Making the Organic Choice
Organic Agriculture Centre of Canada
Organics is a rapidly growing sector in agriculture, now estimated to be worth $2 billion in Canada and expanding at a rate of 15-20% per year. This growth is driven by consumers actively seeking out organic products, but what drives this urge? It has been five years since the 2005 review paper “Comparison of consumer perceptions and preference toward organic versus conventionally produced foods: A review and update of the literature” by Emmanuel Yiridoe, Samuel Bonti-Ankomah and Ralph Martin appeared in the journal Renewable Agriculture and Food Systems. Valuable lessons from this study can still be applied today.
Demand for organic products stems from a number of attributes associated with organic production practices. But there are many other factors that underlie the decision to place an organic product in the grocery cart – knowledge about organic principles, trust in organic production methods, recognition of organic labels and willingness to pay organic price premiums.
In general, it can be said that consumers value organic products for many of their inherent properties. Yet, these properties are masked – or cannot be visually distinguished. Imagine that I have placed two apples in front of you – one is a conventionally grown apple, the other certified organic. If all labels were removed, could you tell which apple was organic? Probably not. Yet, were I to tell you which apple was organic, you would automatically assign it certain fundamental properties – grown without pesticides or synthetic fertilizers, not genetically modified, more environmentally sustainable, maybe even safer, healthier and tastier.
In order to link these intrinsic organic qualities to a product on the shelf, organic foods must be clearly labeled in a recognizable and trusted fashion. The authors of the study argue that mislabeling and the abundance of different organic logos can lead to mistrust, confusion, and ultimately the purchase of fewer organic products. The implementation of the new Canadian Organic Product Regulations and the associated Canada Organic Logo may help to alleviate some of this confusion by providing a readily identifiable organic logo backed up by regulated standards.
Once an organic product can be distinguished from its conventional counterparts, what factors propel customers? A review of the previous literature reveals that one of the strongest drivers for purchase of organic products is the perception that organic foods are more nutritious and healthier. An investment in organic products may thus be seen as an investment in one’s health – parallel to buying a gym membership or prescription medicine. This perception even encourages some consumers to accept the price differential between organic and conventional products.
Yet the results of numerous studies which compare the nutritional benefits of organic and conventional products tend to be mixed. Yiridoe explains that “Studies comparing conventionally-produced products versus their organic alternatives tend to be complicated by various factors, such as the design of the research, products considered, etc. What this suggests is that evidence from specific studies may not necessarily apply universally to all other related products.”
In other words, a definitive answer to the “Is organic healthier?” question may be elusive, and such claims should be approached with caution. Instead, consumer education campaigns in support of organic agriculture could also focus on the environmental and social benefits that can be more clearly defined and supported. Yiridoe makes the important point that “Consumer education is an ongoing process, so there is always the opportunity to improve and/or expand on the education process.”
Another stumbling block that may be encountered is the higher price tag often found on organic goods. This price differential, which economists refer to as an organic price premium, is partly due to higher labour inputs, sometimes lower yields, the cost of certification, and the ecosystem services promoted through organic farming practices. Consumers must, therefore, be willing to pay more money when filling their grocery baskets with organic products. While most people are willing to pay 10-20% more for organic products, consumers may generally be willing to pay a higher premium for products with a shorter shelf life, and not surprisingly, consumers’ willingness to pay a premium decreases as the premium increases.
So where do we go from here? The organic industry continues to expand, and as Dr. Yiridoe points out, “Canadian consumers are increasingly interested in ’green‘ products, and food products that can improve human health”. There is an opportunity for Canadian farmers to provide the organic products that are sought by consumers. Local farmers and processors can gain from the growing Canadian organics market by earning the trust of consumers with credible claims signaled through clear product labels.
This article was written by Joanna MacKenzie on behalf of the OACC with funding provided by Canada’s Organic Science Cluster (a part of the Canadian Agri-Science Clusters Initiative of Agriculture and Agri-Food Canada's Growing Forward Policy Framework). The Organic Science Cluster is a collaborative effort led jointly by the OACC, the Organic Federation of Canada and industry partners. For more information: email@example.com or 902-893-7256.
Posted January 2011