Markets

One in five consumers mistakenly thinks ‘local’ means ‘organic’: study

14-Jul-2014
Last updated on 15-Jul-2014 at 17:27 GMT - By Maggie Hennessy
US retail sales of organic reached $35.1 bn in 2013, and recent estimates indicate that sales of products labeled locally grown topped $4.8 bn in 2008—but do consumers know what they're buying? (Photo from Fresh Connect)
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The terms “local” and “organic” have become increasingly coveted characteristics for packaged foods and beverage in the North American market, as evidenced by a growing number of marketing campaigns touting local and organic foods—not to mention the impressive sales figures for each category. 

But do consumers really know what they’re buying when they reach for these products, particularly given the multitude of terms associated with organic and local production practices?

While many consumers correctly identify the main characteristics of local and organic, a subset has an inaccurate perception of these terms, particularly when it comes to the production practices surrounding “local” food, according to a survey of 2,511 consumers conducted in 2011 and published this month in the International Food and Agribusiness Management Review.

The researchers found that consumers have both accurate (such as local means lower miles to transport) and inaccurate (such as local is organic, organic is local, local means no pesticide use, and organic implies lower miles to transport) perceptions of local and organic.

Nearly 25% incorrectly say local means pesticide free, 17% think organic means locally grown

For example, 67% of the total sample (with 68% of respondents from the US and 32% from Canada) correctly perceived decreased miles to transport as a characteristic of local. However, 23% of the total sample incorrectly believed that products labeled “local” were produced without pesticides, and 17% thought an organic label meant a fruit or vegetable was grown locally. (The percentage was even higher for US consumers, with 25% saying they believe of local food is grown organically, compared to 20% of Canadian consumers.)

“The importance of these results to agribusiness firms is considerable. Take for example the organic industry that has spent years (and millions of dollars) building brand awareness and now sees as much as 17% of the consumer base mistakenly associating local with organic,” wrote the study’s authors. “Assuming only a small share of consumers now purchase local believing it is organic; there is considerable potential for harm to organic growers in the form of potentially reduced sales.”

Elsewhere, the researchers found that a higher percentage of consumers believe higher prices are associated with organic than for local food (54% of total respondents versus 21%). And two out of three consumers said that organic food is produced without the use of pesticides. (While indeed certain synthetic pesticides are banned from use in organic production, numerous pesticides are permitted through the National Organic Program. See here.) 

Source: International Food and Agribusiness Management Review
DOI: http://purl.umn.edu/16790
“U.S. and Canadian Consumer Perception of Local and Organic Terminology”
Authors: Benjamin L. Campbell, Hayk Khachatryan, Bridget K. Behec, Jennifer Dennis, and Charles Hall

Related topics: Organics, R&D, Markets