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Author: admin, 29.07.2014. Category: Organic Products

Demand for organic produce in the United States has increased steadily since the early 1990s. The phenomenal growth in organic sales in recent years has brought additional farmland into organic agriculture industry. Our analysis used the Nielsen Homescan data from 2001 and 2004 (Box 1) to determine the characteristics of organic consumers, what they buy, how much they spend, and the price premiums they pay for organic produce. Of all demographic characteristics, race seems to be the most correlated with organic expenditures. According to Homescan data, the average per capita spending on organic produce increased by 12% in real terms between 2001 and 2004. The lack of a clear positive association between organic expenditure and income level may have prompted Laurie Demeritt, President of the Hartman Group, to observe that "income is about the only thing that doesn't skew at all by user and nonuser. According to Homescan, tomatoes, potatoes, carrots, onions, lettuce, apples, oranges, bananas, grapes, and strawberries were the top five vegetables and fruits in terms of their shares of fresh produce expenditures for home consumption.
Since organic agricultural production is typically more cost intensive than conventional agriculture, many organic farmers rely on the premiums that organic foods carry to cover their extra costs. Based on limited data on organic prices over the period 2000—04 at the farmgate and wholesale levels, Oberholtzer, Dimitri, and Greene (2005) show that prices for organic varieties are comparatively more volatile than their conventional counterparts and organic price premiums were higher at the wholesale level than at the farmgate level.
In our analysis, we categorized each household into user or nonuser group according to whether or not the household purchased organic produce. With respect to market shares of selected organic produce across user groups, Figure 4 shows that light users spent the largest proportion of their organic expenditures on carrots, bananas, and tomatoes. Comparing demographic information across user groups in 2004 gives us further insights in terms of how organic expenditures are related to these characteristics.
We used the Nielsen Homescan data from 2001 and 2004 to analyze consumer purchase patterns of fresh organic produce. We classified all households into four groups: nonusers, light users, medium users, and heavy users, according to their per capita expenditures on organic fresh produce.
The views expressed in this study are those of the authors, and do not necessarily reflect those of the United States Department of Agriculture. The Nielsen Homescan panel data include purchases of both random-weight and Uniform Product Code (UPC) food items. Average price premiums as % of conventional price for the top 10 most valuable organic produce. Note: User groups are classified based on sample distribution of average per capita spending on organic produce per purchase record.
By buying organic I spent just $0.11 more than if I had purchased the non-organic versions of a total purchase of 1 lb of apples, 1 lb of grapes, 1 loaf of whole grain bread and 1 lb of bananas. Obviously there are some items that are much more expensive when purchased organic, like meat for example – but I find that eating a more colorful diet limits my intake of meat, thus evening out over the course of a month.
While a completely organic diet may not be affordable for all, this snippet goes to show that it is completely reasonable to choose organic a good portion of the time without sacrificing savings. About Latest Posts Amanda HearnFounder of The Eco-Friendly Family, design geek, serial tanktopist, content creator, mother, coffee addict, & lover of fun. Walmart is not considered green or Eco-friendly because their food comes from around the world and they throw stuff out all the time. Apples are all sold by the pound at this store and the grape signs pictured here are not the same variety either – actually the only identical item is the bananas.
That’s right, if your budget is limited, and you want the best for your kid, do you have a privilege of choosing between Walmart apples and your local food coop? The other day, a cashier at Walmart told me how choosing organic foods mattered for both the people and the environment.
This website accepts select banner advertising and features affiliate links which help me generate income. If your personal health, the environment, and a more sustainable future are important to you, look for the USDA organic seal. Organic foods are ALWAYS third-party certified to comply with strict, far-ranging USDA organic regulations. We’re the pioneers of organic meat and take pride in going above and beyond the USDA Organic standards.
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Join Prairie Friends to receive our monthly e-newsletter with recipes, new products, farmer stories and special offers. Walking down the snack aisle of the grocery store, you can scan the shelves stocked with chips and snack crackers and see packaging with bright colors, eye popping graphics and words that appeal to the desire to be healthy. In 2000, for the first time, conventional supermarkets sold more organic food than any other venue (Dimitri & Greene, 2002). These two years give us a sample from before and after the implementation of the National Organic Program's (NOP) labeling standard. In 2001, we found that Asian Americans, compared to other ethnic groups, spent the most food dollars to purchase organic produce on a per capita basis.
We found that in 2004, households in the Western United States purchased more organic produce than those residing in other regions, spending on average about $4.90 per capita. As shown in Figure 2, this increase in spending is observed for all households across various income groups. You get little skews in age, little skews in geography, little skews in education, but there's nothing at all for income, so we don't even look at that any more" (Fromartz, 2006). American households spent more on organic produce between 2001 and 2004 for all produce except oranges and lettuce.
High premiums usually indicate high demand, signaling to producers which markets may be expanded. A survey by Walnut Acres (2002) reported that 68% of consumers cited high prices as the main reason they did not buy organic foods. Of the three produce (broccoli, carrots, and mesclun mix) studied, they found that average annual organic price premiums at wholesale, as a percent of conventional prices, increased for carrots (143% to 148%) and for broccoli (141% to 153%) between 2001 and 2004, while the price premiums decreased for mesclun mix from 9% to 7%. Then user households are classified into one of three user groups based on sample distribution of per capita spending on organic produce. The medium users purchased more tomatoes and carrots relative to other kinds of fresh produce, while heavy users seemed to expend a larger proportion of their organic budgets on tomatoes, apples, and grapes.
As shown in Table 1, heavy and medium users have the largest proportions of those who have at least a bachelor's degree, while a larger portion of nonusers and light users have either a high school diploma or some college. Our analysis shows that Asian and African Americans tend to purchase organic over conventional produce more than Whites and Hispanics.

The proportion of consumers buying organic produce increased between 2001 and 2004, suggesting an increasing organic penetration. In addition, an organic diet generally goes hand in hand with limiting junk food items like chips, sodas and other snack foods that can rack up the grocery bill quickly. Stocking up on sale items and buying produce that is in season or on sale will further compound your savings and ability to buy organic foods that will limit pesticides and GMOs in your family’s diet. These price pictures were taken at my local Kroger, but I do know what you mean about Walmart stores – they are not my favorite place to shop but when considering pesticide exposure my heart lies in the health effects on those who consume them, especially children.
Those words are the same words that somehow fool us into thinking that chips can be good for you.
We focus on fresh produce because produce represents the largest sector, at about 39% of the organic market (OTA, 2006). Though they bought comparable amounts of fresh produce, Asian Americans, on average, spent more on organic produce than White, African, or Hispanic Americans.
This spending amount represents an increase of 19% over 2001, after adjusting for inflation.
It is interesting to note that average per capita spending on organic produce exhibited a U-shape relationship with income for households earning less than $45,000 annually.
A recent survey conducted by the Food Marketing Institute (2004) showed that only 11% of organic shoppers polled bought organics at a natural-food supermarket, while 57% bought at mainstream grocery stores and discount stores. As indicated previously (Box 1), we calculated unit values (spending over quantity purchased) to derive price premiums for selected fresh produce because Homescan panelists do not report prices of organic and conventional produce. There are substantial variations among individual fresh produce, most notably in carrots and lettuce, which registered the largest increases in price premiums between 2001 and 2004. It should be noted that the organic premiums calculated from the Homescan data are not directly comparable with those reported in Oberholtzer, Dimitri, and Greene (2005).
Overall, organic tomatoes appear to be the favorite fresh produce among the organic users, accounting for more than 15% of light and medium users' organic produce expenditure and more than 10% for heavy users. Interestingly, households whose heads have less than a high school education account for 1.9% of heavy users, the highest among all user groups. Households residing in the western region spent more on organic produce on a per capita basis than those residing in other regions. In terms of demographic characteristics, medium and heavy users are represented proportionately more by older households with the age of household head 50 years and older.
Hartman organic research review: A compilation of national organic research conducted by the Hartman Group. Articles may be reproduced or electronically distributed as long as attribution to Choices and the American Agricultural Economics Association is maintained. While I would prefer to support other stores, I would buy there if that was my only option. The point of this post is that eating organic can be just as cost efficient as buying foods that contain pesticides. With increasing production and supply of organic produce and meats, organic food, once considered a niche product, has become more available and affordable for consumers in mainstream grocery stores.
One may speculate that the growing popularity of organic consumption could be attributed at least partially to the implementation of NOP. By 2004, Asian Americans' expenditures on organics fell, while White, African, and Hispanic Americans increased their spending on organic produce (Figure 1).
Households residing in the northeastern and southern regions also registered an increase in average per capita spending on organic produce.
The fact that mainstream grocery stores are replacing the specialty food stores as the major outlets for organic foods could explain the seemingly fading relationship between organic expenditure and household income.
Tomatoes appear to be the most favored organic vegetable among American consumers with average per capita spending amounts 3-4 times those of other organic produce in both 2001 and 2004. Thus, the organic premiums derived from unit values are not strictly the same as would be observed from the unit prices, if available. Tomatoes and apples also showed an increase in average price premiums by 52% and 75%, respectively. They are willing to pay a price premium because they value and demand certain attributes from organic products.
However, one would expect relatively lower organic price premiums at the retail level than at the wholesale or farmgate level as organic foods are becoming more competitive and increasingly marketed through mainstream supermarkets and discount club stores. It is interesting to note that organic vegetables appear to be the preferred organic produce of light users, while the heavy users seem to have an affinity for organic fruits, especially apples and grapes. With respect to age, heavy users seem to comprise the largest proportion of the youngest households (household head age < 30 years), while the light users' group has the largest proportion of household head age between 30 and 49 years old.
Contrary to popular opinion, we do not find any consistent positive association between household income and expenditures on organic produce. Heavy users also comprise the largest proportion of the youngest households (household head age < 30 years), while light users have the largest proportion of household head age between 30 and 49 years old. For 2001 and 2004, more than 8,164 and 8,430 households, respectively, participated in the Homescan panel.
I plan to work on a more in-depth post on saving when buying organics – this just sort of struck me as I was zipping through the store – but thank you so much for weighing in! So when you peruse the food aisles, think twice before believing everything you’re reading. This increase coincides with the implementation of national organic standards by the USDA in October of 2002, which provided uniform labeling for consumer recognition. It is estimated that 46% of total organic food sales are now handled by the mass-market channel, which includes supermarkets, grocery stores, mass merchandisers, and club stores (OTA, 2006). However, it is not our intention to contribute to the debate on the effect of NOP, mainly because Homescan data are not suitable for examining such an issue. Further, African Americans have replaced Asian Americans to become the ethnic group that spent the most on organic produce.
The Central United States showed the lowest average per capita expenditure in 2004, which remained virtually unchanged from 2001.
These patterns between household income and organic spending are observed for both 2001 and 2004. It appears that income may no longer be a good predicator to profile organic consumers as the industry continues to grow and evolve into maturity. Per capita spending on organic apples and lettuce held distant second and third places in 2001, while carrots and apples were ranked second and third, respectively, in 2004. Except for oranges and onions, average organic premiums for the most valuable produce increased from 2001 to 2004 (Figure 3).

Heavy users buy proportionately more of each fruit than either the light or medium users, except for bananas. Medium and heavy users also have the largest proportion of older households relative to nonusers and light users, with the age of household head 50 years and older. Although certified organic acreage has increased rapidly in boosting the production of organic foods, our analysis suggests that demand appears to be growing faster than the supply so that organic price premiums for most selected fresh produce remained relatively high in 2004, varying from 9% for oranges to 78% for potatoes. In addition, we find that light users expend a relatively larger share of their organic expenditures on bananas and carrots than both the medium and heavy users.
In general, panelists report their purchases weekly by scanning either the UPC or a designated code for random-weight (unpackaged) products of all their purchases from grocery stores or other retail outlets.
Demand trends are expected to continue as more conventional retailers take up a larger portion of the organic market.
A popular perception tends to suggest that most organic consumers are white, wealthy, and have young children.
We simply present a cursory look at the data to examine whether any notable changes have occurred after NOP by comparing household purchases of fresh produce in 2001 and 2004. The proportion of African Americans who purchased organic produce also increased from 34% in 2001 to 37% in 2004, while the proportion of organic users among other groups have remained relatively the same. In terms of proportion of households that purchased fresh organic produce, the western region also showed the largest increase (almost 4%) of organic users from 2001 to 2004.
It is somewhat surprising to find that households with the lowest income level of less than $25,000 spent the most—more than $4 per capita on organic produce in 2001 and 2004. Strawberries and bananas registered the largest increases in organic expenditures by 45% and 33%, respectively. The fact that we find the organic premiums for most selected fresh produce increased from 2001 to 2004 suggests that the demand for organic produce remains strong, and consumers are willing to pay additional dollars for the organic attribute. Overall, the result shows that proportionally more consumers have become organic users in 2004 than in 2001, with a slightly higher increase in both medium and heavy user groups. On the other hand, they tend to buy less of each vegetable than either the light or medium users, except for potatoes. Most heavy users are found in the Southern and Western United States, and the fewest are found in the central region.
Among all fresh produce studied, organic potatoes appear to command the highest percentage of price premiums in both 2001 and 2004. Organic vegetables appear to be the preferred organic produce of light users, while the heavy users seem to prefer organic fruits, especially apples and grapes.
For packaged or UPC-coded food products, organic produce can be identified by the presence of the USDA organic seal or with organic-claim codes created by Nielsen. What about the rubbery, fruit shaped, rainbow colored fruit snacks that are “natural”?
However, the consumer base of organic food appears to have become more diverse and cannot be easily pigeonholed as the market is growing with increased availability and popularity. These findings are in general agreement with the report that Asian, Hispanic, and African Americans are the ethnic groups more likely to purchase organic foods than Whites (Hartman Group, 2002). The West and South appear to be the two fastest growing markets for organic produce in the United States. Medium users have the largest proportion of Whites relative to other user groups, while a relatively large proportion of Hispanic consumers belong to the light users' group.
For all organic users, organic tomatoes are clearly the preferred choice over other vegetables. For random-weight items, the descriptions of designated codes can be used to identify organic produce. A study by the Hartman Group (2002) found that half of the respondents who purchased organic food frequently have an annual income below $50,000, and that African Americans, Asian Americans, and Hispanics purchase more organic products than Caucasians.
According to a more recent study by the Hartman Group (2006), Asians and Hispanics are motivated primarily by family concerns in buying organic products. For households with annual income at $25,000 or above, there appear little variations on average per capita spending on organic produce in 2001 and 2004. According to our calculations, organic potatoes carried a substantially higher price premium than other organic produce in both 2001 and 2004. For the light and heavy users, the growth in real per capita organic spending increased by 10% from 2001 to 2004. In comparison, heavy users are proportionally few among Whites, with the reverse being true for African, Asian, and other Americans. Homescan panelists do not report prices they pay for each food; they report total quantity and spending for each food. Overall, there is little consistent association between per capita expenditures on organic produce and household income. This finding can be useful to organic producers who are looking for new crops to improve their profit margins. In addition, the Homescan data include product characteristics and promotion information, as well as detailed socio-demographic information of each household.
Studies suggest that lower income families choose to buy organic when possible as a means of preventative medicine, and thus are at least as likely to purchase organic as other income groups (Hartman Group, 2003; OTA, 2004).
The changes in organic premiums between 2001 and 2004 were relatively moderate among the most valuable produce, except for lettuce and carrots. For our analysis, household spending on selected fresh produce was calculated as average expenditures on per purchase record basis. Prices for organic and conventional produce were derived as unit values based on the household's reported expenditures and quantities. Average household expenditures on fresh produce were expressed in terms of per capita to control for household size effect. Furthermore, all expenditures and prices were expressed on nominal current dollars for 2001 and 2004, respectively. The Consumer Price Index for food and beverages increased by 7.49% from 2001 to 2004, and this inflation rate is used to calculate changes in real terms.

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