This article examines the effect of “shaky consumer spending” on the organic industry, which is “starting to show signs that a decades-long sales boom may be coming to an end.” New York Times reporter Andrew Martin states that, according to the Nielsen Co., organics sales growth has declined from 20 percent per year in recent years to 4 percent in the latest four-week period ending October 4. “If a slowdown continues,” he writes, “it could have broad implications beyond the organic industry, whose success has spawned a growing number of products with values-based marketing claims, from fair trade coffee to hormone-free beef to humanely raised chickens.”

Industry experts apparently anticipate that as organics begin to lose less committed consumers, products marketed to children will nevertheless “continue to thrive because they appeal to parents’ concerns about health.” In addition, shoppers have become more selective about their purchases, “buying four or five products instead of seven or eight.” “Such consumer attitudes have compounded problems for Whole Foods Market,” notes Martin, who estimates that the company’s stock “has dropped by more than 70 percent since the first of the year.”

Other organic manufacturers and retailers, however, have expressed optimism that sales would recover as consumers prepare more meals inside the home. “People aren’t going on vacation, they aren’t going to buy a car, so maybe they’ll buy a luxury item that is affordable,” a spokesperson for Equal Exchange was quoted as saying. “Right now, we aren’t seeing a slowdown, but it’s a concern.”

About The Author

For decades, manufacturers, distributors and retailers at every link in the food chain have come to Shook, Hardy & Bacon to partner with a legal team that understands the issues they face in today's evolving food production industry. Shook attorneys work with some of the world's largest food, beverage and agribusiness companies to establish preventative measures, conduct internal audits, develop public relations strategies, and advance tort reform initiatives.