Determining the Role of Communication and Distribution Channels for Organic Foods

Determining the Role of Communication and Distribution Channels for Organic Foods

V. Aslihan Nasir (Bogazici University, Turkey) and Suphan Nasir (Istanbul University, Turkey)
Copyright: © 2017 |Pages: 16
DOI: 10.4018/978-1-5225-2107-5.ch009
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Abstract

While, the market for organic foods is growing; the proportion of consumers who buy organic foods is still considered low. The role of communication activities is very important for promoting the organic food consumption. In order to create awareness and generate demand for organic foods, companies need to use effective communication tools. Companies in the agribusiness sector try to take advantage of the information and communication technologies in the digital era with the purpose of communicating the value of their offer to consumers. Companies need to know which information sources (channels) are most influential in purchase decision while communicating with consumers. Thus, the aim of this study is to examine consumers' credibility perceptions of communication channels that are used to promote organic food. The great majority of the respondentsin this study mentioned that they had never seen organic food ads. However, a significant number of consumers who had seen organic food ads declared Internet as the medium they had exposed to organic food ads. Nevertheless, our study revealed that the respondents did not perceive Internet as a credible source of information about organic foods. Yet, online social networks were perceived as more reliable source of information about organic foods when compared to majority of traditional media such as radio and newspaper ads. The distribution channels that consumers prefer to purchase organic foods was also investigated; and it is found that a significant portion of the consumers choose supermarkets and neighborhood bazaars for their organic food shopping whereas Internet/online shops and pharmacy stores were shown as the least preferred shopping alternatives. Finally, a substantial majority of the consumers mentioned high prices and availability as the main barriers against buying organic foods.
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Introduction

The “organic foods movement” began as a reaction to conventional agricultural methods, whichare heavily dependent on chemical pesticides, fertilizers, antibiotics, and growth hormones that are assumed to be harmful for human health. Organic agriculture is practiced in 172 countries, and 43.7 million hectares of agricultural land are managed organically by approximately 2.3 million farmers (FiBL-IFOAM survey, 2016).Organic food market continues to grow.American consumers’ demand for organic was grown by double-digits nearly every year since the 1990s; and most impressively, organic sales was increased from $3.6 billion in 1997 to $43.3 billion in 2015 (OTA, 2016). According to the Organic Trade Association’s (OTA) 2015 Organic Industry Survey,organic food sector in the United Stateswas grown at an average of 11% from 2014 to 2015 (OTA, 2015). Moreover, U.S. Families’ Organic Attitudes & Beliefs 2015 Tracking Study indicated that 51% of families were buying more organic products than a year ago. There is a growing consumer interest for organic products; however consumers desire for transparency in the supply chain and to know where food comes from. Thus, the industry is coming together in collaborative ways to build a secure supply chain that can support demand. Although the demand for organic foods is driven by personal health and environmental reasons, organic food sales represented almost 5% of total U.S. food sales (OTA, 2015).In Denmark the share of organic food represented the 7.6% of total food market. The leader Denmark is followed by Switzerland (7.1%), Austria (6.5%), U.S (5%), and Germany (4.4%)(FIBL-IFOAM Survey, 2016).

Based on the 17th edition of The World of Organic Agriculture, published by the Research Institute of Organic Agriculture (FIBL) and IFOAM, the global market for organic food in 2014 have reached 80 billion US Dollars (more than 60 billion Euros). The United States was the leading market with 27.1 billion Euros, followed by Germany (7.9 billion Euros), France (4.8 billion Euros), and China (3.7 billion Euros).

Organic packaged food and beverage sales generated in the United States in 2014 through the mass merchandise retail channel amounted to about 15.9 billion U.S. dollars. On the other hand, in that year, organic packaged food and beverage sales generated through natural health farm retail channel and internet retailing channel was 14.8 and 1.2 billion U.S. dollars, respectively (Statista, 2016a).

In the light of the above statistical information, it is clear that organic food sector has great potential for further expansion. Therefore, companies in agribusiness need to persuade consumers to buy organic food through using various communication channels. While designing their communication strategies, companies also need to learn why consumers do not buy organic food. Companies in the agribusiness sector try to take advantage of the information and communication technologies in the digital era with the purpose of communicating the value of their offer to consumers. While communicating the value of the offer, companies spend a lot of money for marketing communication budget. However it is important to note that, sources of information and credibility of information source influence the purchase decision of consumers. Thus, companies need to know that which information sources (channels) are most influential in purchase decision while communicating with consumers. Another aim of this study is to examine consumers’ credibility perceptions of communication channels that are used to promote organic food.This chapter tries to find out:

  • Whether consumers have ever seen an organic food advertisement.

  • In which communication channel(s) did consumers see the organic food advertisement.

  • The credibility of the communication channels for receiving information about organic food.

  • The role of online and conventional communication channels.

  • From which distribution channel (online vs offline) do consumers prefer to buy organic food.

  • Why consumers don’t buy organic food.

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