Organic producers need to understand customers, not cut costs

Organic farmers should work on developing consumer loyalty rather than concentrating on cutting costs, a survey into shoppers’ perceptions of organic fruit and vegetables has found.

Few organic fruit and vegetable producers understood people’s reasons for buying organic produce and thought price was the biggest barrier to them buying it.

The survey, by Kent Business School’s Dunnhumby Academy of Consumer Research, included data from Tesco’s clubcard scheme, which follows the shopping habits of 12m UK households.

The research found that although producers and retailers thought price affected people’s purchasing decisions, only 16% of shoppers were driven by cost when buying organic fruit and vegetables.

Instead, health, safety and taste were the key factors leading people to buy organic produce.

Andrew Fearne, director of the Centre for Supply Chain Research, said organic producers should spend more time and money developing better-tasting produce, rather than focusing on cutting production costs.

“You don’t understand your customers well enough,” he told members of the fruit and vegetable industry at the Re:Fresh conference in London last week (8 May).

“People don’t want cheap things any more. Buying habits change and we need to recognise them. It’s all about health and taste.

“Just asking consumers to pay more because it costs more to produce isn’t the answer. You need to help them understand why they should pay more.”

In the year to 22 January 2008, the UK volume of organic fruit and vegetable sales increased by 18%, representing 6% of all fruit and vegetable sales, said Prof Fearne.

But of those people who bought organic fruit and vegetables during the year, only 62% repeatedly bought organic vegetables and just 56% continued to buy organic fruit, instead going back to conventionally grown produce.

“Organic prices have actually been falling, so we need to look at why the repeat rate is so low,” said Prof Fearne.

“It’s down to unfulfilled promises – people expect organic produce to taste better.

“You have to do a better job in developing products. Making things cheaper won’t help you sell more if you can’t deliver on promises.”