic food products and the advantages of organic farming. That is very important.“

27-03-2013