The organic food market has grown in a multi-billion dollar segment over the last few years. Market analysts predict faster growth for organic products in the upcoming years but the higher price of organic products is a major bottleneck in the products going mainstream. Majority of customers are still buying non-organic food products as there is limited variety in organic market and price is generally 50 percent higher than normal food products.
However, the industry is still dominated by small or medium scale enterprises. As majority of production comes from small farmers and majority of marketing of organic foods is controlled by small and medium size companies, the economies of scale still don’t apply to organic products segment.
As per Organic World Congress data, the organic movement and business in the segment has grown by four times in the last three years. The Organic World Congress was held in New Delhi (India) for year 2017 and many companies participated at the event.
While interacting with many customers and visitors at Organic World Congress, our team found that people are interested in trying organic products but they don’t feel like paying almost the double in terms of price for organic products. When non-organic products are prominently displayed in markets, majority of customers find them as a better option financially. The marketing community in Organic Foods segment should understand that reducing their margins will improve volumes.
By pricing organic products in value-for-money range, businesses operating in organic segment can improve customer acceptance for organic products. This will be good for organic farming industry as more people would join the revolutionary movement against excessive use of harmful chemical and fertilizers.
Organic products have been gaining prominence and grabbing shelf space from conventional products over the last few years.
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