Marketing And Strategy - Organic Food

One of the most significant forces in changing consumer needs that current marketers face are the ever increasing environmental issues that people are becoming aware of. Consumers are interested in how goods are produced,especially in the food market where there is the increasing issue of labour exploitation and genetic modification. This has gained a lot of momentum in recent years with the growth of the Organic sector and 'Fair Trade' products.

In 2004, the retail market for organic products in the UK was worth an estimated Ј1.213 billion, and 11% increase on 2003, (Soil Association's Organic Market Report, 2005). This notion is backed up by Mintel, "In most of the consumer research we carry out around a quarter of consumers are concerned about green matters, seek out fair trade products or healthy ranges of foods. That is a substantial proportion of the customer base of any food retailer and so cannot be ignored" (UK retail briefing-Household goods focus, 2006).

Genetically Modified & Organic Food

A genetically modified (GM) food is a food product that has been developed by having specific genes inserted into it to gain a desirable quality. The first GM food to hit the shelves were GM tomatoes which appeared in 1996 in British supermarkets, however, it was not until 1999 that the public scare hit. In a recent survey, one third of people said they would never buy any food that had been genetically modified. This figure is up by four percent in three years, quite a significant amount (attitudes toward ethical foods UK- Mintel, 2006). This provides an opportunity for marketers operating in the food sector, for example a business could promote itself as environmentally aware by claiming they sell only non-GM produce. This would give them the advantage of reassuring worried consumers whilst providing them with the upper hand against firms who do sell GM foods. Another benefit is that there are a large proportion of middle and upper class consumers who are generally aware about the issues related to genetic modification and organic food. This perhaps opens opportunities to price products at the more expensive end of the market, as they are likely to pay more if the food meets their expectations.

Organic food products are becoming increasingly popular due to the ever-increasing awareness of health issues, media campaigns from the large supermarket chains and endorsements from celebrity chefs. To meet these changes in consumer needs, all of the leading supermarket chains have introduced organic ranges in their stores. There is also the fear in the UK for the future of the 'fast food games console' children, (P. Tailor, http://www.learnmarketing.net/environment.htm) which provides a direct market opportunity for healthier food products.

If a firm specialises only in selling organic produce they would be able to advantage of these opportunities. A recent example of this is innocent drinks, selling the innocent brand of 'smoothies'. They began with a simple investment of Ј500, selling freshly made smoothies at a music festival and now command a 30% slice of a market with a retail value of about Ј50m, (Market Researchers AC Nielsen, 2003). A problem is that these organisations need to aim their products at the right market. Traditionally it has been consumers in the middle and upper classes who have been buying organic food, however there is "an encouraging widening of the appeal...with over half those in lower income groups now saying they buy some organic products" (Soil Association Press Release, 2005). This implies that there could be an opportunity at trying to offer cheaper organic produce marketed towards the lower end of the income scale. Even if the price is similar to other organic goods, it could be advertised to show the direct benefits of the food to help consumers justify spending more money for organic produce.

'Fair Trade' Products

Fair trade is a relatively new, organized social movement that promotes equal standards for international labour, environmentalism and social policy in the areas related to the production of 'Fair Trade' goods. This is another rapidly growing section of the food market that is providing a good opportunity for marketers, reporting a massive increase of around 20% a year (FINE, 2005) and now standing at a market value of Ђ660 million. The movement has also benefited from increasing media interest, which means that any unethical behaviour or employee exploitation could lead to a massive amount of bad publicity. It is clear that to promote a good brand image in today's food market, an organisation should look to be aware to fair trade issues.

The possible opportunity here lies in the current range of fair trade products that are on the market. At the moment the main products in fair trade ranges are goods such as fruit, nut products, chocolate and coffee; this means there could be a demand for products in other categories, like meat products or even fair trade drinks. This wider range of fair trade products could give a business a unique selling point, as well as providing them with a strong ethical stance. Perhaps there would even be a chance to use the pressure groups or charities that are involved with fair trade to the organisation's advantage. Marketers could combine the selling of fair trade goods with holding events to raise awareness of unfair trade issues. If they could gain the backing of charities such as Oxfam or trade networks like the European Fair Trade Association, there would be loots of opportunities to raise their brand awareness, thus increasing sales.

Local Produce

Environmentally aware consumers are increasingly favouring local produce. Over 100 years ago nearly all the food we ate come from within 20 miles of our homes but now we would struggle to find a handful of locally produced goods in our supermarkets (Inside Out - East, January 2003). This may not seem as an obvious environmental issue but the problem lies within the transport that must take place to move food products around the UK and the world. A massive 25% of trucks on the UK roads are carrying food products; this means that almost as much greenhouse gas is caused by moving food than by all power stations in the UK (Inside Out - East, January 2003). Importing products from overseas also causes pollution issues, a large proportion of lamb sold in the UK comes from New Zealand and the same is true for potatoes from Israel.

Perhaps there is an opportunity for UK organisations to source their food products locally. A business doing this would be able to promote their policies in pollution reduction whilst also promoting an investment in local farmers. This should help massively

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