“Organic is mainstream now,” Carl Jorgensen, director of global consumer strategy of wellness at Daymon Worldwide, a company focused on brand building, sourcing, and retail driven services told BeverageDaily. “At the very least, three-fourths of American consumers are purchasers of organic products. That’s not a niche, that’s mainstream.”
Jorgensen said it wouldn’t be a surprise to see Coca-Cola launch its own organic version of flagship products in the near future in response to PepsiCo’s announcement. He cited a number of other companies, including Campbell’s and General Mills, which are taking steps to go organic, remove GMOs and utilize all-natural ingredients to bring in sales from the “better-for-you” market.
Food market shifting toward clean ingredients
It may not be long before the organic versions of these classic drinks become the new norm, Jorgensen said.
“I don’t think it’s that far in the future,” he said. “When you consider now in the flavors and fragrances industry, the sales of natural flavors have just passed sales of artificial favors. Natural favors are a bigger business than artificial flavor snow in dollar value; that’s a huge milestone indicating the direction things are going and how quickly they change.”
Jorgensen believes this all makes sense in the context of the food market in general, as many companies have started to bring out “cleaner” versions of flagship products to appeal to consumer demands. There’s a shift in sentiments happening, he said, as 71% of consumers have stated or self-described themselves as wanting to avid artificial flavors, while 62% want to avoid artificial colors.
“Gatorade is an example where there were artificial flavors and colors,” he said. “That’s huge consumer sentiment. They’re certainly responding to that.”
Organic… but is it healthy?
There is still confusion by many customers as to what “organic” means. According to a Mintel report, 71% of consumers don’t think organic products have standard labeling, while 72% believe that products are probably healthier.
Even so, Jorgensen believes organic may help offset some of the stigma of sugary drinks causing soft drink companies to lose money hand over fist.
“It’s part of an ongoing evolution and an ongoing conversation between consumers and manufacturers,” he said, using the example of Coca-Cola Life, which cut calories by utilizing the sweetener stevia. “You’re going to see not just removal of negatives of artificial ingredients, or in the case of organic, avoiding pesticides and herbicide residues, but then you’re going to start seeing companies reformulating to have less sugar and less salt but finding creative ways to keep the experience of the product at the same level.”
Will consumers buy organic Gatorade as a healthier brand, even if it still features the same level of sugar? Jorgensen said consumers may not be so easily persuaded.
“Companies have to be nimble,” he said. “You can’t reformulate your product and sit back and say ‘We’re done here.’ You have to constantly be reevaluating the product in light of shifting consumer perceptions and preferences. The days are over where you’ve got your product and decade after decade you manufacture, advertise it and ship it.”
“You have to constantly be changing everything you do, form the ingredient list all the way down to how you package and communicate your product to your customer. The pace of change has accelerated to where it’s now change or die.”