Organic Food Marketing Trends: Edible Packaging May Be the Next Big Thing

Imagine if you bought a cup of yogurt, ate its contents, and then ate the cup. That’s the new frontier of innovation in the trend toward healthier alternatives that are good for the environment. An organic food company in California is investigating this product. Another example is edible films. Researchers at the University of Arkansas Division of Agriculture have invented and patented several protein-based films that can serve as carriers for certain organic acids that inhibit the growth of the three main foodborne bacteria: Listeria moncytogense, Salmonella, and E. coli. Additionally, the film can be a vehicle for antioxidants, nutraceuticals, flavors, colors, and other functional ingredients. Advance applications include fruits and vegetables, meats, seafood, frozen snacks and pizza, cereals, nuts and more. The category may be at the forefront of innovative trends today.

However, there are many challenges. Organic food prices tend to be higher in the supermarket channel. The problem has more to do with supply and demand. According to a study by Arcus, on the one hand, organic has grown by 20% in the last decade. And yet it’s still a small business, only $1.8 billion a year in Canada or about 3.5% of the food industry. Small changes in supply and demand can shake up the entire industry. For example, a company with a 7% stake to grow at 10% will need to increase its supply chain by a staggering 50%. The supply chain simply does not exist today.

The #1 disincentive for people to buy organic today is price. The explosion of private label organic products is a good thing. Private labels have entered the space in a big way. Retail chains like Safeway and Whole Foods have focused on organic as a competitive differentiator. The category now reaches consumers who shop by price. Second, private label is making organic more widely acceptable, penetrating a deeper layer of society. Third, it will create supply. Farmers and suppliers will realize that it is not just a fad and that it is here to stay.

Why do people turn to organic food? There are three main drivers of organic. First, it’s better food. Canadians often do not pay the true cost of food. As a percentage of income, Canadians pay much less than many other Western countries. So the barrier to entry is relatively lower. Second, having children makes families take a close look at the food they buy. Third, having a health event can dramatically change a consumer’s perception and choice of food. Cancer rates have increased due to poor eating habits. The aging of the population could potentially drive the growth of the organic market.

The obsession with organic markets is the supply chain. Demand is less of a problem than supply, due to annual growth of 20%. With the move from corn to ethanol, organic traders need to solve long-term problems, not just grains and affordable food from farmers. In addition, it is important to decrease the content of fossil fuels in the supply chain. So, edible yogurt cups, anyone? Organic companies are expected to be great innovators.