Coasts, college towns prove to be strongest markets

11/02/2012 12:55:00 PM
Melissa Shipman

The coasts remain the most mature organic produce markets, but areas of growth are visible throughout the country.

Those areas of market maturity tend to be found in college towns, according to industry professionals.

“As you get into the heartland, it’s a tougher sell, in general, but like anything else,there are pockets, like Austin, Texas, and Lawrence, Kan., that seem to do much better,” said vice president of marketing Matt Seeley, The Nunes Co., Salinas, Calif.

Others agree.

“College towns are a strong location for organic,” said Earl Herrick, president and founder of Earl’s Organic Produce, San Francisco.

“In my experience of traveling across the country, that’s where you tend to find some more alternative thinking, and organics are an alternative food,” Herrick said.

College towns

Tom Deardorff, president of Deardorff Family Farms, Oxnard, Calif., has enjoyed this growth in college towns as well.

“Madison, Wis., is a major organic college town. There’s a younger, more outdoorsy environment,” he said.

Denver is another example of that market segment, he said.

He expects to see that growth spread from these areas to the suburbs surrounding those cities.

“Whether it’s more open thinking or whatever the different psychological reasons for that are, our research tells us that it’s the coasts first and then the pockets, which are primarily around the universities,” Seeley said.

Despite this growth, these markets still don’t typically match the maturity seen on the coasts.

“Generally, a lot of things happen first on the coast,” Herrick said.

He cites Boston, Philadelphia and New York as strong distribution points. He also said that from Seattle to Los Angeles, the West Coast has proven to be a solid market.

Midnation pockets

In the middle of the country, hot spots include Chicago; Denver; Boulder, Colo.; and Minneapolis, according to Herrick.

Scott Mabs, director of sales and marketing for Homegrown Organics Farms, Porterville, Calif., also has noticed growth in Minneapolis.

“Minneapolis is a very unique little place when it comes to organics,” he said.

Mabs said that his company sees a large market for their products in the north because they offer several crops that can’t be grown in northern areas.

Mabs says he also has seen great growth in Canada.

“I think Canada has a number of very mature markets, such as Toronto,” he said.

Urban and rural areas have untapped market potential, said Simcha Weinstein, director of marketing for Albert’s Organics, Bridgeport, N.J.

“States such as California, Wyoming, Texas, New Mexico, Wisconsin and South Dakota have shown tremendous market potentials and are being considered as the most attractive investment destinations for organic food business,” he said.

Of course, the main tool for predicting growth in the market is to find where a need is not being met.

Herrick said Whole Foods recently did this with their expansion into Fresno, Calif.

“Fresno is not a particular hub for organics, but they expanded in there,” he said. “That’s the kind of thing that happens when you have an audience. You’ll fill it.”

Of course, it’s not just about finding a void. It all depends on the interest level and the demand.

“Opening up an organic store in North Dakota might be more of a challenge,” said Jim Roberts, vice president of sales for Naturipe Farms LLC, Naples, Fla.

“It all depends on what the demand will be.”

And just because the coasts have a higher consumption of organic products, that doesn’t mean there is no room for growth there.

“I certainly don’t think we’ve reached full maturity even on the coast,” Deardorff said.



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