Localization practices

The rising popularity of organic foods also raises important questions of interest to governments of different countries. Some research also states that people have a preference for buying organic food due to the fact that they believe it is stimulating the local economy.^[1] Demographic and agricultural histories, as well as governmental procedures, are fundamental to understanding recent food system localization practices.^[1] The growing recognition of the significance of local food and agriculture has raised considerable interest in farmers and consumers attempting to challenge global food systems. Much of the emphasis in new local food policy initiatives has combined specialty products from local farms with organic and ecological products. The turn to local food may cover many different forms of agriculture, encompassing a variety of consumer motivations and giving rise to a wide range of political changes, much as the laissez-faire economics of the nineteenth century prompted various responses with resistance to contemporary globalization.^[4]

Food policies in Europe

In many European countries, food is crucially linked to a sense of belonging to a national community and is part of national identity. The debate over genetically modified food in Europe has brought interest groups, social movements, and NGOs to spread the importance of health, nutrition, and ecological consideration to legislative bodies. The European Commission created a set of policies in 2007 that regard procedures to be taken when it comes to organic agriculture and importing.^[5] Some countries in the European Union support growth in the biotechnological industry, while other countries have adopted precautionary principles to avoid industrialized food production. The Consumer Union has successfully campaigned for introduction of regulations requiring labeling of products to ensure customers have control over the purity and quality of the food they purchase. Concerns about genetically modified food have increased demand for organic food, which is seen as a way to eat only trusted foods to provide a sense of order. Since 1970 agricultural policy in EU member states has been taken over by the community; farmers and retailers have grown accustomed to thinking of food issues in political and environmental terms.

Local variation in Europe

In countries like the UK, government policies focus regulations on informed consumer choice, via ingredient labeling. The UK is the European country where the most vocal and radical resistance to new agricultural innovation can be found, due to the government's slow response to food scares. Studies proved that in countries like Belgium, Norway, and UK, there is a strong preference for ecologically cultivated food. In spite of this, the UK's government has attempted to mobilize the organic food market.

In other countries, like Italy, transparency and quality seem to have a different meaning, which implies that labeling of products plays a slightly different role. Labeling is necessary to put a greater emphasis on tracing food, which is perceived as a step toward safety. The Italian debate on GM food is very recent (late ’90s) and has grown rapidly. Food safety has become a media issue, which has encouraged consumers to prefer organic products considering the fact that 77% of Italian adults are convinced that organic food is better for them.^[6] Organic food is portrayed as safer, expressing cultural traditions and territorial awareness. Associazione Italiana per l’Agricoltura Biologica^[7] reports a growth in organic acreage, therefore, Italy is one of the leader countries of organic food production. The Italian government has a more involved approach to the organic food matter. Politicians have taken a strong stance and the government has made great efforts to mobilize value change. Organic food illustrates the combined impact of moral issues with questions of localized trust in farmers. Food is linked to issues of political legitimization, becoming an object of continuous debates and struggles between citizens and the government. Interactions between producers, retailers and consumers are originating new styles of consumption that have given power to the consumer. In European societies, marketing and retailing agents provide ecological information to their customers, leading people to begin questioning large companies and government statements about food. This represents major proof that food consumption is, among other things, crucial to people's sense of belonging to a political community.^[8]

Organic labels

EU organic food logo

In the organic food market, a consumer's trust is a crucial issue since purchasers are unable to truly verify whether a product is organic, even after consumption. Organic certification has a long tradition in many European countries. Organic certification labels on product packages and/or price tags are used as a signal to consumers that a product is a certified organic product. In the European Union, the only products that can be labeled and sold as organic food comply with and are certified according to the principles of organic production, certification and labeling of Regulation (EC) No 834/2007.^[9] Since July 2010, all prepackaged organic products produced and sold in the EU must be labeled with the new mandatory EU logo.

Besides the EU label, there are several other organic certification labels in many European countries, which are owned by different kinds of organizations. On one hand, these can be differentiated into governmental labels, and on the other hand logos of private organizations. Governmental logos are found in some but not in all European countries (e.g. Danish ‘Red Ø’ logo, German ‘Bio-Siegel’).^[10]

In the US, in order to be considered organic a product must be produced using specific methods (excluding radiation, genetic engineering, etc.), only using allowed substances, and overseen by the US Department of Agriculture, who is making sure the farm is following all organic regulations. In order to sell a product that claims to be organic, it must be certified. If there are specific ingredients in a product that are certified organic, this may be specified on the packaging. An exception to the labeling of organic products is the fact that products coming from farms that make $5,000 or less do not have to be certified.^[11]

Production

Fig. 1. Global distribution of organic retail sales by single market, 2014. (Source: FIBL-AMI survey, 2016).

Organic markets have revealed a huge potential and today they display a steady annual positive growth in all countries that invest in production.

The organic market in the EU increased by 7.4% in 2014, led by Germany with 7,910 million Euro retail sales and a growth rate of 4.8%, followed by France, UK and Italy. (FIBL-AMI survey 2016 based on national data sources).

Worldwide, the organic market is headed by the United States, which holds 43% of global retail sales, followed by EU (38%), China (6%), Canada (4%) and Switzerland (3%).^[12] In the United States the solid growth of organic food market is expected to continue until 2018, according to the new “United States Organic Food Market Forecast & Opportunities, 2018” (2013) that puts a compound annual growth rate of 14% on the sector.^[13]

Consumption

In the EU, consumption of organic food has almost doubled in the last decade; consumers in 2005 used to spend, on average, €22.4 per capita on organic food, while in 2014 the number is increased up to €47.4. In this case, the nation that consumes more is Switzerland, followed by Luxembourg, Denmark, and Sweden.^[12]

In the US, organic food consumption is on the rise as well. In 2014, consumption was up to about $35 billion per year and it is estimated that organic foods have become more commonplace since then. Produce is the top selling category when it comes to organic foods, but other categories such as dairy, snacks, and beverages are on the rise as well.^[14]

Millennials are considered to be the most prevalent consumers of organic products. They make up over half of the buyers and generally persuade their families to buy organic products.

Distribution

While at the beginning organic products were mainly sold by specialized retailers, at the end of the 1990s sales began to cross over the mainstream retailers. Today, general retailers are the main distribution channels, followed by organic retailers and direct sales, even if these channels differ in importance from country to country.^[12] 93% of organic foods are sold in regular or specialized supermarkets in the US and the remaining 7% come from alternate buying means, such as farmers markets.^[14]

A critique of organic products is that distribution requires a similar amount of energy consumption compared to conventional food. Going local is considered more carbon friendly than organic food in this sense.

Retailers and marketing approaches

Retailers and marketing agents have had to adapt to the ever-growing and conscious flow of demand for organic foods. Organic products are perceived as premium products, which requires the market to handle them in such a way to create, preserve, and possibly enhance this perception.

As a consequence of the fact that consumption of organic products is embedded in a wider system of beliefs, buyers are highly involved when purchasing these type of products and the activity itself involves mental and emotional processes. Thus, the marketing approach toward this type of consumption is said to be more cognitive than behavioral, since its aim is primarily to understand how consumers link a product's traits with a healthful and socially conscious lifestyle. Typically, consumers relate the taste, texture, and odor of the food to kinds of hedonistic achievements and the organic way of production is connected to a healthy lifestyle and thus wholesomeness, physical well-being, and eventually happiness and a general inner harmony.^[15]

From the retailer point of view, organic foods, together with a set of other food products such as food supplements, weight loss bars, and free-from products, make up a category of goods that attract many niche market consumers and generate high margins of revenue. Traditional supermarkets are increasingly promoting organic food products by means of wider variety, price differentiation, and private labels, and specialized organic food stores, like Whole Foods and Trader Joe's, are increasingly more popular.^[16]

Organic private labels play a particularly important role in building the retailer image, since they help to build the retailer image and consumer bindings. As a sign of corporate social responsibility, the labels influence consumer trust in the company and its products. In the case of organic products, trust plays a crucial role since, even if consumers want to act in a conscious, rational, and independent way, it can be difficult to know if what buyers see is what they get. Usually, consumers cannot directly verify whether the organic products they purchase actually follow the laws of organic agriculture. If a consumer suffers from information asymmetries, this can make them feel vulnerable. For this reason it is important for the consumers to rely on the USDA along with retailers and marketing gurus, who present themselves as guarantors that products have actually been produced according to organic farming practices.^[3]

Organic restaurants

Organic and green restaurants constitute an additional food service connected with the spread of organic sensitivity. They have recently gained popularity and exploited market segmentation in order to attract those customers who are engaged with the pursuit of a healthy diet.

Restaurants of this nature usually stock up directly from local products, offering clients dishes cooked with fresh and local ingredients. Recently certifications have been instituted for organic restaurants. For example, in Italy, ICEA, Institute for Ethical and Environmental Certification^[17] has set a certification system that allows for more control and standardizes requirements in order to get organic recognition. In addition to certifications for organic foods, standardization for gluten-free, vegetarian, and vegan menus have been instituted, as well.

Another example is the American nonprofit Green Restaurant Association,^[18] which enlarges the prerequisites for the “green” certification to more general environmental issues. The association takes into consideration water efficiency, waste reduction and recycling, use of energy, and pollution reduction. Their system is based on 80 "green points," which are awarded if the restaurant adheres to certain environmentally friendly procedures. For most cities in the US, a restaurant is considered GRA certified if they score a 62 or above.^[19]