More than other segments, consumers will drive the future of the organic food segment, Ken Meyer, President, Whole Foods Markets Mid-Atlantic Region, told NAFFS Convention attendees.

“In the U.S., the consumer is going to drive the industry going forward,” he said. “In Germany, the government is setting the standards. Our government waited for the industry to develop a standard. Consumers will drive what happens next.”
Most Americans, he said, first try organics via Wal-Mart. It’s beyond food, he added, saying it happens through clothing, too. With regard to food, produce is the entry point for many, Meyer said. He expects the organic production of meat is going to grow quickly. Regional items are an area of growth for organic products, Meyer added. At Whole Foods, when an item works well in a region, it’s then expanded to other regions. That philosophy carries over from and to all products. Whole Foods’ regional structure puts it in position to take advantage of the trend toward locally produced foods. In produce, sales of locally produced foods account for 25 percent of sales.

A challenge for retailers and marketers of organics is demographics, he said. “The core of our customer base is the baby boomer segment. 70 million baby boomers will start to retire in 2007.”

He said the challenge is to continue to introduce new customers to the segment. “We asked ourselves, ‘how do we as a company stay hip?’” He cited Apple Computer as an example of a company that was able to do that. “They started out great, then slumped somewhat. Then they came out with the Ipod. That changed things a great deal. It was a great success.”

Certification
Meyer said product integrity and certification issues are ongoing issues. “There’s continual discussion about how organic should be or should have been defined,” he said. “The hardcore side wants to eliminate anything besides 100 percent. Others want the 38 permissible items included.”
To demonstrate integrity problems, Meyer showed a video of non-organically produced onions being switched into boxes labeled as organic product. The premium consumers are willing to pay for organic, he said, make it tempting for companies to cheat.

Genetically engineered organisms are also an issue, Meyer said. “It’s hard to guarantee there are no GMOs in organic foods,” Meyer said. He said things such as water run-off and wind can introduce GMOs to product not meant to include them.

Media attention, Meyer said, is helping move organics forward. He said Dr. Weil and others are also helping to spread the message about organics.

The science community, he added, is moving forward on organics as well. “Non-government organizations are cooperating more. They’re working together. They used to all work independently.”

In the end, Meyer said, consumers will have the final say. “Customers are moving toward organics. As of now they’re willing to pay a premium. There will be pressure for that premium to shrink.”