How Do You Sell Organic Food, When It Costs More to Produce?

High prices are a thorn in the organic food industry’s side.  At least for now, the cost of organic farming exceed those of conventional farming.  As such, an organic producer must convince consumers to pay a higher price for his goods, if he hopes to run a profit.

For some products, this is easy: the organic soy milk I buy from Whole Foods costs no more than the conventional milk alternative.  For other products, it’s a bigger challenge: Whole Foods organic strawberries, at $3.18 per pound the last I checked, cost 88% more than their conventional counterparts ($1.69 per pound).  Yipes!

So how do you convince consumers to pony up for organic?

Part of Whole Foods’ strategy appears to be easing the consumers’ pain, psychologically if not financially.  Its organic strawberries sit right next to its conventional strawberries on the shelves but come in a package that’s 6 oz smaller.  The list price: $1.99 per bag, compared to $1.69 for conventional strawberries.  That takes away some of the sting!


Bags of Whole Foods Organic Strawberries and Conventional Strawberrries

Guess Which Bag Costs Less.

But it’s hardly a long-term solution.  $3.18 per pound is $3.18 per pound.  There are better ways, but they will take some time:

(1) Drive down costs.  This may happen naturally as more farmers go organic and strive together to decrease the costs of production, and as the industry takes advantage of economies of scale.

(2) Educate consumers.  As more consumers recognize the benefits of eating organic, more consumers buy organic.  The organic industry has been growing at multiple times the pace of the conventional food industry, and consumers are only starting to learn the differences between organic and conventional.

There is much in the long run that favors organic.  In the mean time, it is sad that we resort to pricing policies that make organic strawberries look cheaper than they are.  But selling more today can only help to increase scale, and spread awareness, offering greater hope for the future.

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3 Responses to How Do You Sell Organic Food, When It Costs More to Produce?

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