One of the main goals of organic food products is to protect the environment. The main features are to not use pesticides, chemical fertilizers or synthetic substances that harm the environment. According to Brazilian legislation, in order for food to be considered organic, the production process must include responsible use of soil, water, air and other natural resources while respecting social and cultural relations.
However, despite all the apparent benefits, many consumers in Brazil still do not see benefits to purchasing organic food and drink products. According to Mintel’s 2015 Fruit Juice and Juice Drinks report, only 9% of consumers would choose organic as an influencing factor when purchasing ready-to-drink (RTD) juice, rising to 11% among those aged 55+. When it comes to spirits, only 6% of drinkers think that organic varieties are worth the premium price compared to standard spirits. When looking at organic foods, consumer attitudes are about the same. Only 8% of consumers would choose organic as an influencing factor when purchasing packaged bread and 5% when purchasing processed meat, according, respectively, to the Bread and Baked Goods and Processed Meat reports.
One possible reason for low interest is the high price point for organic food. In general, Mintel research says that Brazilian consumers are highly influenced by price when buying food and drink products, putting organic products last on their shopping list. According to Mintel’s 2014 Food and Drink Retailing report, low prices are by far the top priority for Brazilian consumers, with 78% of them picking it as a key reason for selecting one food and drink retailer over others. This is the case among all socio economic groups, age groups and regions.
On the bright side, companies in Brazil are investing more in new product innovation within the organic food and drink categories. According to Mintel’s Global New Product Database (GNPD), 3.5% of all launches in 2014 claimed to be organic, representing an increase of 95% since 2011, when 1.8% of the launches claimed to be organic.
For organic food and drink companies, clear messaging about the benefits of organic products for consumers and for the environment is key to justifying the high cost and will be key to increasing growth in the future. Brands could organize activities such as seminars, workshops, courses, and organic product tasting events to educate consumers about the universe of organic production. Packaging that highlights the main characteristics of organic produce and the availability of staff in-store to answer consumers’ questions, as well as promote the products are also alternatives that could be explored.
According to the Ministry of Agriculture, Livestock and Supply (MAPA), the area of organic products in Brazil is about 750,000 hectares, with more than 10,000 producers and approximately 13,000 production units. Brazil, with its vast fields, different soil types and climate, as well as an incredible biodiversity, is undoubtedly one of the countries with the greatest potential for growth in organic production.
Andre joined Mintel in April 2014 as a Research Analyst to work on the Emerging Markets team. He is responsible for the development of reports and analysis of the Brazilian market. He previously worked for IBOPE, one of the leading research institutes in Latin America, focusing on media research.
