Research The Market
Make Sure Your Business Plan Reflects Real-World Conditions
Here’s an excerpt from our farm’s business plan to help those of you who are just getting started. Note this data is from 2012 - 2015.
The Natural and Organic Foods Movement
The annual growth in availability of natural and organic foods in the United States and around the world have been dramatic as producers and processors have responded to consumer demand for “healthy” and “wholesome” foods. Since 1990, organic food sales have increased by nearly 20% each year (Winter and Davis, 2006). Meat, poultry and seafood has been the fastest growing category of organic foods, increasing by 55.4% in 2005 alone. (Mitchell, 2006; Organic Trade Association, 2006). While the organic and natural foods market is still a relatively small part of the total food industry, comprising a 2.5% share in 2005, it is widely expected to increase 5 to 10 percent in the near future (Nutrition Business Journal, 2006). Several studies have documented that consumer preferences for organic and natural foods are based on concerns about antibiotics, pesticides, hormones, genetic modifications and chemical additives that consumers associate with conventionally produced foods. (Brown and Prescott, 2002; Dreezens et al, 2005; Sederer et al, 2006; Winter and Davis, 2006; Devich et al, 2007) Consumers have expressed their preferences with a strong willingness to pay significant premiums for organic and natural foods. Premiums of 10 to 40% for organic foods over conventional products are common (Winter and Davis, 2006), but for meat and poultry premiums may reach 200% (Bacus, 2006) or even more. In one such example, the average retail price for four brands of organic broilers in the Midwest during April and May 2006 was $3.19 per pound compared to $1.29 for a conventionally raised bird; a 247% premium (Husak, 2007). Prices for organic processed meats have been reported to range from $7.98 per pound to $12.99 per pound (Anon, 2005).
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