Data Discoveries: Is Organic Produce Really More Expensive than Conventional?
Market trends continually bear out the basic intuition that consumers prefer organic produce to conventional. More than ever, consumers are making conscious and active choices in selecting what type of produce goes into their bodies. Restaurants and fast food chains have begun to consider the preferences of their customers by introducing more organic, all-natural, gluten-free or GMO-free products into their menus.
But for the smart shopper, trying to be both health conscious and money conscious, there’s a worry associated with organics: higher prices. Generally, organic produce is more expensive than conventional produce, but recent trends indicate that gap may be closing. Price difference is highly impacted by region, availability, and a variety of other invisible factors.
We took it upon ourselves to analyze the marketplace over the past year for organic and conventional produce and noticed interesting movement in specific regions that reaffirm trends that are reflective of the widespread availability and increasing demand for organic produce. In the regions where prices for organic produce saw a sharp increase, conventional produce followed suit. In both the Midwest and the Southeast, prices for organic produce averaged around $2.60 and conventional prices averaged around $2.00 by the end of the 2016. Conventional prices rose in the same movement as the organic prices, a possible indication that there wasn’t a strong overall preference for either in these regions.
The most notable results came from the mid-Atlantic, which saw a sharp increase in organic prices and steady movement of conventional prices. The gap between organic and conventional produce is the largest among the regions studied, nearing almost a full dollar. Mid-Atlantic shoppers are eagerly gravitating towards organic chicken breasts and largely ditching conventional options.
Florida and the South didn’t see an incredible change in prices of either organic or conventional products, as the market trends show steady movement. The South’s organic prices stayed around $2.00 and its conventional stayed around $1.40; the award for most expensive organic prices goes to Florida, which showed little movement in the gap between conventional and organic. Florida’s organic prices were averaging around a little more than $2.60 by the end of the year.
In the five regions where organic produce prices saw a slight decrease (Southwest, Pacific Northwest, Rockies, New England and Northern California), the markets for conventional prices held steady. The only region that saw both a decrease in organic and conventional prices was Northern California, a region widely recognized for their health conscious and active consumers. It’s possible that, to keep sales of conventional produce from incurring too drastic of a loss, conventional producers may have lowered prices to match the movement of organics. The Rockies stand out for having the lowest prices in both organic and conventional produce. Both produce types can be found within an average range of $1.20 to $1.60.
Every consumer’s preference is different when it comes to organics. Taste, price and environmental impact all play roles in affecting the mindset of the consumer, who is, on average, becoming more conscious about the price and quality of the food they are buying. With an overall market gravitation towards organic produce, prices for produce in general have seen an increase. However, when compared with conventional produce, we see this market in essence rolling up its sleeves and preparing to fight to keep their prices steady or matched with organics.