I thought about entitling this post “A wilful refusal to respect the consumer”, since that is what appears to lie at the heart of the organic industry’s problems. The UK organic market has shrunk by 20% over the last four recorded years, whilst most international markets have been experiencing growth, despite the economic downturn affecting European and North American markets, as here. The disparity with other markets is put down to factors such as a lack of government and retailer support in the UK.
The arguments given for the UK’s poor organic market performance are, in all honesty, rather lame. For instance, retailers will readily respond to increased consumer demand, developed by effectively targeted and executed campaigns, particularly when that shift in demand is from a cheaper to a premium product. One has only to look at the stunning success of Fairtrade to see the results of a single-minded campaign: in 2001 the organic market was 14 times larger than Fairtrade sales; in 2011 Fairtrade was 4% larger than organic at £1.7bn and has continued to grow during the recession. In addition, unlike organic, Fairtrade does not have the advantage of a direct tangible benefit to the consumer, other than a feeling of having made a difference to others.
There are many examples of highly successful organic brands in the UK, such as Yeo Valley, Green & Black’s, Organix and Rachel’s, which have adopted appropriate marketing strategies to develop their markets and grow their brand franchises. Developing the market for a generic product requires different strategies, tools and techniques, however. Above all, it needs the ability to really listen to what the consumer is saying and to provide what she or he is asking for; for some, exercising this level of humility appears a little difficult.
A willingness to understand the consumer
At a recent Soil Association trade briefing the results of a round of qualitative consumer research were presented. The key findings to this audience member were fascinating, not because they revealed anything particularly new, but reconfirmed all the key insights that OMSCo (Organic Milk Suppliers Cooperative) discovered from its research over ten years previously. A key revelation is that most consumers have very little clue what organic is, and what makes it different. As the presenter said “there is a void of understanding”, yet the consumer positively wants to know more. Another major finding is that price is a red herring – if consumers cannot understand what makes the product different they are unable to complete the value equation. Thirdly, it is clear that health is the primary (but not the only) motivator for purchasing organic.
The solution for the UK organic market is as clear today as it was to OMSCo in 2001: give the consumer the facts to enable them to make an informed decision. So why is this not happening? The simple reason is that the organic industry, with a number of honourable exceptions (such as the brands cited above), is dominated by producer-led thinking. This includes the inability to see things from the point-of-view of consumers (or often even to conduct research to find out those views) and a disregard of one of the basic techniques of strategic marketing – that of segmentation.
Removing the blinkers
Many in the world of organics are so steeped in the benefits of the production system that they seem unable to see that consumers will simply turn away if presented with a confusion of reasons to switch their purchasing habits. Consumers are also unthinkingly all thrown into one undifferentiated mass (the Soil Association talks of targeting “everyone”), rather than understood as the separate market segments that they are. For a good example of a comprehensive – but practically focused – segmentation study, the recently released Regeneration Roadmap research report entitled ‘Re: Thinking Consumption – Consumers & The Future of Sustainability’ is an excellent example. Segmentation does not have to be quite as sophisticated as this, but the right thought process is critical: blind belief in one’s own infallible understanding of the market will simply not cut the mustard. Nor will a mistaken belief that retailers will do the job for you.
This refusal to really understand, and engage with, the consumer was made clear to me by a senior figure in the industry many years ago who said “there’s no need to do market research”. I was also told by this same person that the proposition for organic milk should be “All milk is good – organic milk is even better”. This, frankly, rather vacuous observation betrays a viewpoint not based upon facts, but a rather condescending attitude in its refusal to accept what the consumer is thinking and saying. The task is not to communicate that an entire product category is good (which the consumer largely believes already) and that your product is a bit better in some ill-defined way; it is to give a compelling reason as to why your product is sufficiently superior to command a price premium that is worth paying.
Transparency not fudge
The biggest problem has been the decision by many in the industry to place the fear of upsetting conventional farmers above the need for consumers to be told the truth about what happens on non-organic farms, including some of the worst practices. This lack of transparency, in clarifying the real differences between the farming systems, is often explained away by the observation that some conventional farmers’ practices are nearly as good as (or sometimes better than) those of organic farmers. This may be so, but it is irrelevant. How is the consumer supposed to be able to tell the difference between a product from a non-organic ‘good’ farm and a ‘bad’ one? This rather contemptuous attitude towards the consumer ignores how we all rely on brands (in this case ‘organic’) to give us a short-cut to making informed choices. It would be inconceivable for a normal brand to omit to tell its potential customers how exactly it was a better choice because of the drawbacks of its competitors. Once given the facts – the plain truth, not a vanilla fudge which helps to protect intensive farming – consumers can draw their own conclusions about the implications for their health and that of their families.
Non-organic farmers should, in any case, surely be encouraged to convert. This will be best accomplished by building a healthy and growing organic market, to give confidence to more conventional farmers to switch their production system, particularly those who already farm in more enlightened ways. But having converted, and taken on board the consequential additional costs, producers cannot expect consumers to pay the price, required to produce a sufficient return, without fully explaining the basis for the product’s superiority.
The mantra from the Soil Association appears to be one of just “telling positive stories” to the consumer, which includes explaining what organic systems involve and what they avoid – but not the reality of the alternative, that most people buy most of the time. The Soil Association website provides some good background material on pertinent issues, such as how the use of farm antibiotics is affecting human health but much of the information is not made available in a consumer-friendly form that an audience can readily understand and act upon. Compare this to the way that Fairtrade makes clear the issues surrounding the sourcing of bananas.
This coyness does not, almost certainly, reflect the arguments that those in the industry would use face-to-face to try to persuade an enquirer as to why a switch to organic makes sense. Fairtrade is booming in significant part because consumers have been made aware of what conditions can be like for small-scale farmers and workers in the developing world. The majority of eggs purchased in the UK now are free-range (at a premium of up to 30%), because consumers have been made aware of the conditions that battery hens suffer. The unwillingness to convey a sufficiently explained and compelling message also opens up the organic movement to competition from weaker propositions, such as Bill Oddy’s White & Wild milk or the new ‘free-range’ initiative.
Focusing on the key issue
Another key problem that has dogged the development of the organic market is an unwillingness to communicate a simple, focused, message that will cut through the noise, as all the best brand campaigns do. That message should clearly be related to health, as all the research that has ever been carried out with consumers in the UK on organics show. The qualitative research recently conducted by the SA confirmed it, as does the quantitative research referenced in the 2012 Organic market report, which cites health-related issues as the top three reasons for buying organic by consumers.
So why does so much organic communication continue to deploy a confusion of messages, particularly in advertising? Just about the first thing that advertising practitioners, and the clients who use advertising, are taught is that you should concentrate on one key message in a campaign. One of the reasons for the confusion of messages appears to be the inability of organic practitioners to see that the viewpoint of most consumers is very different from their own. Whereas for many working in organics environmental and animal welfare factors (quite admirably) are seen as the biggest single reasons for switching, for instance, the health of themselves and their families is, as already stated, the biggest motivator for most consumers.
Another reason given for not talking about health-related issues is the regulatory difficulties in making claims and comparisons. There is no question that this can be demanding, but it is not impossible (as the OMSCo campaign showed), and is simply an obstacle to be overcome: using it as a reason to talk about something else as the key message, such as animal welfare, is absurd when health is clearly the key motivator for potential new switchers. It is argued that we cannot claim that “organic is healthier”: this is correct, even though we may all believe that the statement is true, but we don’t have to claim it as such. However, give the consumer the facts about the massive use of pesticides and artificial fertilisers on intensive farms, for instance, and they will draw the obvious conclusions.
A failure of strategy and execution
The Organic Trade Board’s generic campaign for organic – with match-funded EU money, giving a pot of £2m – completely failed at its first attempt (‘Why I Love Organic’). An objective was set in 2008 to double the value of the organic market by 2013, whereas it has actually shrunk by 20% so far, as previously stated.
There initially appeared to be no attempt at appropriate market segmentation or targeting: comment around the time of the launch talked about “focussing on broadening the customer base rather than encouraging already committed shoppers”. This appeared to demonstrate a fundamental misunderstanding of the market, which obeys the classic 80:20 Pareto principle – i.e. 80% of sales are accounted for by only 20% of purchasers (the figures have hovered around this ratio for over 10 years). With household penetration of organic food at around 80%, there is no point in increasing penetration (“broadening the customer base”), or, of course, in focusing on the heavy purchasers at the other end of the market. The key target market is clearly the occasional organic buyers (or sub-segments of this large group), who account for around 80% of all purchasers.
Executionally, the campaign took a disastrous approach for the first year. Breaking the cardinal rule of advertising already alluded to, the advertising used a perplexing range of bland reasons, attributed to convinced organic users. As the 2011 Organic Market Report stated: “Its main messages focus on four key benefits – organic farming is better for nature and for animal welfare, and it delivers great-tasting, more natural food”. The use of the word “focus” creates an oxymoron in conjunction with no less than four key messages, and the single-minded message related to health, needed to attract attention and achieve cut-through, was nowhere to be seen.
Unsurprisingly, a new campaign was launched in May 2012, using the strapline ‘Organic. Naturally different’. The execution is definitely more attention-grabbing and incisive, is more focused on health-related issues and is more prepared to allude to differences with non-organic production. It also is correctly being targeted at occasional organic purchasers. However, a poster campaign can never begin to explain what is being timidly intimated at. In addition, there would still appear to be some belief that it is necessary to be targeted “at everyone”.
PR and online activity are, in any case, far more effective vehicles than advertising for conveying factual stories with some key details to absorb. Unfortunately, even here, the campaign appeared to fail, on at least one occasion. Advertising can work extremely well for building rapid awareness for brands (e.g. Yeo Valley), and then reinforcing and sustaining loyalty; it is a poor vehicle for communicating a variety of messages for a generic category (or categories), however. Advertising is more fun, however, and creates a higher trade profile, whereas PR and online require ongoing and sustained hard work and attention to detail.
One of the Tube cross-track poster executions, in the new campaign, deploys two apples discussing the use of “treatments” by one of them. The sort of killer information that would be more likely to result in a change in consumer behaviour, which is what one would presume everyone in the organic industry wants, is contained in a Soil Association statement quoted in Marketing magazine on 12 August 2009, however. It stated that “consumers should be worried that the average industrially produced apple may have been sprayed up to 16 times with 30 different chemicals”. This is precisely the kind of information that PR and online activity is far better suited to communicating, and also far more hard-hitting. With a much higher communications budget, there could be a useful complementary role for advertising as well, but that really is not the case here.
Learning from success
It is not as though the successful template did not already exist, in OMSCo’s strategy from 2001-2006. The 5-year PR campaign, that flowed from the strategy, single-mindedly concentrated on health-related issues, using facts about organic versus conventional production and the growing scientific evidence of nutritional benefits (e.g. higher omega 3 levels). The key proposition was that it’s worth paying more for organic milk because it’s better for you. Other benefits were not ignored, but they played a minor role in the campaign. The result of this strategy was that annual sales growth for total UK organic milk sales never dipped below 21% over the period and went as high as 44% (liquid milk annual sales increases went up as high as 65% per year). Household penetration of organic milk meanwhile went from 8% to 24%. (For full details on this very successful case study refer to the post “Cows eat grass, so how can milk be organic?”).
A critical lesson from the OMSCo experience was one that confirmed a key conclusion drawn from the research alluded to early on in this piece. The retail price premium for organic milk over ordinary milk at point-of-sale was 50% in 2001, dropping to a minimum of 23%, and rising again to 40% in 2006, at the same time as we were seeing huge increases in consumer uptake. Yet many in the industry routinely bang on now, as then, about the “need to compete on price”. It is another instance of an apparent obliviousness to the fundamentals of strategic marketing, in this case the role of pricing in supporting premium products, examples of which exist in vast abundance. A price premium only becomes an issue when there is a complete failure to communicate effectively the benefits of organic products. The consumer viewpoint is “if it’s that much better, I expect to pay more for it; if it costs the same, or thereabouts, it can’t be as good as you say it is.”
Until the organic movement is prepared to adopt the basic principles of good strategic marketing, such as understanding your consumer, segmenting the market appropriately, careful targeting, establishing the optimum positioning, using the most effective media and telling a consistent single-minded message backed up by the plain facts, the market will continue to stumble. This learning can be applied to the building of all markets for sustainable products, however. Using the most persuasive message, whatever it is, is more likely to result in the achievement of all the sustainability objectives and eventually reach ‘everyone’ in the market. Let go of the producer-led thinking and, using consumer insight and professional marketing expertise as a guide, realise the potential that exists for the bold.