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Organic Truth – Facts and Interpretations

August 18th, 2009 by Devangshu Dutta

Four months ago in this column (“Organic – Hope or Hype?”) I wrote about the need for customers to make themselves aware of the true nature of organic products, and it is time to reopen that discussion.

Food is an emotive subject with us as consumers, food distribution and retail is big business with us as the trade, and agriculture is a sensitive area of governance.

On top of that, studies are seldom exhaustive enough in terms of sampling, duration of the study, establishment of controls etc., and for every study that proves the superiority of organics, you will be able to find counter-studies and opposing arguments.

In recent years brands have tended to make much of their organic certification. Marketers are known for overstatement anyway, and the promotional language used by some implies (or even explicitly states) that these products are superior to other alternatives. Surely, then, the consumer should be willing to pay higher prices for these “better” products?

If only, if only, facts were that straightforward.

In the earlier column I’d written: “We expect organic products to contain more nutrition and be better for our bodies. While this may be true of organic animal products compared to their inorganic counterparts, it has not been demonstrated for plant products, other than anecdotal experience of taste and appearance.” I had also raised the question: if organic foods are no better nutritionally than inorganic and could be as productive for the farmer, are many of the organic brands just skimming the gullible customer while the going is good?

Well, the debate just got messier. Recently a study sponsored by Britain’s Food Standards Agency last month (July 2009) really set the cat among the pigeons. The report was based on review of existing research papers to find out if organic products were nutritionally superior to inorganic products. And their conclusion was that the studies reviewed did not provide enough evidence that organic food is more nutritious.

Well, what the report really said was that on the basis of the limited number of studies that were deemed to be rigorous enough, there was not enough evidence to prove that organic food is more nutritious.

Okay.

Imagine an examiner saying that he does not have enough evidence to prove that a student who has passed did not cheat. Notice, he is not saying that the student actually cheated. But wouldn’t this statement alone raise suspicion in your mind about the student’s integrity?

Unfortunately, newspapers and electronic media sell headlines, and headlines need to be short and snappy. Here are a couple of examples about this study.

  • Organic ‘has no health benefits’ (BBC)
  • The benefits of “bio” in question (Le Figaro)

These clearly raise questions about any benefit at all from organics.

In the noise, the disclaimers by the team that prepared the report seem to have been ignored. For instance, this one: “It should be noted that this conclusion relates to the evidence base currently available on the nutrient content of foodstuffs, which contains limitations in the design and in the comparability of studies.” The report also states: “This review does not address contaminant content (such as herbicide, pesticide and fungicide residues) of organically and conventionally produced foodstuffs, or the environmental impacts of organic and conventional agricultural practices.”

Like any good research report, it admits that “it is important to recognise the potential limitations of the review process”. And the final line in the Conclusion section of the detailed report says: “Examination of this scattered evidence indicates a need for further high-quality research in this field.”

As a reader or TV viewer, how many of us would be motivated to go to the original source and read these disclaimers as well?

Promoters of organic farming, such as Britain’s Soil Association, of course, have trashed the study saying that it is too narrow having excluded most of the available research papers since they did not meet the review standards, and that it ignored the biggest long-term health impact – that of pesticides and other chemicals used in inorganic produce.

Their opponents, in turn have trashed defendants of organic farming by calling them unscientific and narrow-minded in their own right. They point out that high-output inorganic farming is far more useful to serving the exploding human population, than low-intensity organic farming.

One of the readers of the British newspaper Daily Mail was emphatic that she didn’t “eat organic stuff to get extra nutrition”, but was “happy to pay more to be free from additives”. Certainly that is a significant benefit that motivates most people who are well into organic products. In an unusual open letter, the Chief Executive of the Food Standards Agency clarified: “Pesticides were specifically excluded from the scope of this work. This is because our position on the safety of pesticides is already clear: pesticides are rigorously assessed and their residues are closely monitored. Because of this the use of pesticides in either organic or conventional food production does not pose an unacceptable risk to human health and helps to ensure a plentiful supply of food all year round.”

The other motivation for organics is our attitude towards the environment, which can either benefit us over the longer term or, if we are irresponsible, it could accumulate toxins which only show their impact over decades and generations. But, let’s be honest, are most consumers likely to buy products because of some distant benefit to the environment, or products that benefit themselves immediately?

Possibly the answer lies in the organic sector cleaning up its message.

Are consumers any wiser after this study and the debate? I’m not sure. For now, my take on this issue remains: be aware and make up your own mind about what you want to ingest, because this debate isn’t over yet.

Posted in COLUMN-Progressive Grocer, Food & Grocery, Marketing, Supply Chain, Uncategorized | No Comments »

Wi-Fi in Coffee Shops – win-win or win-lose?

August 9th, 2009 by Devangshu Dutta

At the end of 2006, in an article about market segmentation, I’d proposed a customer segment called “Cafe Workers” who look at coffee-shops as inexpensive real-estate to work out of.  These include professionals, start-up entrepreneurs, small businesspeople and travellers into a city. (Click here to open the PDF file of the article “Slicing the Market“.)

But now, amidst the recession, apparently it is one positioning that some coffee shops don’t want to buy into. The Wall Street Journal reports that there is a backlash from many coffee shops towards customers who enjoy the use of free wi-fi and spend hours occupying tables that should be turning over more. (No More Perks: Coffee Shops Pull the Plug on Laptop Users). Many of the comments on the article are sympathetic towards the cafe owners, calling such customers “moochers”.

While the dismay of cafe owners over customers who abuse the facilities is understandable, could they be doing themselves harm by actively discouraging laptop use? Wi-fi is just one of the sticky aspects of a ‘hanging-around’ culture that the cafes have encouraged in the first place as part of their business model.

By and large, wi-fi enabled cafes around the world are more expensive than the ones which are not. Wi-fi goes along with the more premium positioning, and they should be able to balance the space premium lost on long-term wi-fi users with the grab-and-go customers who are paying higher prices without using the facilities.

That said, in specific cafes or at specific times of day or days of the week when there is a bottleneck, they should be able to limit the length of the IP-lease.

All it takes is a bit of thought and a tiny application of technology, not total disruption of the business model.

Posted in Consumer, Customer Relationship, Food & Grocery, Market Research, Marketing, Retail, Strategy, Uncategorized | No Comments »

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