Organic-food sales dropping as economy falters

McClatchy Newspapers (MCT) - Almost everything in Jennifer Lipscomb's shopping cart was once organic, but no more.

Why?

"The cost," said Lipscomb, of Fort Worth, Texas. "I'm saving 25 to 40 percent on each shopping trip. I felt like I was feeding my family better food, but now, I just don't see much difference."

Although supermarkets are benefiting from consumers' decisions to eat at home more than dine out, the costlier organic items may be feeling the pinch of the nation's economic woes. Organics may have grabbed more shelf space than ever before, but with groceries in general up 7 percent over last year, some consumers are thinking twice before putting them in their basket.

"To cope with higher prices, many shoppers are simply opting not to buy pricey organic or premium brands," says Marcia Mogelonsky, a senior analyst at Mintel International Group, a market research firm.

After conducting a consumer survey, Mintel forecasts that sales growth of organics _ up 142 percent in the past five years to $5.2 billion _ will lose steam because so many Americans are struggling financially.

It says sales will drop during the next six years, in part because of the competition between certified organic and more loosely defined "natural" products.

"We anticipate more subtle changes, such as the former all-organic shopper who returns to traditional cookie brands while sticking with organic produce," Mogelonsky said. "These small changes will slow market growth."

Some shoppers will save money by choosing private-label _ and relatively cheaper _ organic items over brand-name products, the survey said.

That's what Whole Foods has found already.

"I don't have specific numbers on branded products, but what I can tell you is that our own brands are growing three to four times that of branded product," spokeswoman Karen Lukin said.

Another shopper, Gladys Childs of Keller, Texas, chaplain at Texas Wesleyan University, said she has limited her organic purchases to baby food and fruit.

Pat Wood, 61, of Arlington, Texas, a retired Southern Methodist University employee, is also among those who has cut back. She now limits organic purchases to fruit and vegetables.

"I didn't see the value," Wood said.

And the scientific evidence is still being debated.

Although too much pesticide and chemical fertilizers can harm the environment, questions remain about the actual health benefits of organic foods.

A University of Copenhagen study in the Journal of the Science of Food this summer suggests that organic carrots, kale, peas, apples and potatoes contain no more nutrients than mainstream counterparts grown with pesticides.

"No systematic differences between cultivation systems representing organic and conventional production methods were found across the five crops, so the study does not support the belief that organically grown foodstuffs generally contain more major and trace elements than conventionally grown foodstuffs," wrote Dr. Susanne Bugel, the study's leader.

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Mintel said the study might lead consumers to believe that organic products represent a "lifestyle choice that may be unnecessary."

But a year ago, research by Britain's University of Newcastle concluded that some organic food is healthier. Its four-year study conducted a cross Europe found 50 to 80 percent more antioxidants in organic milk than in conventional milk, and 20 to 40 percent more nutrients in organically cultivated grains, tomatoes, potatoes, onions and salad greens.

And not everyone has forsaken food that has been certified as grown without inorganic chemicals and free of additives.

Deborah Pendergraft, 57, of Grand Prairie, Texas, said that only recently has she begun buying organic food _ mainly produce and meat. And she would augment her organic purchases, now about 10 percent of her food bill, "if I could afford more."

"It's a little higher (in price), but not as much as I had thought," said Pendergraft, who operates a pool-cleaning service with her husband.

Pendergraft, who buys her organic food at a Kroger in Arlington, said she would be willing to pay as much as a 25 percent premium on organic groceries.

For the time being, there's no slowdown in new organic products. More than 1,564 items were introduced last year. Through September of this year, 1,454 new products were put on the market, prompting Mintel to predict last year's total to be topped by year's end.

Neither Kroger, Central Market nor Whole Foods report seeing a decline in organics' sales growth, although Whole Foods has been promoting cost-saving measures in the face of a challenging economy.

Austin, Texas-based Whole Foods, trying to live down its nickname "W hole Paycheck," has started what it calls the "Whole Deal" promotion to push the chain's more-economical private-label brand, 365 Everyday Value _ which Tom Thumb matches with its O Organics and Kroger its Private Selection Organics.

Whole Foods now conducts store wide value tours and hands out brochures containing money-saving shopping hints as well as in-house coupons.

But Mintel warned that aside from higher costs, organic items might face growing consumer resistance due to popular concern with the carbon footprint of goods shipped across country.

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© 2008, Fort Worth Star-Telegram.