http://thepacker.com/Organic-citrus-on-track-despite-obstacles/Article.aspx?articleid=942597&authorid=242&categoryid=122&feedid=216&src=special

Organic citrus on track despite obstacles
Published on 11/20/2009 10:22am By Tom Burfield

The organic citrus category may have hit a speed bump recently, but Scott Mabs, director of marketing for Homegrown Organic Farms, Porterville, Calif., isn’t sure the sagging economy deserves all the blame.

Sure, some consumers may be cutting corners and switching back to conventional produce, but Mabs believes the bigger challenge to the category is increased competition as more growers and suppliers climb aboard.

“We haven’t seen a major drop in business,” Mabs said, but as competition increases, “we’re having to get better at what we do.”

That means offering top-quality product and putting together effective programs to help sell it.

The volume of organic produce has increased dramatically over the years as growers in the U.S., Mexico, South America and other countries have delved into the category, said John Stair, salesman for Pacific Organic Produce/Purity.Organic, San Francisco.

Quality has improved, too, as growers gain experience growing organically, he said.

He attributed some of that gain in volume and quality to large, conventionally based companies adding organics to their product lines.

Steve Taft, president of Eco-Farms Corp., Temecula, Calif., said he believes the economy has hurt the organic category.

Even though citrus volume was down last year, it was a harder sell, probably because of the sour economy, he said.

“The organic category may have gotten hurt a little more by the economy than the commercial side,” he said.

In general, the organic market is “a function of the ebb and flow of organic supplies,” he said, but pricing also has a significant influence.

Premium gap narrowing

There still is a premium for organic produce, but that premium is not as great as it was in the past, Taft said.

The challenge for shippers and retailers is to work together to figure out ways to make organic produce affordable for consumers, Stair said.

“There are long-term benefits to that,” he said.

Homegrown Organic Farms hasn’t conducted its own surveys, but Mabs agreed with those who say that, during the economic downturn, consumers who are committed to organics will continue to make organics a priority, while newcomers or those not so dedicated might cut back or switch to conventional produce.

And just as some consumers will remain loyal to organics during economic hard times while others stray from the category, some retailers will continue to support the category while others are cutting back on their organic offerings, Stair said.

Not only does the category continue to prosper, Mabs said, but more organic items are turning up outside the produce department in the grocery aisles of the supermarket.

“I don’t see it going backwards,” he said. “I haven’t seen countless retailers just step away from organics and not handle it anymore.”

Instead, the industry is seeking new strategies for selling and merchandising organics, he said.

“If a retailer has implemented an organic program, the last thing he wants to do is give up supplying the consumer,” Mabs said.