Organic Growth

Just a few years ago, many Americans had probably never heard the term “organic.” But now the rapidly increasing popularity of organic foods is making the idea of chemical-free, environmentally friendly farm products a household word. Of course, it isn't only milk and produce that comes from the farm: organic personal care products are growing fast and, like organic foods, appealing to a much wider audience than just their “dark green” roots.

So who's buying organic? Retailer Carmen McManus, Bloom Organics, Sarasota, FL, defines her core organic customer this way: “Primarily a woman making a decision for the family, aged 25 to 70. Usually a little more upwardly mobile. … We get a lot of women who are pregnant and are interested in making changes — it seems to be a wakeup call. Usually if a client is eating organic, they're going to want to learn about organic [bath and body] products. It's a natural next step.”

Tammie Umbel, CEO of Shea Terra Organics, Fairfax, VA, adds “educated” to the list of core customer traits. However, she sees another stream of customers “who may have had some health issues, [and are interested in organic] regardless of their educational background.” While the core organic customer is affluent, it's not for lack of interest among other demographics. “Across the board, people would be buying organic if they could afford it,” says Umbel.

Several companies cited trends in wellness and environmental awareness as combining to increase the appeal of organic product. Market research company Packaged Facts, New York, has found that different studies offer inconsistent pictures of “green” shoppers' income, age and education levels. “What seems clear from the profusion of conflicting data,” the company concluded, “Is that there's no one ethical consumer: Ethical products appeal to many different demographic groups, and the potential for a 'green' market is very broad.”

Scott Cecil, president of Save YOUR World LLC, told Gifts & Decorative Accessories, “The category is rapidly growing to include the mainstream consumer. Obviously the stereotype organic market started with high end/West Coast consumers, but with all the media focus on the environment, it's become top-of-mind with all consumers. Environment, health and the use of chemicals versus organic sources are all interrelated.”

Lisa Levin, CEO of Pharmacopia, agrees. “There's an interest in organic because of the media blitz. A lot of factors are converging: Al Gore's movie, An Inconvenient Truth, brought an awareness of the global, green, sustainable movement. People are more aware of what's healthy and what's not so healthy, and that they can make a difference in what they do.”

Yet unlike food products, organic personal care remains largely unregulated. As a result, there are manufacturers who are using the organic label for products that still have synthetic chemicals in them.

“There's a lot of people out there who are 'greenwashing,'” says McManus, using a term that means making a product or company look more environmentally friendly than it really is. “It's not uncommon to see 'organic' on a product that contains parabens.”

Says Cecil, “We're very aware of the lack of standard guidelines, so we've set our own standards. For instance, I visited the areas where we source our organic yerba maté to ensure that it's being harvested in a renewable, sustainable manner, and that fair trade practices are being followed.”

Lily Morgan, CEO of Lily Organics, is not just a vendor but a certified organic grower. “We make our products every week on our own farm,” she says. This practice adds a second eco-benefit, because the ingredients don't have to travel. “We leave the smallest carbon imprint of any company around here.”

Meanwhile, Pharmacopia is actively seeking a law to comply with. “We are about to certify ourselves to the European standard, because there's no standard in the U.S.” says Levin. “We figured some standard is better than no standard, so people know that what we're doing is real.”

Pharmacopia is not the only company turning to Europe for help. Dave Karlak, president of Max Green Alchemy, San Francisco, uses European processing for skin creams. “We get quite a bit of our ingredients from Europe,” he says. “They seem to be a little bit more ahead of the curve on natural and green products.”

But there's a price for going green. Organic products are more expensive because of higher costs for ingredients and production. Karlak points specifically to organic sunflower seed oil, the cost of which has tripled in the past two years because of increased demand. Levin cites Roman Chamomile tea — $200 a pound, versus $800 a pound when produced organically.

“Overall, yes, [organic products] cost more,” notes Morgan. “Since we're growers, we get the whole picture. It takes a lot to get certified by the Department of Agriculture, and the farming itself involves a tremendous amount of manual labor.”

But if the products are more expensive, they can also command a higher markup — meaning more profit in retailers' pockets. “You're looking at a more educated crowd of consumers,” says Umbel. “They also happen to have more money, and are willing to pay a lot more.”

Surprisingly, however, retailers we spoke to don't agree that organic products are pricier. “It is a common misconception that organics are more expensive,” says McManus. “If you compare what we have to a conventional store, it costs about the same. And often organic products are more concentrated, so they go farther.”

Unfortunately, in the absence of a strong legal standard, it falls to storeowners to assess the claims of products and educate their customers. It takes a bit of work, according to Morgan, for retailers to assure that they're getting the real organic deal. But failure to do homework can backfire. “If the consumer finds out, they might be upset that a product isn't really [organic],” Morgan explains.

McManus concurs. “It's really important that retailers educate themselves and communicate to clients. Approximately 60 to 80 percent of what we put on our skin is absorbed into the bloodstream. We tell customers that parabens are toxic, salates are highly toxic.”

Further complicating the issue are vendors that take a “partially organic” approach to making product. “A lot of transitional products in the mass market tend to add things that aren't very natural, like different types of silicones,” notes Karlak. “But at the same time they're using lots of natural ingredients such as botanicals and essential oils. We don't dabble in that sort of in-between land.”

Meanwhile, Levin gives pointers on how to read for organic. “If the only organic ingredients are at the bottom of the list, it means there isn't that much in there.”

Umbel suggests that essential oils are a crucial ingredient to look at, as well as water, which is often overlooked. “One question to ask is what is the source of the water that goes into the product — is it treated chemically?”

But all the homework pays off, according to Kanger. A big factor in the success of organic product is the person selling it. Customers don't read signage as much as retailers would like them to. However, if a retailer can fully explain that something is organic or paraben free, or even vegan, it can convince them to buy a product they otherwise wouldn't.

And as Umbel points out, many other organic companies neither have nor want mass distribution. “It's an opportunity for boutiques and small businesses, because this is a product that will keep customers coming back.”

According to Levin, the ultimate value of careful appraisal of organic product is that it creates a store brand that is synonymous with customers' values. “It's like Whole Foods,” she says. “Shoppers feel like they don't have to check — because if it is there, it must be good.”