Next Generation of Organic Pioneers
A few months ago I attended the Organic Food Summit, an annual food industry conference put on by New Hope Natural Media attended mostly be organic food executives, entrepreneurs and media. This year’s conference was held in held at the St. Julien Inn and Spa in Boulder, CO. I participated on a panel entitled “Passing the Fork: Conversations with Organic Groundbreakers”. Other panelists were Patrice Gros from the Foundation Farm & Farming School in the Arkansas Ozarks and Fred Kirschenmann from the Leopold Institute at Iowa State University. The panel was focused on emerging and future trends that may impact the future organic food industry.
While Patrice and Fred focused on trends in sustainable agriculture and within existing consumer segments of organic food. I took a very different angle by talking about two main points: 1) inner-city and low-income consumers have not historically been able to participate in or benefit from the successes of the organic foods and it’s time for the industry to bridge the social equity divide and 2) growing trends within inner city communities and communities of color will position these communities as emerging consumer markets for organic foods and that these trends will enable food companies to bridge the social equity divide in profitable ways.
I presented four key trends that are changing the game for inner city markets:
A) Demographic change and population growth will form a new national majority of immigrants and people of color consumers that will have significant impact on consumer demands and on spending power for organic foods. Drawing on the work of demographer Manuel Pastor, I demonstrated how minorities, immigrants and people of color will become the majority in California and across the nation over the next 20 years and how this change will result in new ethnic food demands and business opportunities that companies must prepare for.
B) The Brookings Institution studied how underinvestment in America’s inner cities stems largely from information gaps in which the vast assets and wealth of these communities are largely unseen by conventional businesses. To address this problem groups such as the Initiative for Competitive Inner Cities, which produced a report entitled Realizing the Inner City Retail Opportunity are beginning to quantify the spending power and market demand of inner city communities to make the case that these markets present significant unmet business opportunity. A market research firm called Promar International produced a report entitled The Upside of the Downscale: Marketing to low-income US food consumers in the decade ahead which discusses the extraordinary food demands and business opportunities for food companies in inner city communities.
C) Revitalization and redevelopment trends in inner city neighborhoods are gradually increasing densities, income averages and spending power and, consequently, are creating new and positive market conditions and market opportunities for food retail. For example, in West Oakland the average household income increased by 22% between 2000 and 2005 and population growth has averaged 4.5% annually (8.05% for Hispanics) for over a decade. Additionally, a market study conducted by Social Compact on West Oakland identified approximately $200M in annual retail expenditures and $59 million in annual “expenditure leakage” (retail expenditures leaving the area each year).
D) Demand for healthy foods in inner city communities are on the rise in response to an increasing public awareness of the connections between chronic disease and diet. The Department of Consumer Science at the University of Wisconsin conducted a study entitled Organic Food Demand: A Focus Group Study Involving Caucasian and African-American Shoppers found that preference for organic foods among African American participants was parallel to the preference for organic foods among Caucasian participants. Anecdotally, People’s Grocery’s six years of experience in marketing healthy foods and providing nutrition education to inner city residents has confirmed that many African American, Latino and Asian consumers are increasing aware of desiring healthy and/or organic foods.
