An important goal of the EU Green Deal is to increase the percentage of agricultural land that is farmed organically. Both the Farm to Fork and Biodiversity strategies aim for organically farmed land to make up at least 25% of all European agriculture by 2030.
To make this happen, demand of organic foods needs to increase. Dutch consumers are slowly embracing the trend: revenue of organic products in supermarkets has increased by 70% between 2013 and 2019 (Statista, 2020). However, organic food still only accounts for 3,2% of food sales in Dutch supermarkets. (Trouw, 2020)
Now that organic foods are widely available in Dutch supermarkets, it’s important to understand what is keeping consumers from shopping organically produced foods. In a study we conducted in our Conscious Consumer Community*, we found that misperceptions about price differences form a barrier for many consumers.
2/3 open to organic, but price is a barrier
8% of Dutch consumers in our study say they buy organic whenever possible. These are the hardcore organic buyers. Growth for organic products will come from the large segment of 59% that says they would choose organic if price allowed them to.
There is a strong correlation between level of education and demand for organic products. Consumers with a higher education are more likely to purchase organic products than those with a lower education. This association is likely mediated by income and therefore is related to the affordability barrier, but not necessarily. In our 2019 Future of Food study among Dutch consumers, we found a stronger correlation between education and organic food consumption than between income and organic food consumption. In other words, households with a lower income but with a higher education are also more likely to buy organic.
Knowledge: what is organic?
Around half of the Dutch consumers in our study say they only have a vague idea or none at all about what the difference between organic products and regular products is. This is quite a large proportion of all participants given that organic products have been around for quite some time.
But is this lack of knowledge about the specifics of organic agriculture really a barrier? We do see that consumers who tend to buy organic report higher levels of knowledge about organic products. Of the organic buyers, 58% say they have good idea about what the difference between organic and regular food is. This means that of those who buy organic foods, 42% knows little or nothing about the differences between organic and regular products.
We expected that consumers who do not buy organic foods** would have low levels of knowledge about it. This is not the case, as only 15% report no knowledge about organics. And when asked to explain why they don’t buy organic foods, only two commented that they do not know enough about the differences.
We conclude that in depth knowledge about organically produced food is not a necessary precondition for shopping organic, but having knowledge about the benefits might help to persuade those who doubt between regular and organic.
Measuring price perception of organic foods
One of the hypotheses we wanted to test in this study is whether consumers know the actual price difference between organic products and regular. A recent experiment with changing and communicating the prices of organic milk vs regular milk showed very positive results.
We chose 3 different products to compare the price difference between the regular and organic: milk (small price difference), sauerkraut (medium price difference) and pork (large price difference).
The actual differences in price were calculated in a collaborative study by the Central Bureau for Statistics and Wageningen University and Research. We told the participants what the average price of the non-organic food is and asked them to give an estimation of the price of the equivalent organic product.
Milk: price organic mostly overestimated
One in 3 consumers guessed the price of organic milk right, but most consumers (60%) overestimated the price of organic milk. 29% overestimated the price difference by more than 20%. This is the reason why the nudging experiment conducted in Dutch supermarkets was so successful. Communicating to consumers that the price difference is much lower than they expected took away the price barrier (which in the case of milk is more a reflection of perception than reality).
With sauerkraut, a product bought relatively infrequently, the estimations vary. 26% got the price right, almost the same percentage underestimated the price of organic sauerkraut, while another 40% overestimated the price. This means that for sauerkraut, it is unclear what will happen if consumers are confronted with the actual price difference. For some it will be a windfall, for others a disappointment.
Pork: large underestimation
For pork the price difference between regular and organic is huge in reality (72%). This leads to a substantial underestimation of the difference. Only 3% got it right and most underestimated the difference by 30% or more. For this product category communication should focus on the value of organic pig farming (e.g. animal well-being) versus regular pig farming to justify the price difference.
The majority of Dutch consumers say that they buy organic foods, at least when the price allows it. But only half of the Dutch consumers have a good idea about the difference between organic and non-organic food.
Consumers often mentioned high price of organic food as a reason to not buy organic. However the tendency to overestimate the price of organic food shows that consumers’ price perception consumers is not always accurate.
Organic foods have retained the image of being consistently (much) more expensive than non-organic foods. This may be the case for some foods (pork), but for others the price difference is smaller than assumed by many (milk, sauerkraut).
For those categories where the price difference is small, it pays off to communicate about the actual price difference. For those categories where the price difference is large, it is necessary to educate consumers about the benefits and value of organic farming for that specific product category.
If you want to know more about this study, please contact our Research Director Durk Bosma.
* Representative sample of Dutch consumers, n= 141