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FlexPackReport 29Sep2009

September 29, 2009
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Organic growth now coasting
Quality emerges as recession-proof
Packaged snack industry poised for growth
SOURCES FOR CURRENT RESIN PRICES


Organic growth now coasting

Casual organic users continue to back off organics in favor of other healthy alternatives, but dyed-in-the-wool organic shoppers remain committed to organic purchases.

According to a new report from The Hartman Group, the number of consumers who use organic products at least occasionally slid from 73% in 2006 to 69% in 2008. The report also indicates that “core” organic consumers represented 58% of regular users in 2008 while “mid-level” (or regular) users represented 37%, reversing a trend established in 2006 when 60% were mid-level consumers and 37% were core consumers.

“The core are becoming even more engaged in purchasing organics and are moving into non-food categories as well,” says the report. “But because of economic constraints, as well as their reluctance to buy significant quantities of organic packaged products, the mid-level [numbers] are leveling off the number of organic product categories purchased.”

The report, titled “Current State of the Organic Consumer,” shows that 71% of organic consumers believe store brand organics are equal to (60%) or better than (11%) their national brand counterparts. Surveys in the report also indicated a shift in where organic purchases are made. That is, consumers are making more of their organic purchases at supercenters/discount stores and club stores. Between 2005 and 2008, the number of shoppers making organic purchases at a grocery store during the previous 30 days jumped from 58% to 72%. In contrast, the number of purchases made in natural food stores fell from 49% to 29% during the same period.

Quality emerges as recession-proof

Even when the recession’s in the history books, quality, value and nutrition may reign in grocery aisles.

A recent study by IBM reveals that in spite of tough economic times, Americans at all income levels refuse to sacrifice quality, value and nutrition when it comes to their food and health and beauty purchases. However, the study also found that the economy has led shoppers to take a closer look at the brands they typically purchase, the stores they frequent and even their preferred packaging to find new ways to save money-habits that may linger even as the recession dissipates.

The survey, encompassing consumers earning anywhere between $20,000 and $100,000+ annually, found that 72% of consumers are more concerned with quality than price while shopping, while nine out of 10 surveyed say that value and nutrition will be of equal or greater importance when the recession ends.

Other parts of the IBM survey show that consumers shop around for deals, remain flexible on brands in order to put nutrition and value first, and are reluctant to go without certain items, including such as meat, poultry or coffee. Of those surveyed, 49% are shopping at more stores in search of the best deal, 35% have changed grocery stores altogether and 34% are choosing less expensive brands of health and personal care products rather than forgoing these products altogether.

The survey also asked consumers how they would spend an extra $10, to which 51% of those surveyed said they would most likely purchase more of the items on their shopping list or buy the products in bulk packages. Further, 13% of those making less than $45,000 annually said they would purchase more convenient versions of foods already on their list, such as pre-cut vegetables. Across all annual income segments, the top splurge item among consumers was dessert foods.

Packaged snack industry poised for growth

Dining out, fewer opportunities for sit-down meals may help snack foods’ cause.

Estimating U.S. retail sales of packaged snacks at $68 billion in 2008, “Packaging Facts” projects that sales will approach $82 billion by 2013, representing a total market increase of 20%. Despite the effects of global recession, the report from Marigny Research Group indicates that Americans are snacking more than ever, a trend that’s helped by pull-backs in restaurant dining and fewer opportunities to enjoy sit-down meals.

As the sluggish economy continues to breed fears of layoffs, health insurance woes and other worries, snack consumers continue to embrace value and other perceived benefits, including “whole” ingredients, “better for you” recipes and green production practices. While low prices are one way to reach this consumer, the survey also points out that consumers are willing to spend just a little more for organic and premium snack treats, perhaps in an effort to boost their flagging spirits over economic doldrums.

SOURCES FOR CURRENT RESIN PRICES
Chemical Market Associates Inc.
DeWitt & Co. Inc.
ICIS
IDES Inc.
Plastics News

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