Organic Versus Natural: The Balance of Price and Benefits

Harleysville, Pa. (May 2006) – The Natural Marketing Institute (NMI), the leading provider of strategic consulting, consumer insights and market research services for the health, wellness and sustainability marketplace, today expanded on one of the key trends it has identified as having a significant impact in 2006.

While the marketplace is experiencing many new organic introductions from mainstream brands as well as private label brands, finding the balance of price and benefits will be the determining factor in consumer choice between natural and organic products.

According to NMI President Maryellen Molyneaux, “American household penetration of organic products is currently at 56% of households and is projected to grow from $13 billion in 2005 to $20 billion in 2009. There were approximately 500 new organic products introduced into the marketplace over the past year. In order to succeed, marketers will need to understand the trade-offs consumer make in their purchase decisions of natural versus organic.”

As evidenced in data from NMI’s Health & Wellness Trends Database™, consumers are more likely to desire the benefits of organically grown foods and beverages (such as “contains no chemical pesticides”), than they are to make the connection between those benefits and the classification “organically grown.”

The data also indicates that there is a clear need for continued consumer education in the marketplace. Finding the optimal balance of price, benefits, branding and levels of understanding will be the determining factor in consumer choice between natural and organic products —- and will provide the edge over conventional products. “With consumers showing an 88% increase from 2002 to 2005 in their willingness to pay a premium price for organic foods and beverages, converting understanding of the features of organic should translate into increased sales and continued double-digit market growth,” states Molyneaux.



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NMI is a strategic consulting, market research, and business development company specializing in the health, wellness, and sustainable marketplace. For more information on NMI’s trend reports, proprietary databases and other services, visit NMI’s web site at www.NMIsolutions.com.