Organic supermarkets

Organic supermarkets offer an alternative to specialist organic shops by presenting organic food in an atmosphere with which most people are familiar. It remains to be seen, however, whether and to what extent the organic supermarkets will be able to expand the market as a whole. It has been suggested that only those who are specifically looking for... 

Organic supermarkets have a greater chance of economies of scale than smaller retail outlets and, by offering a wide variety in one shop at lower prices to the consumer than smaller specialist outlets, they are able to compete with the supermarkets on convenience. 

Natural Retail Group Organic Supermarkets (NRG) www.naturalretail.com... 

Retail type Organic shops Produce Direct marketing Supermarket, organic Supermarket, not-organic... 

However, the American consumer now seems ready to accept some reduction in cosmetic standards, provided pesticide use is diminished (47). Their concern about pesticide use is confirmed by the growing popularity of organic food stores and supermarkets that guarantee pesticide-free produce (48). Also, the "Big Green" initiative in California, although it didn t pass, signals that consumers are alarmed about pesticide use and are willing to take political action to make their views known. 

Organic food is primarily sold through conventional retail stores (mainly supermarkets) and is thus supplied where most of the consumers do their shopping. 

Sales through supermarkets require large and continuing supplies, which in turn tend to reduce average price premiums for organic food. 

Meili (2002) confirms this from Switzerland. Organic beef sells very well in the biggest supermarket. The consumer pays 10% to 15% more for the meat and the farmer receives 40% more for the organic animal than for the conventional. The favoured cross for quality organic beef is the Limousin crossed with a dairy breed. This cross can be slaughtered at 550 kg liveweight to make a 300 kg carcass. 

Recently, organic farms have been encouraged to make added value products such as cheese and yoghurt. The farmer processes the milk and can fix a price for the farmhouse-produced cheese or yoghurt. It needs to be a unique quality product, or have a superior image, if it is going to sell well at a higher price than a similar product in the local supermarket. 

Two major trends in the industrialised world are the demand for convenience food and awareness of the need for healthy eating patterns. The trend is away from generic foods towards processed products, for example, as we have seen, there is a growing demand for organic frozen desserts and items such as frozen pizzas. Many supermarkets see a potential for surplus products in freezing and canning surplus produce (FAO, 2002). The popularity of functional or healthy foods is also a potentially lucrative area for organic produce, especially dairy products. 

The Organic Valley dairy co-op, based in Wisconsin (USA), has 633 farmers in 16 states and one Canadian province. They have 20475 cows and 95000 acres. They claim that their success stems from paying farmers a fair, sustainable and stable price. They sell via natural food stores and supermarkets. They have also been active in getting schools to offer organic milk (The New Farm, 2003). 

There is considerable debate within the organic sector as to the rightness of selling to supermarkets. Most organic farmers would like their products to be sold in their local towns and not transported backwards and forwards across the country. They are also apprehensive about the power and ruthlessness of the supermarket buyers, who are not seen as being user-friendly. That said, the major multiples... 

Producers deciding to target the large food retailers should consider the high volume, the quantity of meat and the marketing services that will need to be provided, such as prepackaging and delivery. In the UK the supermarket chains have formed partnerships with many organic farmers. 

The supermarket needs to offer organic meat at the same level every day of the year. Hunt (1989) mentioned that, as a supermarket buyer, he had been approached by several suppliers offering one tomorrow, one in two months time and two for Christmas . Safeway required ten cattle per week. To fit into Safeway s distribution system, these cattle would need to be processed through one abattoir, which should be Safeway and Soil Association approved. He believed it to be unlikely that one farmer could supply this number every week of the year. However, the example of Chisel Farm (see Chapter 10) has demonstrated otherwise. Hunt suggested that producer groups be set up in conjunction with a central slaughter point. This, however, would create the additional problem that the producers and the abattoir would have to be located so as to ensure that the transport of livestock... 

Supermarkets have a carcass specification for weight conformation and fat content, which ensures that the meat bought is commercially viable and provides the end product that the consumer requires. The supermarkets are able to insist on their own quality regulations for produce, because they are so dominant in the market place. Until such time as organic farmers can co-operate and become equally powerful, they will have to abide by the supermarket standards. At present, they seem to be under pressure to produce regularly shaped and sized, blemish-free products, on a mass scale, available all-year-round and often transported long distances. Despite these pressures, however, British organic farmers are not contract farmers to the extent that many conventional farmers are. 

Additional costs because retail packs of organic meat would be produced away from the supermarket, using environmentally friendly packaging. 

Supermarket chiefs (Love, 1989 Hunt, 1989) sound enthusiastic about increasing the volume of organic produce stocked and sold by the supermarkets, particularly as they feel that organic meat enhances... 

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