Survey Says: Ohio Consumers Willing to Pay for Organics

February 2, 2005

COLUMBUS, Ohio — Ohio consumers are willing to pay a premium for organic foods, but such factors as health, food safety, level of organic ingredients and where buyers shop impact just how much, according to a series of Ohio State University Extension surveys.

Ohio State agricultural economists Marvin Batte, Neal Hooker and Tim Haab, all with the Department of Agricultural, Environmental, and Development Economics, conducted surveys in 2003 and 2004 in response to the growing demand for organic foods and to learn how consumers are responding to the U.S. Department of Agriculture's new National Organic Program. The program sets a national standard of organic products and provides for four levels of organic labeling.

"We were interested in finding out why consumers buy organic and we are trying to understand how the National Organic Program impacts consumer decision-making and their willingness to pay for organic products," said Batte.

The researchers conducted two customer intercept surveys throughout central Ohio, one at traditional national chain grocery stores and one at national natural/whole food stores. They found that concerns over consumer health and food safety were the top determinants for both store types in why consumers buy organic products. But it was the specialty shoppers, those consumers most committed to organic foods, or those more aware of the National Organic Program, who were willing to pay a premium for organic foods — anywhere from 37 cents to 52 cents more for such attributes as non-genetically modified, locally grown, pesticide-free and 100 percent organic ingredients.

Researchers also analyzed demographics in the surveys and found that consumer willingness to pay for organics increased with consumer age, household income and the number of children in the household. Female consumers also were willing to pay more for organic foods.

Batte did point out that the biggest reason consumers do not buy organic foods is because the prices of the products are too high. Lack of variety, inferior taste and poor appearance were also reasons consumers gave for not purchasing organic foods.

Batte hopes that the survey results will be useful in determining just how organic foods are marketed in the future. "The U.S. organic retail market has been growing 20 percent per year for the past several years. In 2003, U.S. retail sales were at $13 billion," said Batte. "With organic regulations now standardized, more consumers may be switching to organic products. It's been suggested that by 2009, retail sales will be at $19 billion."

Results of this study mirror findings from the 2004 Ohio Survey, in which nearly 2,000 Ohioans participated. That survey, led by Ohio Agricultural Research and Development Center researcher Jeff Sharp of the Department of Human and Community Resource Development, found that 40 percent said they frequently or occasionally buy organic foods. In addition, 32 percent said they would pay 10 percent more for organic foods; 6 percent said they would pay 25 percent more; and 1 percent said they would pay 50 percent more.

Author(s): 
Candace Pollock
Source(s): 
Marvin Batte