Demand for Organic Food Goes Down

If one is to believe the latest report from the market research firm NPD Group:

, the number of people who reported buying organic products fell 4 percent in August, compared with a year earlier. While more than one in five surveyed in the latest figures available from NPD purchased organic products, the August data represented the first customer losses for the sector since February 2006 — a decline that is expected to accelerate in the months ahead.

One of the biggest knocks against organic foods was the price in relation to the other cheaper products found in the produce bins. While the economy was good, this was less of an issue. But now that people have to watch even the littlest of price discrepancies, it is likely that organic sales are going to go down.

What I’m going to be looking for is some sort of sales plateau that organic foods will reach, which will likely indicate just how many people will stay with organics come good times or bad. When and if that plateau ever comes, it will be just as important to see which companies are still around, and whether or not they have links to larger corporate agri-businesses (I refuse to call those companies “farms”).

As a side note, one of the biggest proponents of organics foods, Whole Foods, saw their stock drop substantially over the last year.

Last month, Whole Foods announced a sharp decline in its quarterly profit, along with anemic same-store sales growth. The company’s stock has fallen more than 70 percent in the past year.

I fear that many of the gains that food has made philosophically over the past three decades are going to take a big hit or two over the next few months.