Marketing Impact of Organic Food Products

Question: Discuss about theMarketing Impact of Organic Food Products. Answer: Introduction The label Organic is given to those food products, which are produced with the use natural fertilizers; they minimize pollution (of air, soil and water) and encourages the conservation of soil and water. The different types of organic food products available include fruits and vegetables, dairy foods, meat products, honey and certain processed food. The main reason for consumers preferring to purchase an organic product is that product is free of external additives, pesticides and other chemicals. Organic food products attain their labels by more sustainable use of natural resources and thereby minimizing the damage that is caused to environment. Literature Review The organic food industry is a major industry in Australia with a growth rate of 15% per annum. The market for organic food items can be attributed to the nutritive value of the products, their taste along with the freshness of the products. The demand for organic foods is not bound by the demographic profile of the consumer. The only reason for low consumption of organic products if their prices (Shafie and Rennie 2012). A survey conducted in Australia found that more people are consuming organic food products. Fruits and vegetables are consumed the most as compared to meat and meat products. The study found that 65% of the consumers had an organic diet and 35% of the people purchased certified organic products (Oates, Cohen and Braun, 2012). This indicates that more number of surveys should be done so that the preference of the consumers towards different organic food products can be derived. The growth in the demand for organic foods can be attributed to increased awareness of the consumers. This increased awareness is also because consumers would like to enjoy healthy foods. This has given rise to diversification of the organic food market with increase in the varieties of organic foods. The increase in the consumption of organic foods is related to demography of the consumers. Younger more health conscious and having above average income consumers are more prone to purchase organic foods (Pearson et.al. 2013). An intra-continent study between Australians and Europeans found that the consumption behaviour of organic foods were similar. The perceived health benefits of both the groups of people were also found to be similar (Oates, Cohen and Braun 2014). The organic food sector is growing fast. The consumers of organic food are miniscule as compared to those who do not consume organic foods. This inhibition towards organic foods can be attributed to the inadequate information on the label (Henryks et.al. 2015).The market of organic food can grow with more information about the benefits of organic foods, both the health aspect of the consumer and the environmental aspect. The growth of the Australian organic food market has been possible due to the entry of independent retailers dealing in organic foods. The fastest growing organic food markets is the dairy industry. Even in the dairy food sector, yoghurt is the fastest growing item. The survey revealed that a majority of the consumers purchased organic foods due to its perceived health benefits (Ausfoodnews.com.au, 2016). According to the Australian organic market report the fastest growing sectors in the organic food markets are diary, beef, organic wine and bevvies, grains, fruits and vegetables and personal care products. The report found that most of the supermarkets store organic foods. The majority of the consumers chose organic foods due to its chemical free nature (Aginnovators.org.au, 2015). Research Aim The aim of the research is to investigate the impact of marketing of organic food products. It also aims to find the gap between the demand and supply of organic food products. Research Question: The research question for this assignment is as follows: How much is the demand and supply of organic food products? What is the trend in the growth of the organic food market? What is the volume of exports of different organic food products? Research Objective The objective of doing the research is as follows: To find the correlation between demand and supply of organic food products To find the growth trend of different organic foods To find the growth trend in the exports of different organic foods. Research Methodology A quantitative study on the organic food market would be done. Secondary data would be collected and secondary data collection techniques would be used. The producers of organic food products would collect data for the last five years on the volume of organic food materials produced and sold. Data on the different organic food products like fruits and vegetables, dairy foods, meat products, honey would be collected. The producers would also collect data on the volume of exports of the organic food products. Data would also be collected from the supermarkets and other markets of organic food products on the volume of sales of different food products. The data would be analysed to understand the volume of organic food market (Zikmund 2009). The analysis of the data would provide information on the growth trend of the produce and consumption of organic food products. An analysis of the data would also provide information on the gap between the demand and supply of organic food products (Levine et.al. 2010). Expected Research Outcome As per the report of Australian organic market (2014), the industrys worth is $1.72Bn and growing at 15% per annum. The exports of organic food products have also grown. Thus, the present study will only strengthen the fact that there is huge market potential for organic food products. It will also provide an insight into the growth potential for the organic market. Conclusion It can be concluded that the market for organic food products has grown drastically. The growth in the consumption of organic food products can be attributed to the fact that consumers have understood the benefits of organic foods. Rising to the occasion, the producers have also been able to keep pace with the demand. Thus, the farming of organic food products has also increased. The government has also initiated standards for the organic food products. In spite of the growth, there is still a huge difference in the sales volume of organic vs. non-organic food items. The data will provide for the scope in the growth of the organic food market. References Aginnovators.org.au. (2015). 6 booming Australian organics sectors $1.7 Billion reasons to get in the market. [online] Available at: https://www.aginnovators.org.au/news/6-booming-aussie-organics-sectors-%E2%80%93-and-why-cleaner-greener-farmers-are-raking-it [Accessed 19 Sep. 2016]. Ausfoodnews.com.au. (2016). Australia's appetite for organic foods at record levels | Australian Food News. [online] Available at: https://www.ausfoodnews.com.au/2014/12/10/australias-appetite-for-organic-foods-at-record-levels.html [Accessed 19 Sep. 2016]. Australian organic market report 2014 Henryks, J., Pearson, D., Anisimova, T. and Sultan, P., 2015. Are organic food labels inadequate? Evidence from consumers in Australia. Business and Management Studies, 1(2), pp.45-54. Levine, D.M., Stephan, D.F., Krehbiel, T.C. d Brenson, M.L. (2010), Statistics for Managers Using Microsoft Excel: 6th Global Edition, Prentice Hall Oates, L., Cohen, M. and Braun, L. (2012). Characteristics and consumption patterns of Australian organic consumers. Journal of the Science of Food and Agriculture, 92(14), pp.2782-2787. Oates, L., Cohen, M. and Braun, L. (2014). The Health and Wellness Effects of Organic Diets. Building Organic Bridges, 1, pp.9-12. Pearson, D., Henryks, J., Sultan, P. and Anisimova, T. (2013). Organic food: Exploring purchase frequency to explain consumer behavior. Journal of Organic Systems, 8(2), pp.50-63. Shafie, F. and Rennie, D. (2012). Consumer Perceptions Towards Organic Food. Procedia - Social and Behavioral Sciences, 49, pp.360-367. Zikmund, W. (2009) Business Research Methods, 8th Edition, Dryden, Orlando.