Organic: The Power of the Label

Features - Feature

Organic food sales are growing at a rate significantly higher than that of conventional foods—almost three times higher.

August 18, 2014
Lisa Lupo

Organic food sales are growing at a rate significantly higher than that of conventional foods—almost three times higher. Why? As a general trend, consumers who buy organic foods do so because it is healthier, tastes better, has lower calories, has no GMOs, is better for the environment, and is more humane ...

Or so they think.

Of the six attributes above, which are fact? Which are required for a product to carry the USDA Organic label? Which have been proven to be fact by scientific studies?

Do you know?


The “health halo effect” of a product that is labeled as organic causes consumers to overrate the positive aspects of a food based on what they perceive the label to mean. According to USDA, which governs the use of the National Organic Program (NOP) label, it simply means that the food has been produced through approved methods “that integrate cultural, biological, and mechanical practices that foster cycling of resources, promote ecological balance, and conserve biodiversity.” However, to consumers, this label, along with other wording such as “natural” and “local,” has come to mean a great deal more. (See Consumer Perception of “Organic,” below, on the right.)

This is illustrated by a study conducted by Cornell University Food and Brand researchers. For the study, 115 people, recruited from a New York shopping mall, were asked to compare pairs of food products (yogurt, cookies, potato chips) of which one of each was labeled as “organic” or “regular.”

Consumer Perception of “Organic”

Research has shown:

  • 17% of consumers surveyed thought the words local and organic are interchangeable. (University of Florida - IFAS)
  • 22% believe that local means non-GMO. (IFAS)
  • A European study found that consumers perceive organically produced food to be safer and contain more nutrients, including vitamins and minerals, than conventionally produced food. (European Food Information Council-EUFIC)
  • Nearly 60% of people look for the term natural when they shop for food, probably because they think these products are better for them than products without that claim. (Consumer Reports)
  • About 65% believe natural means a processed food has no artificial ingredients, pesticides, or GMOs. And more than 80% believe it should mean those things. (Consumer Reports)
  • To date, there is no evidence suggesting that there are significant nutritional differences between organic and conventionally produced food. (EUFIC)

The results: Although, in reality, each set of products was the same, participants estimated the organically labeled yogurt and cookie to have significantly fewer calories than their “regular” counterparts; the “organic” cookie and chips were believed to be more nutritious; and the “organic” chips and yogurt were said to be more appetizing and flavorful. On the other hand, the “regular” cookie was thought to taste better than the identical “organic” cookie. Additionally participants were willing to pay almost 25% more for the organic-labeled product.

The foods were exactly the same, the “organic” label greatly influenced participants’ perceptions as generally having more positive attributes. In actuality, none of the benefits attributed to organic by these participants is proven as fact, and (to answer the questions posed in the introduction of this article), only one of the six attributes has any relevance to organic labeling: the USDA NOP prohibits the use of genetic engineering, or genetically modified organisms (GMOs), in organic products.

In fact, according to the Illinois Farm Bureau, “The biggest difference in [organic and non-organic] food products is price; the same product often sells for triple the conventional price just by adding an ‘organic’ sticker.” Further, it states, “When it comes to issues such as safety, nutrition, and the environment, organic crops are no better than non-organic crops. In fact, organic food products are not as safe as many consumers perceive them to be (typically having higher bacterial counts due to use of organic fertilizers such as animal manure).”

As far back as 2008, an article was printed in The Ontario Agrologist, a publication of the Ontario Institute of Agrologists, which stated, “Personal health is the primary reason why people eat organics. As faith in the safety and nutritive value of conventional food withers, sales of organic products thrive. This is a curious thing, given that most food scientists maintain that organics hold no health advantage whatsoever.” Yet, almost a decade later, this perception continues to thrive.

Why are these misperceptions so prevalent and why are consumers willing to pay more for organic foods? According to a report by the Academics Review, an association of academic professors, researchers, teachers, and credentialed authors, “Fear sells and marketers know it.”

This assertion, published in the association’s April, 2014, Organic Marketing Report, is based on reviews of published research into consumer attitudes about organic products over the last 25 years and analysis of documented organic and natural product industry practices. The association’s review of more than 100 consumer and market research reports published from 1990 to 2013 found that food safety and health were the leading factors in a consumer’s decision to purchase organic. Additionally, it reports that the organic market itself has furthered the health and safety perceptions of consumers, stating, “these perceived attributes are driven by clear and frequent claims supported by organic marketers repeated with such frequency they have become firmly held beliefs by a majority of consumers.”

Because the perception of organic carries with it such positive beliefs, the organic label has become a powerful marketing tool, a point acknowledged even by USDA. As shown in the Cornell study previously discussed, the organic label can influence consumers’ purchasing decisions through their perception that the label means the food is better tasting, lower in calories, and higher in overall value than the same conventionally produced product.

Organic Food Sales

  • Organic sales are 4% of U.S. food sales. (USDA)
  • 2012 sales were $28.4 billion, 2014 sales are expected to reach $35 billion
  • Fresh fruits and vegetables are the top category purchased, accounting for 43% of all organic sales.
  • The global market for organic foods has reached $63 billion. In the U.S. alone, the extended “natural” products marketplace exceeds $290 billion. (Academics Review)

The perceptions and misunderstandings of organic have carried over to the also-growing areas of “natural” and “local” foods, neither of which has a federally regulated definition or requirements for labeling, beyond the general statement by FDA that it “has not developed a definition for use of the term natural or its derivatives. However, the Agency has not objected to the use of the term if the food does not contain added color, artificial flavors, or synthetic substances.” Additionally, studies have found that consumers often believe that buying local means they are buying natural which means they are buying organic and/or GMO free.

Organic, natural, and local foods all have a place in the food supply chain, and each provides benefits sought by some consumers, however it is critical the consumers have facts to back up these buying decision, rather than purchasing these foods based on a health halo effect. As stated by the Illinois Farm Bureau, “Consumers should certainly be able to purchase and consume which type they prefer, organic, conventional, GMO, or non GMO.... What remains important is providing accurate and fact-based information about the various forms of production.”

 


The author is Editor of QA magazine. She can be reached at llupo@gie.net.


Organic Reports