Product and Market Overview
The U.S. market for natural/organic foods and beverages totaled roughly $28.3 billion in 2005. Since 2003, the organic segment of the market has been growing at more than four times the rate of the natural foods segment, which in turn has been outperforming the 2%-4% annual growth rate of the food and beverage market overall. Since 2002, natural and organic foods and beverages sales increased 39.4%, with the organic segment alone up 60.9%. According to Health Foods International, a market research consulting firm, organic foods is not just a fad but demand has increased steadily over the past 15 years. According to Packaged Facts, a market research source, by 2010, the organic market alone will be worth $33 billion, a projected increase of 86.4% from 2005. According to a SPINS/IRI Natural Products Consumer Solutions 2005 study, 68% of the population has not yet become familiar with organic foods and beverages.
Customer Analysis
Customer Need & Benefits
According to the Whole Foods Market Organic Trend Tracker consumer survey, the top three reasons consumers buy organics are 1) to avoid pesticides, 2) freshness, and 3) health and nutrition. More than half the respondents buy organics to avoid genetically modified foods. Based on the survey, the key benefit customers receive from organic food products is a perceived notion of longevity from consuming untainted food sources. It is the customer's desire for longevity which represents an organic foods retailer's largest opportunity to differentiate itself from a competitor and appeal to a customer through attributes such as selection, store size, and store brand name recognition.& ...